First Step in Creating Value in your Business: Staying focused on PROFITABILITYAug 21, 2023
Over the last few weeks, we have taken a deep dive into business valuation. It is WAY too common of a story to reach the end of an owner’s career and realize that the business is worth LESS than the money initially invested.
And to make matters worse, the business owner had NO IDEA this was the case.
This is the main reason behind our ACCELERATOR programs. We believe that it is not just a wish, but a must that you are CREATING value in your business daily. Trust me, your future self will THANK YOU when they are able to walk off into the sunset, receiving a healthy payoff for the value of the company they ultimately created.
But as we have seen in the struggles of recent years, this isn’t a given. Far from it. The reality is that most businesses fail. And the dream of a golden cup at the end of the rainbow is NOT reality for most business owners.
But if you are reading this, you aren’t most business owners. Somewhere inside is an ACCELERATOR. Someone who knows their business CAN be worth more than it is worth today.
So, if you are ready, the first and by far most important step is a commitment to profitability. Here are 4 things you must do NOW to focus on profitability in your organization:
- Establish specific profitability goals for the short and long term. If you haven’t done so yet please sign up for our FREE valuation mini course. Once you have the value of your business today, we will want to set a target for the next 12 months.
- Inventory Management: Implement efficient inventory management practices to avoid overstocking and minimize carrying costs. Did you know that not keeping a weekly inventory could be costing you as much as 5%? Without effective monitoring of your product, and the cash invested in this inventory, dollars are being left on the table.
- Target Profitable Markets: The biggest lesson over the last three years, is the fact that we must be creative with our revenue streams. If your sales aren’t where they need to be for a location to be profitable, we MUST be proactive. At the end of the day, whether a franchise or an independent, you are operating a commercial kitchen, with a front of house as a separate venture. In short, regardless of the franchise, the market, the customer base, or how badly the location has been run in recent years, if you wanted to drive revenue in your kitchen, it can and MUST be done.
- Commit to weekly accountability - as accelerators, the result matters less than the process. By evaluating our progress each week, we have the opportunity to ACCELERATE our progress moving forward. But if we don’t take the time to evaluate where we are, we will never reach out ultimate destination.
The exciting news is that you can and WILL accelerate your growth. Which means, as accelerators, we are going to do 2 KEY things this week:
Second: Commit to embracing our focus on profitability this week, regardless of the results. It isn’t whether we win or lose this week that matters. It is the fact that we show up as accelerators and commit to moving our business closer to profitability NOW. I promise, your future self will thank you!