Nurturing a Stable Customer Base
A well-managed customer database is one of the most valuable assets as it can be used in many ways for marketing and gaining referrals. Try to:
Improve and update your customer database.
Start measuring customer retention rates and customer referral rates.
Implement a customer loyalty program and referral incentives. Buyers will want to know that key customers won’t leave if you do.
Secure your cash flows
Stable future cash flows are critical to the value of a business. Buyers will want evidence of reliable revenue streams coming into the business. Aim to:
Start building more diversity and therefore resilience into your customer base if you are too reliant on a few major customers.
Look for ways to develop more revenue streams by adding extra services or products, and lock in stable revenues through customer loyalty programs and contracts.
Refine marketing tactics that work
Buyers will want to know what tactics have worked best for your business. Ensure you:
Document your marketing strategy and your promotional tactics for the next 12 months.
Demonstrate how you measure all marketing to identify the best and eliminate what is not working.
Identify what you are doing to expand your markets and distribution channels.
List some still unexplored areas that could offer potentials, such as a better website or social media marketing.
Maintain tight financial control
Excellent financial management will show up in your credit history—something you can be sure a buyer will check out. Plan to:
Keep improving your money management skills through cash flow and profit forecasts and budget reports.
Show you understand and monitor the key performance drivers in your business.
Demonstrate that you have credit management under control and that your average debt collection time is at least as good as the industry average.
Develop great business systems
Excellent business systems add considerable value to any business because they allow you to spend more time working on your business rather than in it. They also make the transition to new ownership much easier. Make sure you:
Prepare your business as if you’re planning to franchise it.
Start building an operating manual that documents all processes in simple, easy-to-understand steps.
Show how good systems enable faster training and help staff cover for absent employees.
Grow your brand
A buyer will see significant value in an established and respected brand that differentiates your business from competitors. Aim to:
Work on developing a brand that captures the essence and unique selling points of your business.
Take any necessary steps to enhance or reinvent your branding.
Protect your intellectual property (IP)
Intellectual property can add considerable value to your business, but only if it is well protected. Ensure you:
Protect your logo and brand as a trademark.
Consult a patent attorney or IP expert about protecting any designs, inventions, copyright material, or other IP that will add value.
Build strategic alliances
Strategic alliances can be important sources of growth and added value. Be sure to:
Consider what extra skills and resources you lack to exploit opportunities you’re missing.
List and approach businesses that could help you gain work that your business couldn’t normally deliver on its own.
Contact businesses that have more extensive distribution and sales channels.
Lock-in key employees
Dedicated and experienced staff can be a key asset in the eyes of a buyer, especially if they’ve helped you create a valuable business. Plan to:
Ensure you provide opportunities for career progression and use incentives to align pay with the value that your staff creates.
Make your business an attractive place to work. Good working conditions and competitive wages will help to retain skilled staff.
Look for people who can create value for your business and managers with transferable skills who can help you build growth.
Got a question about your business? Please do not hesitate to ask. Our goal is to help our clients future-proof their business.
