In a competitive landscape, every company strives to differentiate itself. But true differentiation goes beyond just a catchy slogan – it’s about building a business with inherent value that sets it apart from the pack. Businesses that “stand out” have higher market valuations, increased investor interest, and stronger positions in future acquisitions.
Standing out isn’t always easy, but adopting the right strategies can help. Mastering these 6 strategies will set you apart from the pack.
1. Set up recurring revenue streams
Subscriptions, contracts, and memberships provide a clear picture of future cash flow, making your business more attractive to investors and potential buyers. If your company doesn’t currently have any recurring revenue streams, create them! Develop subscription-based offerings or implement long-term service contracts. To keep your customers coming back, focus on customer retention and loyalty programs.
2. Seek out growth opportunities
Rapid and sustainable growth is a major indicator of a company’s potential. Invest in data analytics to identify growth opportunities, and implement a robust sales and marketing strategy to reach new customer segments. Prioritize organic growth, but consider strategic acquisitions that complement your core business. By demonstrating a clear path to increasing market share and revenue, you lower the perceived risk of investing in or acquiring your business.
3. Make sure your business is “predictable”
Predictability might sound like a negative attribute, but being predictable can actually increase your company’s value. Documented and efficient operations models, reliable suppliers, and strong financial forecasting models are all signs of a strong business. Ensure your business is predictable by maximizing your operational efficiency, developing strong relationships with reliable suppliers, and implementing strong financial controls and reporting practices.
The Wealthpreneur Lesson
Business Value Is Earned, Not Inherent
Creating a truly valuable company is an ongoing journey, not a destination. Focusing on recurring revenue, growth opportunities, predictability, clean records, capable employees, and customer satisfaction will help you build a business that stands out from the competition, is more transferrable, and will sell for more money.
The most valuable companies consistently improve, grow, and adapt to the changing landscape. Building your business plan around those goals will increase your value more than any quick fix ever could.
4. Keep clean records
Investors and potential buyers need to have complete trust in your financial health. Investing in strong accounting software and procedures, conducting regular audits, and being transparent in your financial reporting will ensure your books are clean and accurate. If the IRS (or a skeptical investor or buyer) comes knocking at your door, you will have all the answers they need.
5. Find a strong #2 person
A capable and experienced second-in-command ensures business continuity and leadership stability. Your business is not very attractive to buyers if it needs you at the helm to stay afloat! Develop a strong leadership pipeline and invest in mentorship and training for high-potential employees. This ensures you will be able to transition out of your company – or simply take a break – with the confidence that operations will continue to run smoothly in your absence.
6. Prioritize exceptional customer service
Customer satisfaction is paramount. Happy customers become loyal brand advocates and generate positive word-of-mouth marketing. Create a customer feedback loop and act on as much feedback as possible. Develop a customer loyalty program to reward repeat business and create a form of recurring revenue for your company.
