By Homer Smith
The daily decisions that go hand in hand with running your own business can be difficult if you do not have all the correct tools in your kit. Knowing the value of your business is critical to proper business planning as well as working towards your personal goals.
Here are 4 of the top reason to know your value:
- Assess your products and services — as a business owner, your name and reputation demand you always strive to deliver products and services of the highest quality. As you move forward, you will be asking yourself the same questions several times along your journey — will my product fulfil my consumers’ needs? Is the market still relevant for the product/service I am delivering? Is the pricing right? A thorough SWOT analysis of your product will shed light upon different aspects of your brand, and will help you identify key strengths and weaknesses, and how they can be overcome.
- Gauge the market and your competitors — the business environment is ever changing and evolves quickly. Circumstances can be heavily dependent on the exterior environment, the economy, and even current presidential administrations. Avoiding potential landmines means staying well informed, anticipating future problems, and having as many safeguards in place as possible. It is also imperative to know not only the market for your product and service, but your competitor’s as well. This serves as a crucial decision-making factor in charting the growth route of your business. The product/service should be strong enough to be able to withstand high profile marketing campaigns by competitors.
- Transparency — make sure to keep a record of all financial transactions undertaken by and for the business. In today’s environment where fraud and lawsuits are rampant, being transparent will add credibility to your business, and more importantly, is attractive to today’s consumer. Maintaining transparency will go a long way in adding goodwill to your company, ultimately leading to a gradual increase in equity. Completing a regular valuation provides an opportunity to build transparency into your regular business planning.
- Evaluation— a successful business owner monitors not only the value of his business but also how well as how it meets his or her personal goals. The value of a business plays a fundamental role in making future business decisions and financial planning, especially when matters such as the sale of your business or an insurance evaluation are at hand. Knowing what your company is worth is key to planning for the future of your business and that of your family, which can be difficult when you do not know how much your most valuable asset is worth.
Additional reasons for knowing your company’s value include: Knowing what your true numbers are, future sale of your business, insurance purposes, attracting investors, raising capital, business growth, legal and tax planning.
If you are like 98% of the business owners in the United States, you probably have not had an appropriate valuation done on your business for various reasons. The traditional valuation process is expensive, time consuming and a bit intrusive. We have created a business assessment process that will help you identify your business value and how it fits in with your long-term goals.
Click this link to start the process!