She Means Profit

Maximizing Your Business Value: Five Essential Tips

• Melissa Houston • Season 2 • Episode 173

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Have you ever thought of your business as more than just a source of income?

In this episode of She Means Profit, I’m diving into the idea of treating your business as a financial asset—one that can appreciate over time and build lasting wealth. Whether you’re planning to sell your business in the future, use it for retirement income, or create a legacy, the steps you take now to increase its value will pay off in the long run.

Owning a business isn’t just about short-term gains; it’s about building something that lasts. In this episode, I share five powerful tips to help you enhance your business’s value, including creating strong financials, implementing scalable systems, diversifying revenue streams, building a strong brand, and focusing on customer retention. These strategies aren’t just for those looking to sell but for anyone wanting to maximize their business’s potential. Think of your business like real estate—investing in it now can lead to significant appreciation later.

I also touch on how these strategies align with the Profit Method Framework and share insights from my journey. From understanding profit drivers to automating systems and building customer loyalty, this episode is packed with actionable advice to help you create a business that not only supports your current lifestyle but sets you up for long-term success. Tune in to learn how to transform your business into a true financial asset.

Black Friday Sale on the Profit Method Framework Suite

It’s Black Friday week, and for a limited time, all courses in the Profit Method Framework Suite are 20% off!

Sale Dates: November 25th – December 1st (11:59 PM PST)
Promo Code: HOLIDAY2024BF (all caps)

Take advantage of this exclusive offer and invest in your business’s growth. Use the code during checkout to unlock your discount.

Listen to learn:‌

  • Treat Your Business as a Financial Asset: View your business like real estate—an investment that can grow in value over time through thoughtful improvements and management.
  • Build Strong Financials: Keep detailed and clean financial records that demonstrate profitability and stability. Manage your margins and understand key profit drivers: pricing, expense management, and sales volume.
  • Create Scalable Systems: Implement processes and automation that allow your business to grow without requiring your constant presence. Develop standard operating procedures (SOPs) to improve efficiency and increase appeal to potential buyers.
  • Diversify Revenue Streams: Avoid relying on a single product or client. Add complementary products, explore new markets, and consider passive income opportunities to reduce risk and increase stability.

Links:‌ ‌  

Courses:

Work with me:

Follow me on:

IG: @melissahoustoncpa
LinkedIn: @melissahoustoncpa

Note: We use AI transcription so there may be some inaccuracies

Melissa Houston: Welcome to episode 173 of She Means Profit. So today we're diving into a topic that's at the core of every successful entrepreneur's mind, the true value of business ownership. We often think of our businesses as sources of revenue, but they are so much more than that. If you've ever heard me say it, your business is not only a way to generate income, but it is a financial asset that if managed correctly will appreciate and value.

So as you grow your business, the value of your business will increase. This is not just about short-term gains, but this is a long-term wealth creation strategy. So owning a business can be one of the best ways to build a lasting, Financial legacy. So in this episode, I'm going to share five essential tips on how you can increase the value of your business.

Whether you're just starting out or you've been running your business for years, you need to implement these strategies so you can maximize the potential of your asset Which is your business. if you're thinking of selling your business down the road, when you have a strategy in place, it will command top dollar for your business.

And top dollar means that, if you're using it as investment income or retirement, It is going to be a very fruitful sale if you follow these tips, but before we get into that, it's Black Friday week and for the next week, I'm really excited to give you this special offer. So all my courses in the Profit Method Framework Suite are on sale for 20 percent off this week only.

from November 25th toDecember 1st, 1159pm, that's when the sale ends. All the courses are on sale for 20 percent off when you use the code HOLIDAY2024BF. So that's all caps, HOLIDAY2024BF. And I'm going to leave the code in the show notes as well.

So if you miss it, if you're driving or something, you can't write it down. You can refer to it and get it. These are great savings. I do not put my courses or anything on sale very often. make sure that if you've been thinking about grabbing a course, make sure that this is the week that you do it because prices will go back up to normal December 2nd.

And I can honestly say I probably won't be putting it on sale again until next year for Black Friday. And speaking of Black Friday, that means we're kicking off the holiday season. And what that means to us at the Houston household is we are going to put up a Christmas tree this year. we got our puppy Georgie about two years ago.

