It’s the start of a New Year, and the perfect time to make some hard decisions about how to position your company for a more prosperous future. To me, success in business ownership is not just about generating a reliable income but building the equity value of the business too.
A worthwhile objective is to build a company over time that is worth two, four or ten times the amount of your cash investment.
Here are 5 easy action steps to fire up your business planning for 2013:
No. 1: Know the value of your business.
What is your business worth today? Not to you, but to potential investors or business buyers? If you don’t know how your industry values businesses, then it is challenging to know what types of initiatives will be most financially rewarding to you.
Having a good grasp of how businesses are sized up in your industry can also stop you from over-investing your business. Yes, it is possible to invest a $100,000 of your personal savings into a business that independent investors and business buyers say is worth no more than $10,000.
No. 2: Upgrade your board.
Do you have a board of directors? If not, 2013 is the year to form a board that will inspire you and help get your company to the “next level” of growth. Boards are a great way for cash-strapped companies to add strategic expertise before they are able to hire management talent. If your goal is to sell your company’s products in China, why not identify a board member who has already “been there – done that?”
If you do have a board of directors, the start of a new year is a good time to evaluate the usefulness of all board members. Graciously dismiss board members who don’t show up to meetings or have the skills to help your company advance.
No. 3: Conduct employee reviews.
When was the last time you sat down with your employees to discuss their individual work performance? Was it several years ago? Never?
Employee salary and benefit costs are likely to be a company’s highest annual expense item. Boosting employee performance can have a significant impact on your company’s operations, provided that you invest the time to align staff members to your top priority work objectives.
No. 4: Fire poor performance.
Successful entrepreneurs strive to earn a positive return on their invested cash. It’s time to fire any employee who doesn’t exceed your expectations for work performance. The longer you wait to take corrective action, the more money and opportunity your company will lose. The reason to keep on an underperforming employee should not be that you don’t “have time to find someone better.” You do. Actually, you can’t afford to spend your time anywhere else.
No. 5: Commit to solicit more business.
It’s common for business owners to complain that “business is dead.” When I drill down into the details of the business owner’s work day, I usually find that not much time is allocated to securing new customers, distribution relationships or strategic partnerships. If you want new business, you have to go get it. Start each work day actively soliciting at least five new customers, distribution relationships or sources for business referrals. Don’t visit Facebook or review last nights sports scores until you have solicited at least five. This is the most reliable way you can build your company’s customer base in 2013.
It’s ironic. Entrepreneurs are very good about identifying what in the world needs improvement, but they hesitate to institute meaningful change within their own companies.
Come back to FoxBusiness.com for new in-depth articles on each of these action steps in the weeks ahead.
Here’s to a prosperous and purposeful 2013!
Susan Schreter is a 20-year veteran of the venture finance community and entrepreneurship educator. She is the founder of www.takecommand.org, a community service organization that offers the largest centralized database of startup and small business funding sources in the U.S. Follow Susan on Twitter @TakeCommand.