A Focus on Customers can Drive Value and Grow Your Business

A Focus on Customers can Drive Value and Grow Your Business

Whether you are planning on selling or transitioning your business or are simply evaluating how you can grow or expand your business now, a focus on customers will help your business determine how to drive value.

There are many value drivers that can be considered and evaluated before you think about selling or transitioning. A potential buyer will analyze all aspects of your business: financial, sales, leadership, marketing, operations, technology and customers among other factors when determining transferable value.

How your business is engaged in marketing, branding and building customer relationships are important value drivers that can increase the attractiveness to a potential buyer.

Understanding that your business value is dependent on customers, their willingness to pay for your product or service and keep paying, is the first step. You may have already built great customer loyalty and brand awareness, but you may not have it documented or measured it in a valuable way.

Working with an exit planner or strategic value builder in advance of a sale (three to five years ideally) will provide a process to evaluate your existing marketing plan and put actions in place to build out the plan and increase your value proposition.

A well-developed, written marketing plan can help you build on what you have and implement strategies to maximize growth opportunities and increase sales. Boosting sales from existing customers, bringing in new customers and standing out with a strong marketing presence will build a stronger more attractive business.

Focus on your customer, find out what they value in your product or service and document it. Customer relationship management (CRM) tools and processes can help capture and analyze client data. Implementing techniques like customer surveys, client follow-up processes and customer reviews provide quantitative and qualitative data on what you do well and what can be improved.

Also, an in-depth view of your client segments, geographical segments, buying trends and client behaviour will help determine where there are opportunities for growth or possible risks. For example, there may be a risk if your customer base is highly reliant on a few customers or if they are all located in a single market. Another potential risk to consider is your sales process and who holds the key relationships with key clients.  Is there a process to train and transition the client relationships on an exit of an owner or loss of a key employee? A potential opportunity may be that most of your referrals come for a specific client segment that can be further developed.

Take time to research your competition. When it comes to products, services, marketing, pricing and distribution, ask yourself:  

  • What do you do better?
  • What do they do better?
  • What can you improve upon? 
  • What do you want to be known for?
  • What makes you stand out?

Understanding your market and developing your ideal client profile with a clearly defined value proposition will provide the foundation for your marketing strategies. Sales and marketing strategies can be developed to ensure you allocate your efforts in the right places.

When you create more value in your business than your competition, you have a more sustainable future.

If you have any questions or want professional advice on how to build value in your business, connect with us.

Building Value and Preparing for Business Transitions

Building Value and Preparing for Business Transitions

In the next 10 years we will see a large percentage of businesses change hands. Research done by BDC Canada shows that 54% of entrepreneurs expect to leave their business in the next four to five years. Business owners need to evaluate their businesses now and put a plan in place to ensure the value of their business is at its highest when the opportunity arises.

Building a transition plan takes time and may include a variety of strategies, stakeholders and professionals to execute.  Working with an exit planner to build a formal process with written goals, actions and timelines will help owners build value and enhance the attractiveness of their business.

There are many options for owners on how to exit their business including: family succession, sale or transfer of control outside the family and winding down or selling assets. To prepare for a successful transition the business needs to assess the knowledge, skills, leadership and client relationships that are reliant on the current leader if transitioning the business to a new owner(s).

When the successor is known an assessment can be completed to determine the skills, strengths and areas for growth to build training and development plans for the next leader. If the successor is not known there are strategies to consider to enhance value for future management and leadership transitions.

Owners need to think about how long they are prepared to stay around after the business is sold. Expectations between the buyer and seller need to be discussed during the process. When the business can succeed without the seller on a day-to-day basis the business is more likely to succeed. An owner can plan for the transition and be in a better position for a possible sale.

Key areas owners need to think about:

  • Does your management team have the skills and experience to run the business after you leave?
  • Do you have any key staff contracts in place that would be essential from a purchaser’s standpoint?
  • How reliant is the business on you and your expertise or an any other single person?
  • How long are you prepared or willing to work during a transition period?
  • Does the business have human resource policies and employee or training manuals in place?
  • Is there an organizational chart in place with clear job titles, job descriptions performance reviews and training plans in place?

Working with an exit planner in advance of a sale (three to five years ideally) will help an owner and their team assess the areas of the business where transfer of leadership, knowledge and skills are necessary to prepare for a future sale or transition. It will also identify other areas in management and human resources that can be improved to increase the attractiveness of the business to a potential buyer.

If you have any questions about transition and exit planning or how to find a Certified Exit Planning Advisor to help you start yours, connect with us.