Selling your company one day could be enabled by doing less today
When owners and CEOs think about building the net worth of their company, they often think about adding to their business, not subtracting. They think about adding more capital, more space, more talent and/or more products or services . But sometimes less is more.
As Steve Jobs was quoted as saying, “I am more proud of what we didn’t do than what we did do.”
So before taking steps to add to your business, discuss these thought provoking questions with your key managers and see what progress driving dialog these could facilitate:
- What processes in our business are the most labor intensive? For each, when were these processes designed and are they still efficient and effective?
- Are we applying labor to activities that were once of value but perhaps are not any longer? Could we redirect labor to activities of greater revenue or profit importance?
- What are our top 3 expense categories? Have we identified productivity improvement initiatives we could take this year to reduce the expenditure (or hold them flat while we grow)?
- What is our annual expenditure for office/facility space and related utilities, insurance, etc? Before we consider adding more, are we optimally using what we have?
- Do we optimally manage the utility expense of our equipment? Do we regularly calibrate our equipment and ensure effective preventative maintenance protocols are in place?
- Are Lines of Credit or short/long term loans being optimally leveraged? Have we investigated any streamlining or new sources of funds that could be more optimal for us?
Before thinking about what to add to your business, ensure first that you are not missing opportunities to subtract first. The profitability of your company might be accelerated more by investing time and energy into initiatives that help you reduce labor, reduce raw materials, reduce space, etc. Meet with your team and brainstorm how less might be more on your journey of building your long-term company net worth.
