Most business owners are very passionate about their business. They get in and roll their sleeves up, devote numerous hours to their business and to the success of their business and they work extremely hard to realise their dreams and aspirations.

As a business owner and you owe it to yourself to have a final result for your efforts, something that you are working to achieve.

What is your ultimate plan for your business? What do you want to achieve?

If and when it does come time to sell or to pass the business onto someone else you want to do this from a position of strength. To sell it when it’s at its most valuable point and not when you’re burnt out, in poor health, or in some other situation where you are rushed or won’t make nearly as much from the sale.

Like every great work, project, achievement you have to start with the end in mind.  This will give you an ideal to work towards.

A goal to strive for, a dream to realise and it will guide your plans and work.

Here are eight things you need to start doing today, now in your business to increase the value of your business to yourself and to potential buyers in the future.

1. Position your company in a clearly defined niche

Your business must be the best it can be out what it does, without trying to be everything to everyone.

A business that knows its customer segments, their needs and language, and how to solicit a response from them is a lot more valuable one that is a mixture of everything, an unknown in its market.

2. Train your team to run the business without you.

Don’t be the business owner that thinks that they are irreplaceable.  You should be making yourself replaceable in terms of the day-to-day activities in running your business.

As a business owner, you should be spending part of your time on running the business not just being in the business.

Could other people ever run your business without you? If not why not?

You need to start setting up policies and procedures and documenting these so that your business can operate without you being there.

Make an organisational chart of how your business will look when it’s time to sell. The various departments, who is in each department and who reports to who. This will include Sales, Marketing, Operations, Administration, HR etc. It’s fine if it today is just you a handful of people currently filling all those roles or a combination of those roles.

By doing this you will help you organise your thoughts on who is going to do what in your business before your higher a new person.

Then over time, you can find other people to fill those positions one by one until you have successfully moved out of the picture.

3. Build relationships with customers

Goodwill, such as your reputation, brand in the minds of your current and prospective customers is considered an asset on your company’s balance sheet. You build this over time by treating people well and maintaining good relationships.

If you plan to sell your business or to have the option, this is something to have to make a priority throughout the business’s life.

You can’t just are doing it well in the final year of the business.

Relationships and recognition matter and they take time.

4. Make sure your stable

Do not be overly dependent on any one customer, vendor, employee.

Diversify your strengths. Don’t build a business on one huge customer that accounts for the greater part of your business.

You do not want the success of your business to be dependent upon the success of another business owner, their plans, their strategies, their failings.

5. Maximise your revenues

Make sure you leverage the four proven ways to increase your revenues:

Getting more customers

Increasing average order size

Get customers to buy more frequently

Finding new ways to monetize your customers and visitors

A company with higher revenues and which shows growing revenues will be more valuable and attractive to prospective buyers

6. Hold expenses accountable

You boost your net profit (and therefore the value) by reducing your expenses.

But

No one ever shrank themselves into wealth.

You’re not going to grow your business by keeping your expenses lower, cutting everything back, and not investing in the future growth and profitability of your business.

As your business grows then your expenses will grow accordingly.

Your goal is to keep the percentages the same such as keeping advertising at 20% of the revenues whether earnings are $100,000 or $1 million per year.

Basically, you want to make sure the budgets are made and followed, to keep spending within projected limits and to avoid costs creeping up.

Ideally, your expenses are investments into assets that grow revenue. You invest in advertising, you invest in staff, you invest in products to sell so that they generate more revenue in return.

As a business owner, you are responsible for generating a return on your assets. End of story.

This relates to your marketing and other expenses that relate to the growth of your business. For example, your distribution costs may increase as you sell more and therefore having to deliver more.

But

Your expenses on some of your fixed costs such as rents or other overheads should decrease as a percentage of your revenues as you are becoming more efficient and more effective in the operation of your business.

7. Keep great records for the next owner.

You should be keeping excellent records of everything for yourself. Your files, your databases, your customer communications, your marketing materials, your financial records, your employee agreements, everything.

Committing to do this now will make it easier between now and when you plan to sell your business or move on to other operations.

Keep good records for your own efficiency, protection and to make your business look a lot more attractive to buyers than one where all the records are in a box under the desk.

Also by doing this, it is just common sense. It helps you do your own financial analysis and projections of your business.

You can provide speedy and reliable information to your financial advisers.

And if you need to secure extra funding then you can easily provide a financial institution with all the details they require.

Also if any claims for insurance or workers compensation needs to be filed by your organisation you can easily access the records required.

8 Develop a plan for when it’s done and ready to sell.

No one wants to plans of plans of plans.

Each of these steps will take certain actions to make them happen.

So what you need to do is add these in results into your existing business plan and use your best judgement on when to make each of these happen in your company.

Let’s be honest whether you maximise your businesses value will not is up to you and what you do with your plans

But

In five years time wouldn’t you rather have a stable attractive polished business ready to sell for top dollar or being forced to take what you can get for what you have.