Most company owners set business goals that focus on hitting certain revenue or profit milestones. But if your goal is to own a more valuable business, you may want to make one of the following goals instead:
Take a two-week vacation without checking in with the office. When you return, you’ll see how well your company performed and where you need to make a key hire or create a new system.
Cultivate a new relationship with a new supplier. Having a “go to” group of suppliers is great, but an over-reliance on one or two suppliers can create a liability for your business. By spreading some of your business to other suppliers, you keep your best suppliers hungry, and you can make a case to an acquirer that you have other sources of supply for your critical inputs.
Offload at least one customer relationship. If you are like most business owners, you are still your company’s best salesperson, but this can be a liability in the eyes of an acquirer, which is why you should wean your customers off relying on you as their point person. By the time you sell, none of your key customers should think of you as their relationship manager.
Write down at least one process per month. You know you need to document your systems, but you may be overwhelmed by the task of taking what’s inside your head and putting it down in writing for others to follow.
Create a recurring revenue stream. Valuable companies can look into the future and see where their revenue is going to come from. Recurring revenue models can vary from charging customers a small amount for a special level of service to offering a warranty or service contract.
Check your contracts and make sure they would survive the change of ownership of your company. If not, talk to your lawyer about adding a line to your agreements that states the obligations of the contract “surviving” in the event of a change of ownership of your company.
Start tracking your Net Promoter Score (NPS). The NPS methodology is the best predictor that your customers will re-purchase from you and/or refer you, which are two key indicators of a healthy and successful company. It is also why many strategic acquirers and private equity companies use NPS as a way to measure the health of their acquisition targets during due diligence.
A lot of company owners will set goals around their revenue or profits, but those goals are blunt instruments. Instead of just building a bigger company, also consider making this the year you build a more valuable one.
Contact Whitehorn today to find out how we can help set and achieve these goals and help make your company more valuable.