Well, it's been two and a half years ago now. And she's a Black Lab and she is full of energy. she gets into everything and we're like, oh, for the last two years, we're like, no, we're not putting up a tree. It's just gonna be a disaster. She's just gonna get into it. She still chews a lot, not as much as she used to, but I will catch her occasionally grabbing something to chew.

She really likes plastic. She likes to chew on plastic. I don't like that because I don't want her ingesting plastic. So I try to keep as much away from her as I possibly can. this year we shall see how it goes. I mean, I've really missed having a Christmas tree up in the house. hopefully she won't be too bad.

I mean, little bit of training, keep telling her no. She should listen okay, but you never know with that girl. She's an absolute delight, love her dearly. She's been so great, but she's a bit of a handful sometimes. Okay, so if you have any holiday plans and you want to share them, you can share them with me through DM or message me.

I'm very accessible to you, so be sure that you stay in touch. Okay, let's get into it now. why is business ownership A financial asset when you own your business, you're not just creating cash flow from your day to day operations, you're building your asset that can appreciate over time. So I want you to think of your business like you would think about real estate.

So think about your home. As you invest in your home, you nurture it and you improve it, right? So, you do your repair and maintenance and then if you want to upgrade and make changes and stuff, most of us think about when we upgrade our home, what's going to add value if we're going to plan on reselling it, right?

just like real estate, your business is like that as well.

Your business can be sold, Passed down or even used to secure financing. So it's not just about earning money today. It's about wealth building for tomorrow. let's talk about the upgrades or the way that you can improve the value of your business. And believe me. If you use these tips, you will get a stronger resale value for your business and you don't want to implement these tips just as you're, deciding that you want to sell and you're like, Oh, wait a minute.

I should go back and use those tips. No, you should start using them now so that your business will appreciate over time. Tip number one, build strong financials. The first way to improve the value of your business. is to get your financials in order. This means more than just knowing your revenue and expenses.

It's about creating clean, well documented financial statements that show the financial health of your business. A potential buyer or investor wants to see detailed, accurate records so they can understand the profitability And stability of your company.

So one key element is managing your margins, which means you want to make sure that you have built a profitable business, everything that we talk about. And she means profit is about improving the profit in your business. And there's nothing in business that doesn't impact your profit line. That's why we talk about pretty much everything in business.

So you want to make sure that you are not only building a profitable business, But it's proven in your financial statements. without increasing expenses, the value of your business increases exponentially. So focus on ways to streamline your operations, reduce unnecessary costs, and save money.

and maximize your profit margins.

So this goes back to the three profit drivers in your business, and that is pricing, your expense management and your sales volume. These three profit drivers when they're managed correctly, and they're optimized, they're going to increase the profit in your business. So if you haven't checked out the, master class on

 profit drivers, make sure that you do because this is like the best education you can get for your business finances is understanding your three profit margins. Tip number two is to create scalable systems. Now scalable, what that means is that they're going to expand and grow with your business as your business grows.

So develop systems and processes that allow your business to scale without you being directly involved in every single task. Automation is so good for this. If you haven't automated your business, you absolutely must do that. If your business can only operate when you're present, it becomes less attractive to potential buyers or investors.

So a valuable business is one that can run smoothly with the right systems in place. Even if you step away for a while. most of us are automated in the sense that we have lead magnets where we generate leads. they're kept into a CRM managing our email systems set up our systems.

give you an example of She Means Profit where, you know, we offer courses and people can sign up for those courses at any given moment and it's all automated and the product gets to them immediately. So we have automated systems so that if we're not around to take orders, customers can still sign up, receive their offer and take orders.

Start moving along, right? So focus on automating repetitive tasks, delegating responsibilities, and creating detailed standard operating procedures for each aspect of your business. The more your business can run on autopilot, the more attractive it becomes to potential who want a turnkey operation.

This is really important. it's a lot of work to set these up. So as your business grows, you make sure that that you are creating detailed SOPs, which are standard operating procedures. Surprisingly enough, having those in place are extremely valuable to buyers. Tip number three is diversify your revenue streams.

