Ideas on how you can create value over time
To stay ahead of the competition, your business needs to continually adapt and innovate, while creating value as it grows.
The key to creating value in your business is effective forward planning. Take time to develop a plan that addresses the areas of your business that need to increase in value.
Grow your asset base
The more assets your business has, the more valuable it’ll be. You’ll need to weigh the advantages of owning versus the benefits of leasing.
If you choose to own the majority of your business’ assets, you’ll inevitably:
- Grow your capital base
- Monitor when certain equipment might become outdated or obsolete
- Borrow money from creditors using your property as security
It’s important that your assets are in good condition, so make sure you have a regular maintenance program in place.
Protect intangible assets
Intangible assets are the ones you can’t physically touch, such as intellectual property (IP), the knowledge held by your staff and your customer database. IP makes up a large part of your asset base, so it’s important to take steps to protect it.
By clarifying ownership of your company's IP, you can minimize the risk of your employees taking IP with them when they leave.
Restrictive covenants in contracts of employment can prevent your staff:
- Using sensitive information after they move on
- Enticing customers away if they join one of your competitors
- Setting up their business to compete against yours
Information held in the cloud can be vulnerable. To protect it, consider putting in place effective online security, including robust passwords and regular backups. Restrict access of critical or sensitive business information to a few trusted staff members.
Develop a strong brand
Your business’ brand can become a valuable asset that potential buyers will see as a strength. A recognizable brand helps set you apart from your competition.
By building a reputable and reliable brand that’s trusted by consumers, you’ll add value to your business.
Reinvest in your operations
Consider whether you need to reinvest some of your profits in research and development for new products or services. The business world is constantly changing, so standing still generally isn’t the best option. Reinvestment is an opportunity to add value to your business.
It’s important to keep any technology your business depends on current, including the facilities it uses. You’ll harm productivity and your competitiveness if you allow your technology to become outdated.
Retain key staff
As your business grows, you can’t undertake every task yourself. By employing skilled and knowledgeable staff, you can build value into your business.
When it comes time to sell, potential buyers will then be confident your employees are capable of successfully running the business without you.
Key employees are more likely to remain with your business if you offer:
- Competitive terms and conditions
- A positive working environment
- Opportunities for career advancement
Investing in training and development for your staff will pay dividends because they’ll be able to take on more responsibility and add value to your business.
Recruit new staff members with care. By hiring the best employees, you can build an innovative and dynamic team focused on delivering top products or services to your customers.
Conduct market research
The needs and demands of your customers will change over time. Keep your products and services up-to-date, and move with the changing requirements of your customers by conducting regular market research.
By responding to the results of your research, you’ll help your business to anticipate and plan for the future.
Work in partnership
Establishing new distribution channels and breaking into new markets can take a large investment of time and money.
If you enter into strategic partnerships with successful distributors or complementary businesses, you may be able to expand your business’ reach and win new customers in a more cost-effective manner.
Make sure your business has standard policies and procedures. Simple, smooth-running processes are easier to use as it grows.
Before you take action on any of the information above, we recommend consulting with a qualified business advisor that understands your unique needs and situation for your specific business and/or personal plans.