Adding value to your business can be very worthwhile. David Fort from Haines Watts explains how...
How can an SME build value in their business
An SME would look to build value in a number of different ways.
There’s the very traditional way of building value within an organisation, which is very much driven by profit and loss, balance sheet, ratios – that’s fine and that’s got its place.
What we see from our experience is that the clients of mine who’ve maximized their value within their business are the ones who really took time and effort to look at the foundations of the business, to see what actually underpins all those numbers. So it’s that, is it a really strong marketing team, is it a really strong sales team, is it a really strong production if they’re in manufacturing?
What it comes back to a lot of the time is they’ve got a really strong leadership team, and that has to come from the very top of the organisation. So the guys who’ve managed to run their business while they’re still on the beach, they’re the ones who’ve actually maximized on their value, because they’ve put together a team of key people who understand the culture of the business and have been encouraged from a very early stage to get involved and really believe in what the business is doing and where it’s going for the future. That will ultimately maximize the value for the shareholders.
That leadership team has to cover all the different aspects of that business, but they’ve got to all come together, believe the culture, and then deliver that to the ultimate shareholders, and that’s the way they’re going to maximize value.