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Things we rarely think of

What is your business worth and why do you care?

Small business owners rarely think of having a succession plan or exit strategy to get out of their business. They rarely think of things like an illness that would render them unable to work the business or how long do I really want to work before I retire. The furthest thing from their mind is what is this business worth if I need to retire.

As our economy moves away from manufacturing related jobs you begin to see more and more self employed individuals. It is important for these individuals to think of the business as more than a paycheck. They must realize that there is real value in business ownership and they need to nurture that business and document its value.

The most important item is to maintain and understand financial records and documents that can demonstrate that this is a profitable and viable business. The next important item is to really focus on the image and processes that will enhance your value.

Just of few items that have a direct impact on your businesses value:

  • Appearance of the business- make sure it is well groomed inside and out.
  • Friendly People-make sure your employees go out of their way to be cordially and helpful to your clients or potential clients, don’t underestimate something as simple as friendliness in the office, this can bring you a premium on your business that we call goodwill.
  • Organization- Be sure that you have an organization chart where all the duties of each member of management and each employee are documented and and defined. If someone had to come and take the business over in a short period of time, this would be crucial to them.
  • Operations manual-This should document every function and operation of the business. A documentation system can increase your companies value.

If you are not thinking about succession planning in your business you should be. We would be glad to help in any aspect of this process. Contact us at 303-932-1193.