Each Monday we focus on one activity you can do today or over the next week to build yourself a better business. These short, actionable posts will show you what steps you need to take to take your business to the next level.
In case you’ve missed the previous posts, you can catch up here: 20 Days to Build A Better Business.
This is Day 5: Become An Investor
When you’re working in your business, your energy and focus is spent on day to day operations, fulfilling orders or finding your next customer.
Chances are you’ve never thought of selling your business and we’re not suggesting that you should (unless of course you want to), but think about your business as if you were going to sell it one day.
When you look at your business the way a potential buyer would look at it, you notice things that you might otherwise ignore. Investors would only buy a investment if they can make a return on their investment. They would seek to maximise opportunities that the business already has before investing more money in developing new products or new lines of business.
You need to think “if you were buying this business where could I unlock value?”. If your business is online, how could you increase conversions? If you were a bricks and mortar store, think about your store layout or your shop frontage. Is it as attractive to your customers as you would like it to be? Is the layout confusing, are the staff helpful and friendly?
We’ve worked with businesses under threat of takeover and they start focusing on cost reduction and trimming the fat to make themselves less attractive to a bidder. Where could you trim costs without stripping value?
Looking at your numbers like an investor would might also lead you to differnt conclusions about your business. How do your margins compare to other businesses in the average in your industry? Looking at your products and services, do some products/services cost more to deliver than others? Are you charging enough or can you reduce costs? Should you be stopping products or services because they don’t make enough money – or maybe you combine products and services and add value?
Look at your competitors, what is their business model? Is there anything you are offering and they don’t or vice versa. Can this be capitalised upon at all? Are your prices right?
When you’re working on your business day to day, it’s easy to get drawn into the challenges of running your business. Taking a good hard look at your business as if you were going to sell it will lead you to ask a lot of questions which you just don’t get time to think about.
So, for today, start thinking like an investor and start building a business to sell (even if you have no intention of doing so).
When you looked at your business as if you were an investor, please tell us in the comments section below what you’ve found and what you’re going to do about it.