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  • Writer's pictureJulie Edge

How to Maximize Your Company's Value: Treat It Like an Asset


Are your company's day-to-day operations and immediate financial gains consuming your attention? If so, you may be overlooking a critical aspect of your business: its value as an asset. 


You aren't alone. Most small business owners are more focused on putting out the daily "fires," not thinking about their business as the largest asset in their portfolio, However, this mindset can lead to missed opportunities to maximize your company's value and can jeopardize your financial security for future endeavors, such as retirement.


Managing your company like an asset may alter your strategic direction, but it also ensures your company grows into something with value that an acquirer will want to purchase when you are ready to move on to your next chapter. Here are three tips to consider as you re-evaluate your business.


1. View Your Business as an Asset


As a business owner, it's essential to recognize that your business is more than just a source of income—it's an asset that can appreciate in value. This perspective requires a shift from prioritizing short-term gains to investing in the long-term health and growth of your company. By nurturing your business as you would any valuable asset, you're more likely to see a significant return on your investment in the future.


Strategic decision making is at the heart of managing your business as an asset. It involves looking beyond immediate profits and considering how each decision will impact the long-term value of your business. This approach can guide you in making choices that build your business's worth over time.


💡Apply strategic filters like a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis to help you make informed decisions that align with your overall mission and market positioning.

2. Plan for the Future


To enhance the value of your business, it's crucial to plan for the future and to keep the end in mind. This means creating systems and manuals that ensure smooth continuity, even in your absence. A well-documented business is more attractive to potential acquirers, as it demonstrates that the company can operate without relying solely on its owner. Training your team to run the company independently can also increase the value of your business to potential buyers. It will also improve your quality of life and well-being when the business isn't so reliant on you. 


💡Implement tools like the Entrepreneurial Operating System (EOS) or Business Made Simple's Flight Plan to provide the structure and accountability needed to smooth out your operations. 

3. Start Early in Asset Management


It's never too early to start managing your business with an asset-based mindset. Even early startup founders can benefit from this exercise. From the outset, seek guidance from mentors or professionals who can provide an outside perspective on asset management.


Organizations like SCORE.org suggest identifying and valuing your assets, recording them on your balance sheet, and understanding their role in taxes and financing. These steps are foundational in recognizing the true worth of your business and preparing it for long-term growth. 


💡Take the Value Builder Assessment to get a third-party read on the value of your business and how it compares to your industry peers across eight drivers of value. It's a 15-minute investment of your time to get a report that will provide clear direction on what you can do to enhance the value of your business and set a baseline to then measure your progress as you grow.

Strategic decision making is not just about choosing the right path for immediate success; it's about setting your business up for sustainable growth and increased value. By managing your business as an asset, planning for the future, and starting early in asset management, you can build a company that stands the test of time and provides long-term returns. Remember, the decisions you make today will shape the value of your business tomorrow.





 

Julie Edge Ph.D., is chief strategist and founder of Inside Edge Solutions LLC, a boutique strategy coaching and consulting firm serving business owners seeking less chaos and complication in their business and more thriving in their life—both personally and professionally. Connect with Julie on LinkedIn at @drjulieedge 

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