The journey to build the market value of your business begins with making a laundry list of areas that are ripe for improvement. There are various ways to identify these areas, using data and valuation models, which we’ve covered in previous posts.

Sometimes the data clearly emphasizes which areas you ought to tackle first, but its not always clear. If this is the case, consider the areas below. If they are on your radar, they’re good ones to pursue because of the appeal they hold for investors.

Integrate subscription-based selling

Inevitably, the value-building process is going to demand that you take a long hard look at your sales model. Of all the ways your sales model can be tweaked, integrating subscription based selling could have the biggest impact on how investors view your company. Why? Because investors are looking for a predictable revenue stream that doesn’t place a big demand on them. Subscription models make finance simple and predictable. They set the stage for automating fulfillment, too.

Most, if not all, businesses can find a way to integrate at least some subscription selling. This is a topic perused thoroughly in The Automatic Customer: Creating a Subscription Business in Any Industry by John Warrilow, which is a good introduction to the world of subscription selling.

Increase topline revenue

Being investors, they want to see numbers. And while its important not to overlook any other set of numbers, topline revenue deserves its own pedestal. Unless they’re after your company for strategic reasons, all buyers are really looking to invest in is a revenue stream. Even if they are after it for strategic reasons, topline revenue is going to be important. And of course, its important to you in the immediate term. So this one could very well go without saying, but we’d be remiss if we didn’t include it on the list.

Improve your sales engine to boost topline revenue. Cost-per-lead and cost-per-sale are KPIs to focus on here.

A key focus in topline revenue is customer retention. Repeat customers are the foundation for growth. By building strong relationships, you earn sales without having to sell to relatively cold leads. This will, ultimately, drive down cost-per-sale. There are many reasons companies under perform in customer retention. Mostly, it comes down to incorrect assumptions about what is actually important to the customer within the relationship. Two books that offer valuable insights into this are The Effortless Experience and The Challenger Sale, both by Matthew Dixon. Don’t be surprised if these books reinforce the importance of subscription based selling (although this isn’t really the focus of either book).

Then, of course, you can increase spending with current customers. That starts with retention and relationship building, though. If you handle that aspect, the rest should begin to fall into place.

Reduce operating expenses

The afore-mentioned cost-per-lead and cost-per-sale are key measures to focus on here. No matter how you look at it, reducing expenses always come down to reducing some form of waste. There are many philosophies/systems to reduce waste, thereby reducing time and money lost in production. Some proven systems are Lean, Six Sigma, and EOS.

Retention is also huge for reducing costs — both with customers and employees. With customers, you don’t have to invest as much into pursuing cold leads. Employee retention, meanwhile, means productivity doesn’t have to be slowed down for things like recruiting, screening, and training. These items also happen to be big expenses. Has your company quantified the cost of losing a trusted employee? Can the cost of truly valuable personnel even be quantified?

Differentiate your product & brand

Any area for improvement that will differentiate you from the field should be seen as a big, shining, green traffic signal. If you can offer something that can’t be duplicated, your position is relatively secure. Investors love this. Define what your Unique Selling Proposition is, and look for ways to strengthen it. Lack of competition amounts to a relatively secure position in the market. When it comes to investing, a low risk proposition is always worth more. Whether its product features, hassle-free ordering, automated fulfillment, or some other area, there are opportunities to offer value that nobody else is offering.

Customers often stick with one supplier or the other based on a marginal difference in price, because nobody in the industry offers a compelling enough reason to base the decision on anything else. As is covered in the aforementioned title The Challenger Sale, what appears to be strong differentiation from within the organization is all-but-insignificant to those outside the organization (aka the customer). They just don’t care much about the things companies often assume they do. And they’re not necessarily excited about making decisions based on price, either. In fact, they’re probably so bored by it that they’d prefer to just stick with the current supplier unless the price difference is significant.

Other ways to differentiate yourself are explored in those same titles. In fact, that’s a central focus of both books.

Diversify your operations and customer base

The less reliant the success of your business is on any single entity, the less risk there will be in it for potential buyers. If a large part of the business is propped up on one employee or customer, its not very secure. The numbers, the sales model, the unique selling strengths, the streamlined operation could all be there, but if its all focused on one key player, there’s going to be too much risk — or too much work involved in diversifying. Investors don’t want to have to re-tool your business. They just want to take it and run with it.

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Note that just because we haven’t mentioned it here, doesn’t mean its not a good area to pursue improvements in. The purpose of this list is to reassure that you these areas are going to be very conducive to your eventual exit strategy — especially if your data indicates that there’s room for improvement.

Identifying your best move can be tricky, because you’re close to your business. Valuating your business and improving the market value of it require you to detach from the way you usually operate. This is as important as it is hard. Not only do business owners often struggle to see things objectively, they also fail to recognize that they aren’t seeing things objectively. This is part of the value of bringing outside perspective into the value-building process.

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