Selling A Business: Tips To Improve Company Valuation Thru Better Efficiency

When a business owner contemplates how to market a small business, they often look for quick strike tasks that will enhance productivity and, subsequently, business valuation.  You might not have the time, money or will for a massive projects like enterprise-wide business procedure re-engineering task that encompasses large teams and sophisticated software.  Instead, think about scaled-down scale, targeted workflow advancements to improve business efficiency and worth.

First, a few terms to evaluation.  A business process is a coordinated set of actions that produce a company result, and business process mapping is documenting them.  An example process would be opening a client account or generating a purchase order.  The mapping objective is to capture how the different parts of an organization work together to serve customers.

The result is a process map, or perhaps a visual representation of the process that displays inputs, outputs, duties performed, and job sequence.  There is very a set of nomenclature and tools around this, modest be set off.  For very easy and small projects, we have utilized post-it notes and a very big wall.

When first launching a work flow enhancement work, you should choose which work flows to redesign.  Just a couple points to consider include when making that decision:

• Follow the money… Which operations are crucial in generating revenue? Which use a high degree of resources exactly where price reduction opportunities may exist? What procedure brings the most worth to the customer.
• Where would be the difficulties? What procedure or group appears to trigger the most difficulties? Where is there a strong quality enhancement need? Which of those operations seem to have the highest effect?
• Where can technology make a substantial procedure enhancement?
• Which processes cross the most organizations inside the business?
• What improvement would possess the greatest positive effect on selling the company and its business valuation?

Process mapping has become a crucial company analysis and quality enhancement tool.  It builds an realizing of the process as it is presently performed, then determine gaps, dangers, and possibilities to boost it.  At a high degree, we are asking the basic queries:

• What is happening?
• When it is happening?
• Who is performing it?
• Where it is happening?
• How much time does it take?
• How is it being done?
• Why is it being done?

                                            
It is through seeing a visible representation of complex activities that we can discover ways to streamline work flow and improve business performance.  Once you see it, you can work on it.

There are various components to capture when mapping and redesigning workflows:

1. The process goal and owner.
2. Inputs – what is coming into the process
3. Group – will be framework of the process
4. Processes – what group of activities to consider to send and receive of scope, and what those actions are
5. Individuals – the roles and responsibilities of individuals included in the process
6. Items – what is getting processed (products, customers, patients)
7. Outputs – what is being subtracted from the program
8. Outcomes – the effect from the outputs
9. Suggestions – constant information on how what you are doing

Quick pointers include organizing around outputs, not tasks, functions or items.  Style processes for simultaneous processing and link steps instantly.  Capture all essential info once and on the supply.  Think about such as the customer in the way enhancement work.

While you document the operations, keep an issues checklist of problems, and possibilities for positive change.  Upon having the current processes documented, start to evaluation how to boost them.  As you review the visuals and the issues checklist, some changes may be evident.  Other thought provoking questions to think about are:

1. Are there best tactics you should be considering?
2. Is there a technology that could make a dramatic improvement and or would carry out best practices?
3. If time, money, labor, technologies, along with other means have been not a concern, what would the ideal process seem like?  What is the barriers and risks to implementing it, and how could they be mitigated?
4. What in the act is considered high value or a differentiator by the marketplace and by a possible buyer?
5. What do we have to say is our core competency?  What can we outsource?

Although this is a brutally brief overview of process enhancement, it ought to demystify it for you personally.  Small process advancements could be fast strike tasks that can improve the performance and valuation of your own group while you move to sell a business.

I invite you to utilize these suggestions throughout your journey to sell a business.

Marian Cook is a highly sought after business transition expert and speaker with over 25 years experience helping business owners design their best-life exit strategy, and improve their business performance and valuation.  She is the co-author of “Selling Your Business For More:  Maximizing Returns For You, Your Family and Your Business” (published by Macmillan).  If you are ready to sell a business and jump-start your business sale process, connect with Marian via her free tips, articles, checklists and blog at Business Transition Experts.