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W W W. M A I N E B I Z . B I Z 13 JA N UA R Y 2 5 , 2 0 1 6 H OW TO B Y D O U G P A C K A R D W hen it comes time to contemplate retirement and sell a company, many business owners wait until a year or two from the transition to evaluate the value. But the ideal time to start think- ing about a strategy is actually from the inception of the business plan. Even if you have not yet done this, you can still maximize the value of your company by the time you reach the exit stage by taking the perspective of potential buyers and investors. ey will look at areas of your company to answer two key questions: What's the most likely return on investment? What are the risks? Whether you are about to turn over the keys or just starting out, the best way to increase the value of your business is by addressing the ROI and risk factors imbedded in the following areas: 1. Achieve consistent profi ts: Profi ts are the primary indicator of your ability to provide value above costs and your diff erentiation from competitors. 2. Identify growth opportunities: Maintain a prioritized list of future growth opportunities, whether it's with new products and services, greater capacity (without increased overhead) or expanding into new geographies. To develop this list conduct regular strategic discussions with peer groups, selected customers and vendors, and even potential acquirers. 3. Improve cash fl ow: Does your company require a lot of additional investment to keep growing? If so, search for strategies that can get your business closer to being able to self- fund growth. Investigate strategies like requiring deposits, up-front pay or even subscription services. 4. Get out of the center of the wheel: e more the business depends on you, the less value it holds. A leader needs to methodically and regularly transfer at least their operational duties to others in the organization. 5. Increase revenue predictability: What is the probability that your various revenue streams will continue? Do you have an over-dependence on a limited customer base? You want revenue to be recurring, predictable and ideally under long-term contracts rather than coming from a few, large-one-time projects. 6. Implement customer feedback systems: If you can demonstrate customer feedback has improved or remained steadily high over time, potential buyers will consider you less risky than alternatives. 7. Implement succession planning and employee engagement systems: A new owner will want to know how solid the organization is. Are employees likely to stay on board after you leave, and if key people leave, are trained backups ready to step in? is concern can be addressed by having a solid employee satisfaction (or engagement) survey system and a succession planning and leadership development process. 8. Document processes: is involves creating manuals, standard operating procedures and policies so your successes can be repeated. is approach also allows your business to expand effi ciently. 9. Maintain high-quality vendor relationships: Try to strike a balance among a few suppliers so you have fl exi- bility to change if necessary. Also be sure to maintain a strong reputation among all your vendors so that a potential buyer feels as though they are stepping into strong, long-term partnerships. 10. Manage your personal brand: Your personal reputation among all your stakeholder audiences is critical. How do they describe you, and do you live the values you preach? Manage your reputation across all key groups by gath- ering personal feedback regularly. is way, you can continuously improve your performance and your satisfaction with your leadership legacy. Even if you don't plan to sell or retire soon, success in these 10 areas represents the characteristics of an outstanding, stable and scalable busi- ness. You will sleep better knowing your business is solid and you have minimized the risks. D o u g Pa c K a r d , C E O a n d owner of Renaissance Executive F o r u m s – M E / N H a n d Doug Packard Consulting in Portland, can be reached at DPacKard @ D o u g Pa c K a r d C o n S u l t i n g . c o m Maximize the value of your company Better Talent. Guaranteed. Pemberton & Associates recruits exceptional talent for many of New England's top organizations. Financial return on human capital is driven by employee performance and tenure. Protect your investment with P&A's new two and three year guarantee options on executive search. Our mission is your success 97A Exchange Street Portland, ME pembertonhr.com • 207.775.1772 • inquiry@pembertonhr.com 162 Main St., Freeport, ME • (207) 865-9377 info@harraseeketinn.com • harraseeketinn.com Professional Facilities With A Personal Touch Freeport, Maine's Premier Meeting Space and Hotel

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