Have you thought about valuing Your Business?? Do you know the value of the Business You have created??
We are sure that you all took invaluable efforts to build up your business. Just a simple question. Do you know the value of your business? It's easy to tell the value of the assets you have. It can be the land, building, vehicles that you are having. But it's not that easy to have your business valued!!
Entrepreneurs create immense value to society. A million jobs to the common public and support the Government by collecting and pay taxes. But whether the Businessmen aim only at profit? No, they always try to create value for their business and society and not only profits.
To create value for one's business an entrepreneur must take care of the 10 important points
- Importance of Technology: - Whether our business is B2B or B2C, we should use the technology to the possible extent. If you are doing the same, it will definitely increase the valuation of your business. It’s suicidal to ignore technology in our business nowadays.
- Business Focus: - Businessmen always play smartly. They do 100 things in a day! Many may be doing different businesses together and a few succeeded as well. But I think a FEW. It's always better to be focused on what we do. Do six things a thousand times rather than doing a thousand things six times. It helps to create a better value for your business.
- Everybody is your customer? :- Is your business like that? It can be, like toothpaste or something which everyone uses every day? It can be more risky and heavy investment-oriented. Always identify your target customers so that the valuation of your business might reveal a better value.
- Systems: - The most heard and boring word for an entrepreneur experience!!
Can I explain with an example? If one of the best employees of your team leaves the organization for an unavoidable reason and you hire the best candidate in his place from the industry. But do you believe that you have a system where he can start from where the other stopped? If so you are the best! Do we have a written set of documents to support the new employee to take up the challenges from day 1?
- Are you alone in your business? : - You are an entrepreneur and you are giving livelihood to others. Do you believe that you are having trusted employees? Strong support of employees always adds value to your business and shows the strength of your business valuation.
- Strategic Partners: - Entrepreneurs are always dynamic. They take up challenges and at the same time, they should be humble to accept new ideas. They should always be with the right advisors. They should create a good pool of advisors to grow. If you are with the right people your value will increase. We have seen many examples of technology and knowledge partners adding value to the Indian entities.
- Recurring Revenue: - Many of the business run on a one-time sales strategy. It may be because of the product value. Still, they track the AMC mode to have regular revenue from the customer. Here comes the importance of recurring revenue. Once we earn a customer, it's important to create regular recurring revenue from them. It will certainly add value to your business. Valuation of business is always based on consistency and competency.
- Data Storage and Analyzing: - Is there an organization without a computer nowadays? Are we as businessmen using our potential? The customers we have or the new customers coming to us are our potential business as well as referrals partners. The business house must have a facility to store the data and access the same for its further growth. If we have a system to show the same and if we create revenue on this, we will be better valued.
- Transparent Accounting: - An investor to your business. That's the dream of many business owners, especially the new-gen entrepreneurs. But are you ready to accept investments? I mean, do you have a transparent and clear accounting system? The same will help the investor to have trust in you and your business. Buy the trust first, then the investment. Nowadays the investor can access the accounts from any corner of the world. Please have a transparent accounting system from the beginning itself.
- Legal Due Diligence: - Why the Valuation for your business?? Do you want to make a profit out of it? Then it's sure that you need to face Legal Due diligence. If you are perfect in compliance and in adherence to the laws of the land, it's the best way to attract a better valuation.
Be the best and grow the business accordingly and exit at the right time!!!
Company Secretary & Business Consultant