5 Tried-and-True Ways to Add Value to Your Business
Whether you're looking to sell or simply increase profits, renewed focus and management strategies can maximize your shop's stability.
WHEN SEEKING to add value to your printing or signage business, five areas should make up the foundation of your strategy. As we’ve grown Nonstop Signs and Graphics from a garage operation to a multimillion-dollar printing business, these key tenets have guided our approach and provided return. So much return, in fact, that it’s hard to ignore the impact they have on the bottom line, and even to the entire valuation of a business.
When our team networks with other industry leaders and business owners, we often find that adding value to a company is not the chief focus for most owners; those executives often become so mired in day-to-day operations that steps aimed toward improving the distant future aren’t a huge priority. However, knowing what third parties are studying when they assess your business is important even for day-to-day operations.
The reality is companies don’t just assess value for sale, as you might believe. A snapshot look at the financials, operations, and overall value of your printing business is necessary to get additional financing, such as a loan for new equipment or perhaps expansion into a new office. Over the past ten years, we’ve acquired at least ten state-of-the-art machines, an office building, multiple lines of credit, and purchased several other companies. This financial and physical expansion was made possible by the add-value strategy that we’ve implemented at Nonstop Signs and Graphics.
It’s as Easy as 1, 2, 3, 4, 5
These five ways of improving your printing or signage business come right from the playbook of our managing team at Nonstop Signs. Consider our strategies for each, and how they can be implemented in your own business so that you can maximize your opportunities to expand, upgrade, or even sell comfortably.
1. Aggressively Increase Profitability
If adding value to your company is your destination, then profitability is the all-terrain vehicle that will get you there. There’s one key part of increasing profitability that a shocking amount of founders and owners don’t realize: You must know your company’s financial health like it’s your own.
In fact, you should be so familiar with your numbers that you could recite them in your sleep. At our office, we have a deadline for all financial documents on the 15th of the following month. This allows time for adjustments, paid invoices, and the like to be retroactively included in the previous month’s budget. Then, our entire management team combs through the financials of each department and section and looks for areas of improvement. Using both hard numbers and overall percentages, we look for areas to cut costs and improve margins.Advertisement
This is by no means a get-rich-quick scheme; it could take months or years of collecting your financial data and experimenting with your cost basis to see improvement. However, knowing every dollar that flows through your company will help you increase profitability in the long run.
If you’re just not a numbers person or you’re self-conscious about your lack of knowledge in this area, don’t be. Understand that it’s just another part of business that you’ll need to learn to operate at your full capacity. If you’re not comfortable asking your accounting manager to explain processes or teach you about the numbers in your company, you can discreetly take a college course, attend training, or educate yourself through YouTube videos. Review old financial documents and play with the formulas to understand the how, why, and what.
It’s important to note that you should feel comfortable asking your accounting manager for help or explanation. In fact, this is a key part of our second step.
2. Build a Quality Management Team
At Nonstop Signs, we believe in trusting our management team. In fact, building trust and independence is a huge part of what made our expansion possible.
I have always believed that a quality management team that doesn’t require micromanaging is a huge asset. When my department heads are running their own shows, I am free to focus all of my time and attention on expanding our business.
Our company is broken down into managers over production, sales, finance, design, and marketing. Most business owners might have a heart attack over the amount of managers we have in our building, but I don’t subscribe to the idea that a manager should have to wear many hats. After all, a jack of all trades is a master of none.Advertisement
Each department head hires and manages their own team. The end goal is not to just do the job, but for managers to constantly learn and evolve until they are better than I am at sales, finance, or whatever their department is. A focus on education and growth is the secret sauce to building and keeping a quality management team. An investment in my managers’ personal and professional growth inspires the loyalty and dedication necessary to keep each department on track and the business growing. It also adds a lot of stability to the business because the organization doesn’t rely on one person to keep it going.
3. Invest in Sales and Marketing
Sales and marketing tends to be another part of the business strategy that goes overlooked. This is because owners of printing businesses don’t naturally rank this as a high priority after paying employees, keeping the doors open, and working through operational expenses. However, sales and marketing are what produces business beyond tomorrow.
You should have a sales and marketing plan that is constantly being executed and improved upon. This plan should be active and a central focus of business operations no matter what – in other words, you must make sales and marketing a priority. We don’t sit around and hope clients come to us; we consistently invest in training for our sales team to hone their skills. We also subscribe to blogs and newsletters and read articles specifically about the latest marketing tactics.
The reason behind this is that we want first-mover advantage. In other words, we want to be the first to market that way and capitalize on trends in order to wow our customers and clients with innovation. If sales and marketing aren’t your strong suit, there are many consultants or outside agencies who can help you improve your strategy. Services like this should be looked at as an investment, not an expense.
4. Pretend You’re Selling Tomorrow
It’s easy to settle into a comfortable rhythm when operating your business, and as a result, you begin to rely on the knowledge stored in your head rather than information recordedin operating guides or processes.
Having the mentality that you’re selling tomorrow will help you keep everything organized and accessible.Advertisement
This may not seem like a big deal, but consider this: If you’re the only person who has the password, contract, figures, or media that someone on your team needs, you’ll have to dig and provide it – even if you’re immersed in other work or, worse, on vacation. Creating processes to keep everything neatly organized and accessible as though a potential buyer were walking in to view it tomorrow will be a lifesaver for you and your team. At Nonstop Signs, we keep crucial information in one place; it’s always available to our team. This includes records of contracts, processes, finances, and passwords. Allowing others to rely on the systems in place and not on you personally will improve work-life balance and allow you to focus attention elsewhere in the business.
5. Talk to Competitors
Part of a long-term strategy for adding value to your company revolves around talking to the people you may be less than thrilled about rubbing elbows with: your direct competition. However, there is reason to be friendly with your competition. You never know when or why they may want to talk about selling their company – or even buying yours.
The potential for selling or expanding could be right next door. For example, our founding company, 858 Graphics, actually acquired Nonstop Signs and merged the two companies. At the time of the acquisition, we’d already been in contact for about eight years, worked together a few times, and built plenty of trust. It was an easy decision for both of us when it came time for them to sell. The result was a strong presence in San Diego and Los Angeles, which was crucial for our expansion strategy.
If you take away nothing else from this article, just commit to putting value-add strategies in your business plan for 2019. While your path may look a little different than ours, the decision to make a company more profitable in the long run is never a bad goal.
Watch the 2020 Rising Stars Awards
Congratulations to the six winners of the third annual Rising Stars Awards. Watch the recording of the live virtual awards ceremony from January 28, 2020. The recipients – all of whom are age 35 or younger – were chosen based on their professional accomplishments, fresh thinking, contributions toward industry advancement, commitment to excellence, and a strong impact on their organizations.
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