The product you create is the result of your processes. So it can be said that where you really make your money is in the process. That’s where you do things differently than your competitors, and that’s where you can find extra value to provide to your customers.
The process is ultimately what you’re creating — a system or machine that can create the product for which you get paid. Viewing it this way will help you to do two things:
1) increase the value your business provides you
2) increase the appeal your business has to those who might want to buy your business
Make your business more autonomous
When it comes to your customers, you’re selling a product (unless you’re in services). But when it comes to selling your business, you’re selling the process. Focusing on the process will help your business become less reliant on you. This is good for you because it relieves you of some responsibility and gives you more freedom. This is good for investors because they can see that their profits will still be there, after you’re gone. The whole business isn’t going to fall apart without you.
Think about that. If the business is running smoothly without you, what could you be doing with your time? Two things come to mind: you could be somewhere else, doing whatever pleases you, or you could be working on ways to improve the business even further.
So you don’t want your operation it to be some complicated process that only you can manage. You want it to be a simplified, plug-and-play version. You want all of your processes boiled down to simple steps that the next person can follow with confidence.
Where to start?
The first thing is to name and define all of your processes. Writing manuals for each of them is a straightforward and thorough way to do this. Further, it guarantees that, no matter who takes time off or leaves the company, somebody will be able to step up and fill their shoes. The point is to guarantee that the process is done on time and done right. Eliminate any confusion about who is responsible for what, and what is an acceptable way to do it.
With all your processes laid out, its easy to identify where there is the most room for improvement. Is something important getting de-prioritized, or slipping through the cracks? Is the same step being done differently every time, and with different results? Is one process frequently waiting on another? Maybe some of your processes can be automated — ordering, fulfillment, requesting estimates, troubleshooting.
Automating these processes can make your company more reliable. This can provide a greater value to both you and your customers, and it doesn’t have to put any of your valued employees out of work. Their roles just need to be re-defined.
Subscription based selling is a way to do this that can be implemented in various creative ways. Some owners might worry that customers will push back on being locked into contracts, but the key is to make sure that your SBS strategy provides more value to them than traditional fulfillment. In the book The Automatic Customer, author John Warrillow argues that every form of business can implement a SBS strategy to improve their business.
You ought to be able to lay your entire process out start to finish. Instead of focusing on the quality of each product, address the quality of all products by understanding where the value is created. This understanding will help you to speak to investors in their own language when it comes time to sell. They love an autonomous business with a predictable revenue stream. And typically, if an investor likes it, you should, too.
To explore the value building process more in depth, you can read articles from this series, which cover topics like valuation, market analysis, and Key Performance Indicators.
For legal and business consultation in the Bozeman, Seattle, Pittsburgh, and Palm Springs areas, you can contact Free Vector Advisor here. We offer flexible, back loaded arrangements to help grow and sell businesses of any size.