Whether you want to sell or not, it’s always helpful to boost your business – making it more saleable is just shorthand for making it better, more profitable and more sustainable. Here are five key ways you can consider giving your company a kickstart this spring:
1. Improve your cashflow. This may be as simple as changing your invoice patterns or payment terms. I’ve had clients with service businesses who would get into a hole come tax time because they never got around to doing their invoices until a month after the job was complete. And who says the job needs to be complete, anyway? Upfront and progress invoicing are becoming increasingly popular and can do incredible things for your cashflow.
2. Expand your customer base. It’s all too common to meet Kiwi small business owners whose entire revenue depends on five – or sometimes one! – customer. It’s difficult to sell a business that is essentially a contract supplier to a single buyer. As a rule of thumb, no single client or customer should make up more than 5% of your total sales.
3. Work toward your business plan – or write one. It doesn’t need to be a thesis, but a well thought out business plan helps keep your company on track and helps you maintain your focus. As you progress along or close to your projected targets, the business plan helps show a prospective buyer that the business can achieve its goals. Even if you never sell, a business plan can be a great tool for growing your company, so talk to your accountant and salespeople and get it underway.
4. Put your prices up. I know accountants have a reputation for always saying this, but it’s true. We modest Kiwi workers tend to undervalue ourselves and our products. If you’re busy, you can put your prices up. Provided you get the numbers right, if you lose some customers, you’ll probably still break even. And when you gain new ones you’ll be well ahead.
5. Treat your A customers well. You know the customers I’m talking about. They’re easy to deal with, always pay on time and rarely make a fuss. Treat them like gold. These people will be your best source of recommendations, and usually recommended clients are A or B clients too. That’s because they’re pre-screened by your existing happy customer so they know what you do and they know how much they’re going to have to pay for it.
Okay, that’s it. What are you waiting for? Get on with it.