13 WAYS TO KEEP YOUR BUSINESS YOUTHFUL - Christian Harbeck
You’ve spent years building a business, now it’s time to monetise. But you’re not sure how to get your business to the next stage, maybe give it a fresh look or bring some youthfulness into the mix? How do you increase the value of your business?
Did you know that 8 out of 10 businesses don’t sell or are not sellable? This simply boils down to the fact that the seller cannot achieve the price to exit. Your business is only worth what a buyer is willing to pay for it; it is that simple but sometimes that difficult to accept.
Long before I was exposed to business coaching there had been a scenario in my life where I had to close a business down as it was just not worth anything – during that time it was my only option. Luckily it was a very long time ago and no one was negatively impacted.
Lesson learned and moving forward fast, let’s think about the next scenario. How do you keep your business young and attractive? Too many businesses close and take so many other businesses down with them. This has to end, hence it’s my mission to empower business owners to accelerate growth, increase the value around their brand, and make more money with the outcome of building a legacy through generational wealth.
What keeps your business young and valuable?
1. Can your business run without you?
First and foremost, can your business run without you? This is the 8 out of 10 statistic. When is the last time you did an “acid test”? Walk away from your business right now. If it will continue to make more money, grow, and be profitable for the next 6 months you have a very attractive business.
2. Do you have a succession plan in place?
Irrespective of how young you are, do you have a succession plan in place? Here is another fun fact. 70% of businesses don’t transfer to the next generation as they are “stale” and “old”. This speaks volumes.
3. Quality products and services
What seems to elude so many business owners are quality products and services. Customers rarely question your price if you have the WOW factor. 68% of customers leave due to perceived indifference.
4. Geographic Market
Can you penetrate another geographic market? Selling coffee out of your coffee shop to passers-by is just no longer a viable business model (at least it won’t be for long).
5. Concentration of customers and suppliers
Above and beyond the geographical aspect, are you restricted to a certain concentration of customers and suppliers?
6. Intellectual property
Intellectual Property. What can you secure, protect, trademark, and copyright? Many businesses create massive value by owning some great patents.
Here is one that I really value in any organisation — your employees. Do you have a winning team that is driven by strong leadership? Is there a common goal? Is there an action plan? Is there support of risk-taking? Is there 100% involvement and inclusion? What are the rules of the game? I live by this in my organisation, “Culture eats strategy for breakfast” — Peter Drucker.
8. Do you have a strong balance sheet?
Do you have a strong balance sheet? I cannot tell you how often I come across owners that have very little knowledge of the numbers in their business. If you do not know, test and track your numbers.
9. Does your business have any growth opportunities?
Does your business have any growth opportunities? If so, why don’t you implement these? If you need the cash to do it then run a tight ship by managing your expectations, run your numbers diligently without exceptions, and any lender will lend you the money. This may sound easier said than done, but a great plan that is worked through can get you to your destination over time.
10. Managaement processes
Do you have strong management processes around your debtors and creditors as well as shrewd stock management systems in place?
Are you maintaining your property, plant and equipment? If your assets have depreciated or are old and outdated, you might need to rethink what you could make with new or better-quality assets compared to what you have now. Stay on trend with what new generations want.
12. Are you generating cash in your business?
Are you generating cash in your business? Are you profitable? The past two years have not been easy for many industries and there is no magic fix. The phrase “think outside the box” has been thrown around a lot lately but it’s so true. Reinvent yourself and your business to generate the necessary cash and profit.
13. Get yourself a mentor or coach
Get yourself a mentor or coach to support you in your journey. More and more acquirers look at businesses that have business coaches or mentors as a guarantee for present and future value.
By now you surely have identified a few points that you can implement to keep your business young and fresh. If you can tick all these boxes, you have a premium business.
Life on average gives you 4400 weeks, can you calculate how much time you still have left? It’s never too late to make a change, you are a business owner and you deserve to enjoy the fruits of your hard labour.