Another important factor in improving your business's value is having multiple streams of revenue. I often talk about this. You don't want to just depend on one stream. Diversification decreases the risk that you are going to go bankrupt, right? I mean, all the risk lies in the fact that you're building a viable business.

A viable business will not go bankrupt. So ensuring that you have different streams of revenue will help you protect your income. So what that means is

If all your income comes from one product or one client, you're really putting your business at risk. A more diversified business is more stable. So what you want to do is you want to have multiple clients. instead of relying on one. So this is really common for like solo partners and consultants, right?

If you only have one client, then you're dependent on that client for a living and it's almost like being employed. So you want to make sure that you've got systems set up where you can take on more than one client because if that one client leaves you, then you have other clients you can turn to to help you generate income instead of relying on just one client.

And the same thing goes with products. You don't want to just sell one product because although it may be doing really well today, tomorrow market needs may have changed. there's so many things to consider when you're selling products. You're thinking of assembly lines, manufacturing deadlines, the global environment, market conditions, consumer tastes.

If something happens and people are no longer interested in buying your product, there's nothing else for them to buy and they will move on. So you want to make sure that you offer several different types of products and you have several clients and you're building a financially viable business. You don't want to put your business at risk.

And this increases attractiveness to potential buyers or investors. So consider adding new products or services that complement your existing offers. You don't want to be selling perfume and then decide you're going to sell garbage bags. A little bit of an extreme, but you know what I mean, right? You also want to explore different customer segments or geographic regions to expand your reach.

So for example, if you're focused just selling in the US, you may want to start focusing globally, right? Depending on where your offer would be popular. The more ways your business generates income, the more valuable it becomes. Now, another thing you can consider too, and I write about this often in my Forbes column, is putting passive income to play in your business.

So I'm going to leave a link to one of my most recent articles about business passive income, and you can check that out and see if you can come up with any ideas on how to create more revenue streams for your business without adding a whole lot of work. to your business. Tip number four is to build a strong brand.

Now, when you're thinking about reselling your business, having a personal brand is not really sellable. So you want to make sure that you have a brand. isn't tied to your name. So for example, when I first started my business, my first website was melissahoustoncpa. com. And as I started learning more about the type of business I wanted to build and the offers that I have, I actually created two businesses.

One she means profit, It's my business, but I could sell it. Somebody could easily take it over. And the other one is fractional CFO agency. So these two businesses, although yes, I am the founder. Yes, I am heavily involved. Yes, I'm related to the brand somewhat. I can still sell those businesses.

because my name is not attached to them. build a brand that isn't a personal brand is what I'm trying to say. A recognizable, trusted brand can add significant value to your business. When you have a brand that people already know, like, and trust, you have a major competitive advantage. Your brand is what differentiates you from your competitors.

And it can be a powerful tool in attracting both customers and investors. So invest in building a brand that reflects your values and resonates with your target audience. This can include everything from your visual identity, which is your logo, your colors, your website, the font that you use, just basically that visual feel to how you engage with customers on social media.

So the stronger your brand, the more valuable your business becomes. And then the final tip I'm going to give for you is focus on customer retention. This is one of the best ways to improve the value of your business is when you focus on customer retention. Acquiring new customers is important, but retaining existing ones is where the real value lies.

Loyal customers provide recurring revenue, and they often spend more over time. So when you build those long lasting relationships with your customers, you increase the lifetime value of each customer, which in turn boosts the overall value of your business. And happy customers are going to spread the word about you.

They're definitely a brand builder in itself. They're going to tell their friends and family and colleagues and whoever about the great experience they have with your brand. consider implementing a customer loyalty program, offering excellent customer service, and in consistently delivering on your promises, to keep your customers coming back.

So business ownership is one of the most powerful ways to build wealth over time. By viewing your business as a financial asset, not just a source of income, you can take steps to increase its value and set yourself up for long term financial success. Whether you're looking to sell your business someday, or you simply just want to maximize the potential, these five tips are going to help you increase the value of your business.

You need to grow your business into a more valuable asset. So, thanks for tuning in to today's special. Be sure to take advantage of our Black Friday sale and check out our courses today. Until next time, keep striving for success.