4 Things that Could Kill Your Business (and How to Prevent Them)
When you start a new business, you are hoping that it will provide you with a good living.
But there will come a time when you want to retire, or maybe much earlier just move on to something else. Then the value of your business becomes important and you do not want anything to reduce its saleable amount.
Good Record Keeping
You want any potential customers to trust what you are telling them when you tell them. The information will look much more credible if your records are in good order. Sloppy records will sew a seed of doubt in their minds and could reduce the amount they are prepared to pay.
As part of your systems, you should have sound security measures in place at all times, so that if the worst happens and the systems fail you are ‘not open for business’ for very long. The cost of disaster recovery services is definitely an investment worth considering, as then if, for instance, hackers attack you, the business can be up and running again very quickly.
Do not let any business you start become reliant on one supplier or customer. A supplier will have you in a situation where they can dictate terms and that could make you less profitable. If a potential buyer sees your gross margins dropping year on year, they will not be too keen to purchase your business.
Being far too reliant on one large customer will decrease the value of your business because there is no guarantee they will stay loyal to the new owners long-term. Keep as large a range of customers as you can and then it is up to the new owners to maintain your customer base.
You should also make sure that your business runs just as well if you are not around. A business that is reliant on the owner being present is not going to be worth a great deal of money at all.
The quality of employees is a crucial part of any business. If you have some that are vital to the smooth running of your business, ensure they meet any potential new owners and let it be seen how much easier they could make the changeover be. Familiar names and faces for customers and suppliers will help to keep the business running without any problems.
This is an advantage to the new owners and the employees so is well worth making the effort over.
Any potential buyers are likely to check your business out on review sites. You cannot control what people say on these sites but you can try to ensure that there is as little negative feedback as possible. Always deal with any customer complaints in a positive way, so if the reviewer had a problem they can at least say it was dealt with to their satisfaction.
The higher the satisfaction level of your customers, the more likely you are to receive an offer somewhere near the amount you are hoping for.