Question: My business has been operating for a year now and it is doing well. I have always wanted to retire someday. I could sell my business at a good price or leave it to professionals to manage it. What are the things that I should do now to prepare for the future? – Lois G by email
Answer: Any growing business, at some point in the future, will take a life of its own once it has established its market and has built goodwill in the industry. When this happens, the business would be operating on its own without you pushing it so much. You will by then be able to spend more time with your family, or maybe doing other social projects while managing your business by supervision.
This is the ideal situation every entrepreneur dreams of. Some people achieve this within a short time. Some reach this point after many years. The speed to achieving this kind of freedom depends on how you add value to your business now.
When you build value into your business, you enable the business to grow by its own. As your business grows, your objectives change. You do not just aim for profit only, because you begin to aspire for long-term value.
How do you maximize the full growth potential of your business in the future? Here are six ways by which you can add value to your business:
1. Recruit and develop good people
You must make your business less dependent on you by recruiting capable people that you can train and develop. Start by delegating some of the tasks that other people can handle. For example, you can hire a good accountant to handle your bookkeeping and advise you from time to time on money matters. You can also hire sales people to help you grow your market. Later on, as you build the business, you can promote one of your staff members to become your manager.
2. Invest to deliver good customer experience
One way to build a good brand in the market is by giving good customer experience. Improve your business processes to increase your business capacity to serve better. For example, you can equip your sales people skills by investing in training. By constantly developing their skills, your sales team can exceed your customers’ expectations, all while they become more efficient and productive.
3. Build customer loyalty
Developing customer loyalty is key strategy to business sustainability. When you have customers who keep on coming back, you build regular cash flows to your business. The more loyal customers you have, the more predictable your business will be, the more valuable your business will become in the future. The cash flows you will earn will enable you to hire and train more people to help you expand your business.
4. Focus on the business
There is always the temptation to diversify into other businesses when you are earning excess cash. There is nothing wrong in investing in another business for as long as it creates value to your portfolio. However, there is also always the risk that you may lose money if you made the wrong bet. If you have earned the extra cash, try to invest it in the business by increasing capacity, or improving its process that will add value in the future.
5. Protect your brand
Your brand is one of your most important assets in the business. It may not be classified among your assets in the balance sheet but it may be the most valuable asset you may have in the future. Your brand value increases as your customer base grows. The goodwill that your business generates from your investments today will be reflected by your brand value in the future. Make sure that all your brands are legally protected with the Intellectual Property Office.
6. Build good reputation
Doing corporate social responsibility is one way to build good reputation. Maintaining positive reputation can help increase customer retention and also develop relationships with suppliers. It can also help differentiate your business from your competitors. All these will add to the long-term value of your business.
Building value into your business requires more than financial investment in the future. It can also be investment in developing relationships with employees, investors and suppliers.
Henry Ong, CMC, is president of Business Sense Financial Advisors. Email Henry for business advice email@example.com or follow him on Twitter, @henryong888