Are you tired of the same old New Year’s resolutions for losing weight, dropping your golf handicap, increasing revenues, reaching unrealistic profit metrics, or spending more time with the family?
This year consider a commitment to increasing your company’s enterprise value. So you might ask “how do I do that?” Well, there are many ways, and they are unlimited with the creativity you and your employees can bring to bear on the question. Here is a short list to start with. Really – the possibilities are endless.
- Start with a customer satisfaction and needs survey. It’s easy with simple online tools like Survey Monkey. It’s a great way to show your customers you care and find out how to please them in the coming year.
- Consider the concept of “Charge more but cost less”. What value can you provide, and get paid more for, that allows your customer to avoid another cost and appreciate the savings you helped them realize?
- Have your management team do a line item review of 2013 expenses to be sure you’re not budgeting in wasteful and unnecessary spending on things no longer providing value. With business valuations running from 4 to 8 times EBITDA, a thousand dollars saved has a real payback.
- Consider what other supplier alternatives exist in your market and be sure you establish relationships that allow you to communicate your needs and trade freely among several sources.
- Review the gross profit margins being achieved by the various people on your sales team. Who’s making the most margin for you and who’s not? Do you have the right incentives in place?
- Is there a service component you can offer for products you sell? What else can you do for your customers?
- Consider an outbound phone sales effort. Staying in touch with customers regularly often turns up unexpected opportunities. Don’t just be a reactive seller.
- Consider adding an online ordering feature to your company website. About that website too – is it really up to date? Is everything on it current? Does it reflect the best of your company’s capabilities?
- Become a regular contributor to your industry newsletter or your own company blog. Showing up as the expert author on timely topics will attract attention and customers.
- Can you add any consumable products to your product offerings? Regular contact from repeat business is a great way to build a sustainable customer base and reduce seasonal sales peaks and troughs.
- Consider what it takes to have a 10X growth strategy. Dan Sullivan, mentor to thousands of entrepreneurs, encourages business owners to think what it would take to grow your business ten times its current size. It’s amazing what you learn just by asking. Include your whole team in the process.
- Consider what other markets you could be serving – either other industries or other geographies. With a robust website and active online and social marketing tools you can easily reach large audiences today.
- Focus on your gross profit margins, operating margins and EBITDA margins – some of the best barometers of progress and success. In a $10MM/year sales business, an increase from a 10% to 11% EBITDA margin generates the equivalent cash flow of another $1.0MM in sales, but without any additional working capital or overhead to support the outcome.
With all the improvements you’ll be enjoying in your business from this exercise, the lower golf handicap will be easy, and there will be plenty of time for the family too. Good luck this year and enjoy the journey.
Posted by Peter Moore.