Mind the Gap - Why You Need a Plan to Build Value in Your Business

I’m going to make an assumption here, so please bear with me. The assumption is, that you belong to the 99% majority of business owners and not the 1% minority.

So you don’t have a plan in place to maximise the value and future sale price of your business.

Why not?

There are many reasons. More than likely though, it’s because you are focused on growing sales and profits instead.

Let me be absolutely clear.

If you do not have a plan to grow the value of your business, you are selling your future self down the river.

Oh, you say, I’m not planning on selling any time soon. 

Not. The. Point.

Your business should be built to sell, even if you have no plans to sell it.

Why?

Firstly, because if you focus on building business value, you will by default boost growth and profitability.

Secondly, because you need to close the value gap.

You don’t know it yet, perhaps it hasn't occurred to you. But I can tell you this with some degree of certainty:

There is a gap between your current business value and your desired future sell price.

This is known as the value gap.

So where is your plan to BRIDGE the value gap?

Because when you come to sell your business, it’s too late to start.

Here’s an important thing to remember - you aren’t always in control of the timeline when it comes to selling your business.

So how do you bridge the value gap?

Of course, anyone will tell you to grow your profits. I would tell you the same.

But growing profits is not a plan to build your business value.

That’s just one plank of a plan. The other 4 planks are:

1. Reducing risk
2. Systematisation 
3. Building capacity
4. Financial control

I won’t go into the detail of these points here, because that’s a subject for another day. 

I’ll be happy for now if I’ve made my case.

• The value gap is real

• You need a plan to bridge it

• Focusing on growth and profits isn’t enough

So mind the gap – get yourself a plan. 

Your future self will pat you on the back.

About the Author: Alistair Dent is a business advisor, consulting accountant and the managing director of Quantum Advisory. The team at Quantum Advisory help business owners right around the country supercharge their companies, become more profitable and plan for the future. You can find out more about QA by following their LinkedIn page or checking out www.qagroup.com.au 

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