Finally, 2022 is in the books. Good riddance.
If your goal is to build a more valuable company in 2023, here are some New Year’s resolutions to consider. Some may seem obvious and a bit basic but it never ceases to amaze me how often they are overlooked.
- Stop chasing revenue. A bigger company is not necessarily a more valuable one if the extra sales come from products and services that don’t offer good margins or are too reliant on you to deliver them.
- Start surveying your customers using the Net Promoter Score methodology. It’s a fast and easy way for your customers to give you feedback, and it’s predictive of your company’s growth in the future.
- Sell less stuff to more people. The most valuable companies have a defendable niche selling a few differentiated products and services to many customers. The least valuable businesses sell lots of undifferentiated products and services to a concentrated group of buyers.
- Drop the products or services that depend on you. If you offer something that only you can produce or sell, consider dropping it from your offerings. Services and products that require you suck up your time/cash and they will inevitably be discounted by a buyer.
- Collect more money up front. Turn a negative cash flow cycle into a positive one and you boost your business’s value and lessen your stress load.
- Create more recurring revenue. Predictable sales from subscriptions or recurring contracts mean less stress in the short term and a more valuable business over the long run. This may require major changes to your business model but it is worth it.
- Be different. Refine your marketing strategy to emphasize the point of differentiation that customers value. Be relentless in highlighting this advantage.
- Find a backup supplier for your most critical vendors. Consider placing a small order to establish a commercial relationship and diversify the sources of your most important inputs (services & materials).
- Teach them to fish. Answer every employee question of you with “What would you do if you owned the business?” Your goal should be to cultivate employees who think like owners so they can start answering their own questions without coming to you.
- Document All Key Processes. Having processes that are well documented and teachable is the key to successfully scaling a business. It is a tedious process but well worth it.
Here’s to building a more valuable company in 2023!