As a business owner, you likely spend most of your days – and many of your nights – thinking about the daily operations of your business. Retaining customers, analyzing the competition, marketing services and products, tackling human resource issues…the list is endless.
“It’s easy to get caught in the weeds of your daily operations and lose sight of the long-term needs of the business,” says Michelle Ellis, business advisor at Pinion. “All owners should ask themselves, ‘Are you running your business, or is your business running you?’”
Below are five best practices to ensure you are at the driver’s seat, moving your business forward in the right direction, not getting pulled along for the ride.
5 Best Practices to Drive Your Business Forward in 2024
- Manage your business like a personal investment. For business owners, the largest asset on their personal balance sheet is typically the business. Manage that wealth in the same way liquid wealth would be managed: pay attention to your share prices, measure capital appreciation and ROI on a regular basis and actively manage your company investments.
- Work on the business, not just in the business. Set aside time every month to devote to long-term planning. Consider your long-term goals for the business, examine your own role in the process, and share your vision with your leadership team. Challenge your team to develop the same habits.
- Evaluate your business’ value on a regular basis. Use business valuations as a measurement tool to optimize and guide your business. Understand what your value drivers are so you can sell high one day. Owners who are aware of their business’s value at every stage of its lifecycle are more likely to avoid unpleasant surprises when they eventually pass down or sell the business.
- Plan for ownership transition. Get ahead of and plan for life events that could happen. Don’t wait for a ‘triggering event’, like death, divorce, stockholder dispute, sale/transfer opportunity, change of tax law, to take action. Consider the benefit of business tools like succession planning, wills, life insurance on key stakeholders, estate planning etc. Put plans in place before they’re urgent and necessary.
- Seek step-by-step guidance for obtaining liquidity. Many business owners tie up their wealth in illiquid assets. To lower your risk profile, diversify your assets by ensuring you have a healthy balance of liquid and illiquid assets.
“Tending to the long-term business needs can help you run the day-to-day operations with more intentionality and focus,” adds Jim Rein, Pinion Next Gen advisor. “Merely having these practices in place compels owners to perform at an optimal level.”
To dive further into this topic, watch Pinion’s free webinar: “Managing Your Company Like the Investment It Is”
Pinion Business Valuation and Next Gen Planning experts help business owners unlock private company wealth. Contact us to learn how our advisory team can proactively uncover and manage the value drivers in your business as an investment for you.