How to create value in your business
Growing a business is a never-ending project, and one that requires a significant degree of effort on the part of business leaders. This is especially true against the backdrop of imminent recession, where the odds are stacked firmly against business growth. To weather the storm, and ensure a solid foundation post-recession, business owners should start by engaging with their business’ ‘value’. What constitutes value, and how can it be increased?
Building reputation
A business’ value is most conventionally understood as a function of consumer interest and engagement. It is a simple equation: the more customers buy into a product or service, the more valuable that product or service to a market or demographic. But the relationship between your business and your clients is much more complex than this – and reputation has a key role to play in the establishment of value.
Reputation is itself built from careful consideration of multiple angles. The product or service itself needs to be of a quality, as does the customer service that underpins its delivery. Not only this, but the brand’s public image needs to suit the business’ needs while meeting consumer standards. Altogether, a positive brand image and concerted effort to meet consumer needs improves product – and hence business – value significantly.
Building employee trust
Reputation is not just a consumer-side concern, though. It is also vitally important to build a positive and equitable relationship with internal staff, in order to incentivise the best possible performance and the most comfortable company culture possible. Again, there is more than one way to tackle this.
Reducing the amount of time staff spend on data entry and other administrative tasks is one way to remove monotony, and increase time spent on company-furthering projects. This can be effected through the implementation of human resources management systems that can host training documents, employee requests and even onboarding resources.
Expanding equitably
Value is often attributed to growing companies over steady businesses. This is because growth implies potential, and potential is worth much more to business investors than steady predictability – in spite of the heightened risk associated with growth. If your business has a strong foothold in its industry, it may be primed to expand, whether logistically or territorially.
The mistake that many businesses make here is expanding too quickly, or too readily. Even if the market is ready for expansion, a business can cripple itself by overreaching and overspending; in so doing, a company might, despite record profits, find itself in negative cashflow. Investors and stakeholders are averse to the risk presented by negative cashflow, and more likely to pull the plug on their funding or advice.
As such, your growth plan needs to be itself steady, and equitable with regard to the funds and resources you have available. Preserving positive cashflow where possible, while shrewdly investing in piecemeal expansion, can win you the best of both worlds and convey value – not only in the eyes of investors, but also through new consumer reach.
