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Are You Building Value? Here’s What to Consider

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Feb 18, 2015

Hi Barb:

I’ve been in business for 12 years and often wonder if I’m building a business that would be considered a sound investment. What areas are most important to review?

Andrew B. San Jose, CA

Dear Andrew:

There are many things to review to determine if you are creating value in your business. Some of those would include the following 11 areas:

  1. Potential growth of your niche or area of specialization.
  2. Your business model, i.e. contract or blended firms create the highest value (re-occurring revenue model and contracts).
  3. Systems for sales, marketing, referrals, training, hiring and operations.
  4. Branding and differentiators.
  5. Number of client base served on a regular basis.
  6. Active database of candidates.
  7. Tenure of employees, succession plan.
  8. AR aging and business written off.
  9. Market share.
  10. Real estate owned.
  11. Profits.

It is also important that you as the owner do not represent more than 25% of the revenue generated by your company. You company must function and be profitable without your personal sales.

Barb

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