Healthy Business Practices for Entrepreneurs
Two roads diverged in a wood, and I—
I took the one less traveled by,
And that has made all the difference.
Owning and operating your own business is not for the faint of heart by any stretch. Far from smooth sailing often, and gratification is rarely immediate. Akin to raising a child, your business is bound to give you many sleepless nights, demanding all your attention and testing your resolve at every stage. If you've persevered, you've hopefully been rewarded.
But according to the SBA, 98% of small businesses have never undergone a business valuation. Done the traditional way, they can be expensive and time consuming. And yet, without that critical knowledge of true worth, nearly 80% of business owners are still relying on the sale or leverage of their greatest asset for financial freedom in retirement.
While realizing success can certainly be gratifying, we all know that getting there is another matter, requiring both awareness of fundamentals and openness to suggestions from those who've made it along the way. Here are a few healthy business practices that may help — Each can be bolstered by undergoing a true valuation of your business.
- Assess your product— Are you constantly asking if and how your product/service satisfies consumers’ needs? Is there a growing market for it? Is the pricing right? Are there industry benchmarks that can be used? A thorough SWOT analysis of your product will shed light upon different aspects of your product, and will help you identify key strengths and weaknesses, and how they can be overcome. Our business valuation platform can also be critical in this assessment.
- Gauge the market and your competitors — the business environment can be like a warzone. There can be landmines everywhere, tread lightly as opposed to plodding along, or the consequences can be devastating. Is your finger on the pulse of your market? Your competitors? If only 2% of businesses have undergone a true valuation, this is a window of opportunity for you.
- Evaluate yourself— successful business owners are usually their own toughest critics. The TRUE value of a business plays a fundamental role in making future business decisions and financial planning, especially when matters such as the sale of your business or an insurance evaluation are at hand.
With Sterling Newton/BizEquity's business valuation software, valuating your business has never been easier. A detailed 29 page report elucidates the different aspects of your business and determines its total worth through a seven step process. All this at 1/25th the normal cost or even included in our initial tax strategy analysis…and in a fraction of the time it would normally take.
4.Transparency— make sure to keep a record of all financial transactions undertaken by and for the business. In an environment where fraud and lawsuits are rampant, being transparent will add credibility to your business, and create a favourable perception in the minds of stakeholders. Knowing the true value of your business will allow you to have confidence in your mission…and it will be apparent to all.
5. Set realistic expectations— at each stage in the life of your business, you don’t need to go win 8 Olympic golds like Phelps in 2008; it’s important to set expectations that are reasonable and achievable. Don’t trudge into waters deeper than you can survive in. It’s essential to take on as much as you can handle, and no more. It's not really worth compromising on the quality of your product/service, which can have a detrimental effect on the credibility and value of your business.
While owning and operating a business is one of the most worthwhile and rewarding endeavors any of us can imagine, sustaining it and maintaining its viability can be even more daunting. Try these suggestions, along with a meaningful, reliable business valuation, made easy by Sterling Newton and BizEquity. It will help you take obstacles head on with more confidence and resolve, ensuring a first-place finish legacy in this ultra-marathon of entrepreneurship.
(and our partners, BizEquity)