If you’re thinking of increasing the value of your business, I believe that first and foremost, you need to know what type of business you want to be. Do you want a lifestyle business or one that is poised for growth?
In a lifestyle business, all the profits go into the business owner’s pockets. In a business poised for growth, most of the profits go into growing the business – systems and people.
If it’s growth, are you ready to deal with growing Accounts Receivables, Payables, Payroll, Employees, etc., etc. Growth requires hiring and firing people, training employees, developing a managerial level, developing vital and actionable executable business plans at every stage of growth. Growth may also require a significant financial investment or several investments over time – from whom – You? Private or public outside equity investors such as angel investors, venture capitalists? Bank debt? or both? Or growth may even require partners – silent or working?
If it’s a life style business, can you stay competitive in your marketplace without growing? Can you maintain the status quo in a changing marketplace? Do you have a book of business that a buyer will value and pay you for your past efforts? Be aware that buyers are paying for the future – their future with what was once your business.
Whether you have a life style business or one that is poised for growth, do you have a business plan in place? It can be an annual plan or one that is projected several years out. Does it include both your personal and company’s goals, your core values, how you will grow revenues, sales, marketing, finance, accounting? Is it a flexible plan? Can you change or pivot quickly if necessary?
Since business is never easy, since so many business do not succeed over time, it is truly critical to know which type of business you want to be when you grow up!