by Karen Turnquist
Quick question: How much is your business worth?
If you’re like most business owners, there’s already a formula bouncing around in your head: revenues THIS and EBITDA THAT.
At one point in my entrepreneurial life, I was right there with you. I believed business value was simply the answer at the end of a complex math equation. Then came the day I learned the true nature of what makes a business valuable.
And it changed my life forever.
A revelation
It was several years ago and I was in the process of selling a finance company similar to Sage.
As part owner of the company, I knew our business had grown and had accrued considerable value. But my perception of that value was based purely on those ubiquitous magical formulas.
As the sale of our business unfolded, however, it became abundantly clear that business value isn’t as much about calculations as it is about what makes working at a company worthwhile.
Value attracts and creates fulfillment for the best employees. It offers the most benefit to customers. And, yes, it generates the highest ROI and profits.
In short, business value is the point of the whole thing we call “work.”
Building your company’s value
So how do you go about increasing the value of your own business? First, I recommend thinking about your business as if you were a buyer—regardless of whether you plan to sell your business.
And then focus on building your company’s foundation on strong:
- Core Values
The best leadership teams instinctively share core values. Once those principles are identified, they become the rules you live by—guiding everything from how you interact with clients to how you make decisions. - People
One of the most important predictors of a business’ value is its people. Attract talented people who exemplify your company’s core values. They’ll add to your business’ legacy and help take it to new heights. - Processes
Bad processes can mute the value of even the most talented people. So create systems and processes that are auditable, reliable, verifiable and scalable. With those traits comes consistency. - Brand Attributes
Create an expectation for your customers of what they will get when they interact with you. Identify the attributes that fit your company (e.g., reliable, trustworthy, creative) and exhibit them consistently.
The best part
So how did this revelation change my life forever?
It was the impetus for me and my business partner, Cathy Sedacca, to build Sage Business Credit.
We shared a vision of creating a business based on what made work appealing to us. And that’s working with entrepreneurs to provide much more than just financing. It’s rolling up our sleeves with our clients to help them build value as they work to realize their dreams.
Wanna know the best part?
It turns out that our vision is shared by a lot of really great people. We have a great team. And we love what we do.
It’s hard to put a value on that.
As the CEO and founder of Sage Business Credit, Karen Turnquist helps entrepreneurs build value in their businesses. She’s facilitated more than $2 billion in accounts-receivable financing for emerging businesses and believes there’s no greater reward than seeing fellow entrepreneurs succeed.