Is there a difference?

I talk with business owners all the time who are focused on one thing: moving forward.

How do we grow revenue? How do we bring in more customers? Should we hire another person? Should we open another location? How do we keep up with everything that needs to get done today?

Those are important questions. Growth matters.

But there is another question I wish more business owners would stop and ask:

What am I doing today that will make my business more valuable tomorrow?

That question can get lost when you are in the middle of running a company. You are solving problems, managing people, serving customers and watching cash flow. It is easy to measure success by this month’s revenue or this year’s growth and forget that the business you are building is also an asset.

And if you ever want to sell, transition, bring in a partner, or simply create more financial freedom for yourself, the value of that asset matters.

At solidCore CFO, I work with owners to look beyond the day-to-day numbers and understand what is really driving the strength and value of their business. That means looking at profitability, cash flow, operations, processes, financial reporting and the risks that could affect the company down the road.

So, where do you start?

1. Know Your Numbers

Revenue is important, but revenue alone doesn’t tell you what your business is worth.

You need to understand your margins, profitability, cash flow, customer concentration, expenses and the financial trends inside your company. Good financial information gives you the ability to make better decisions today and spot opportunities to improve performance before they become problems.

2. Build a Business That Doesn’t Depend Entirely on You

If everything runs through the owner, a buyer sees risk.

Look at your processes, your leadership team and the knowledge that currently lives only in your head. Can someone else step in and keep the business moving? Are responsibilities clearly defined? Are your systems documented?

Building a strong team and repeatable processes doesn’t just make your life easier. It can make the business stronger and more transferable.

3. Start Thinking Like a Buyer

You don’t have to be planning to sell your business tomorrow to think like someone who might buy it.

Take an honest look at your company. What would make someone want to own it? What would concern them? Where are the risks? Is the revenue predictable? Are your customers loyal? Are your financials organized? Is the business positioned for continued growth?

Those questions can reveal opportunities you might never see when you’re focused only on getting through the next quarter.

Building business value isn’t something you should wait to think about until you’re ready to exit.

It is something you can work on every day, through the decisions you make about your finances, your people, your processes and your strategy.

I have spent more than 30 years working in financial leadership, helping business owners improve profitability, strengthen operations and plan for what comes next.

My advice is simple: Keep driving your business forward, but every once in a while, put your foot on the brakes. Look up from today’s demands and ask yourself what you’re building for tomorrow.

Building a valuable business is the goal.

Linda Hammons, CPA
Managing Partner, solidCore CFO

Learn more at solidCoreCFO.com