Business Basics: Building Value

When you start your business you might not be thinking about building value into it. You might just be thinking about having enough customers to stay afloat, play your employees, and hopefully have enough left over to pay yourself. But building value into your business is important. Basically you are reinvesting money wisely. You don’t even need to be thinking about selling your business to build value into it.


Building Value Wisely

While you might not be intending to sell your business, managing your business on a daily basis like you intend to sell is a great way to build value without thinking about it as building value into your company. In a sense, it is like adding equity to a house that you own: when you make improvement, keep the long term in mind. COnduct your business not simply for the present, but also for the future.


Here are some areas where you can focus your business to build value:

  • Clients: if you can sell your business with quality, long term clients attached to it, there is an amazing amount of value in that
  • Important employees: if and when you hand your business over, key employees that stay with the company make any transition much smoother and can be a massive asset
  • Your services: are you extremely specialized or can the work you do continue after you?
  • Intellectual property: trademarks, patents, and copyrights can all be huge assets to your company (like we discussed here)
  • Equipment and technology: these can be great assets as well if you have equipment that is relatively up to date
  • Financial systems: streamlined financial systems can save anyone who takes over your business tons of headache
  • Facilities: if you own your offices or buildings attributed to your company, those are massive assets that look attractive to buyers or anyone else you might want to pass the company on to


Invest in Your Business

The easy way to remember this is to think about investing in your business. Ask yourself if it will add value to your company in the long term. Even something like employee morale, which doesn’t necessarily have inherent or immediate value, has long term value for a buyer. Think about what you can do to help your business look and be as attractive as possible, and do those things to help build value, both cash and otherwise, into your company.