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As the business owner, you are the most important asset of your company . . . until you build your company beyond yourself. You want to develop your company so that you can work ON your business, not IN it. When you are working ON your business, build the business into an asset that you can sell or that you can give to your family. Here are five important elements in building your business into an asset.
First, you must have a product or service that meets a need or a want. This statement sounds too simplistic; however, consider how technology continues to change the way we live. How are you keeping your product or service relevant?
Next, your database of clients represents the revenue of your business. Do you know who your customers are? Do you have names, addresses, cell phone numbers, email addresses, and social media accounts? How are you communicating with your customers and prospects? Your primary goals are to increase your conversion rate of prospects to customers and to increase the number or value of each customer’s transaction.
Another way to make your business profitable is by developing efficient systems. How are you using your resources to organize work so that time, material, and labor are producing the desired quotas for maximum revenue and minimum expenses? Remember, you increase your bottom line by making money and by not spending money.
A fourth element in building your business into an asset is your team. Foremost in your recruiting is finding and hiring individuals who have the same values as yours and whose work ethic matches the culture you are building in your company. Further, you want a team with talent. Engage people who know about the work you want them to do. (It is not only OK but probably desirable if they know more about their areas than you do. You want them to be smart.) Hire for performance, not potential. After all, you are counting on them to take your business through the next stage of growth … and beyond.
The fifth element is professional financial reporting. As a business owner, you should begin with a business plan and a professional accounting system. If and when the time comes that you want to sell your business, having audited professional financial reports will multiple the value of your company. So, beginning with a plan and keeping professional records throughout your journey will pay off for you — all the way through.
Owning and managing a business is not for the timid. However, David Rockefeller observed: “Success in business requires training and discipline and hard work. But if you’re not frightened by these things, the opportunities are just as great today as they ever were.”
So, go for it! Just make sure you are creating a business that has a payoff for you.
Arnelle Adcock is a partner and president of Brentwood-based Clover Management Group — a team of seasoned professionals who help business owners. You can reach her at 615-900-0777, aadcock@clovermg.com, or www.clovermg.com.
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