Hi Barb:
I’ve been in business for 12 years and often wonder if I’m building a business that would be considered a sound investment. What areas are most important to review?
Andrew B. San Jose, CA
Dear Andrew:
There are many things to review to determine if you are creating value in your business. Some of those would include the following 11 areas:
- Potential growth of your niche or area of specialization.
- Your business model, i.e. contract or blended firms create the highest value (re-occurring revenue model and contracts).
- Systems for sales, marketing, referrals, training, hiring and operations.
- Branding and differentiators.
- Number of client base served on a regular basis.
- Active database of candidates.
- Tenure of employees, succession plan.
- AR aging and business written off.
- Market share.
- Real estate owned.
- Profits.
It is also important that you as the owner do not represent more than 25% of the revenue generated by your company. You company must function and be profitable without your personal sales.
Barb