How To Build A Business That’s Worth Your Efforts

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How To Build A Business Thats Worth Your Efforts
Most entrepreneurs create a company for one
reason to provide themselves with an income.
However, you should consider an important, second
reason to create an asset that is a business. 
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How To Build A Business Thats Worth Your Efforts
Lets consider the question of how to sell your
business. But, before you can sell it, you have
to build a business worth selling. This article
is about establishing value.
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How To Build A Business Thats Worth Your Efforts
If you will, think about the difference between
renting and owning a house. If you rent a house,
you use it for a fee and when you no longer need
the house, you just move. The renter receives
nothing when you vacate the property. If you buy
a house, you may still pay a monthly fee in the
form of a mortgage. When you move on, you sell
the house, and you will receive a bonus payment
at the end of its use.
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How To Build A Business Thats Worth Your Efforts
Businesses are the same. Most entrepreneurs build
a business that creates an income for them, but
cannot be sold when they no longer want to
operate it. Then again, you can build a business
that creates both an income and an asset.
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How To Build A Business Thats Worth Your Efforts
Why dont more entrepreneurs build assets?  I
honestly believe that they dont think about it
because it  is only considered a matter for the
distant future. Their immediate concern is the
here and now. This is one secret to Silicon
Valley start-ups from day one, the objective is
to create a company that has value, not just one
that provides livings for the workers.
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How To Build A Business Thats Worth Your Efforts
What creates value for a company? Consider for a
moment, why a buyer would want to acquire a
company? Theres more to it than just sales and
profit.  Lets look at some of the major issues.
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How To Build A Business Thats Worth Your Efforts
1. Your business must be able to run without
you. The owners or founders presence are not
required. Buyers dont acquire one- or two-person
companies because then they are just hiring
employees. The business must have a life of its
own. Now, this means that you must have a team
that is incentivized to stay with the company for
the long haul.
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How To Build A Business Thats Worth Your Efforts
2. Your business must have a diversified customer
base. As a rule of thumb, the top 10 customers
should account for less than 50 of sales and no
one customer should make up more than 10 to 15
of revenue. When it comes to buy-outs, lifetime
customers are best repeat customers are good
and one time customers are the least desirable.
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How To Build A Business Thats Worth Your Efforts
3. The product or service must be able to be
delivered consistently and the identically to all
customers. Businesses need to show good feedback
from their customers or demonstrate that they
dominant a market. Its usually best if small
businesses specialize. Its difficult to sell a
general company or an anything-for-a-buck
business.
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How To Build A Business Thats Worth Your Efforts
4. No one wants to acquire a company with
declining revenue.  Company growth should show a
steady 5 to 10 growth, and even better, rapid
growth. The buyer wants to know how big your
business can be. It also requires a repeatable
and predictable sales process.
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How To Build A Business Thats Worth Your Efforts
How do you focus on creating value? Here is a
simple basic tip. First, focus your attention on
the value propositions. Most people think of
projects in terms of milestones and deadlines. A
business is a project. In Silicon Valley, the
completion of every milestone creates additional
value to the company.  This is important because
it is possible to meet an internal milestone, but
not to add value. An easy technique to implement
is to have a to-do list.
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How To Build A Business Thats Worth Your Efforts
The solution is to prioritize your to-do list
according to goals to look at the tasks on your
to-do list and determine how the output of
those tasks is to be used. Often, tasks are done
out of tradition or in a business-as-usual
manner and the results arent used by someone
else. Other times, entrepreneurs get too involved
in the nitty-gritty, tangible work and lose sight
of the bigger picture.
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How To Build A Business Thats Worth Your Efforts
When you create a company, your business has two
end-products the first is the product or service
you offer to customers, and the second is the
company itself. There is a market for the
business you are building and there are buyers
for it somewhere. So when you start your business
always keep in mind how to sell it. Another
secret of Silicon Valley start-ups is that it
takes just as much effort to create a company
that has no value as it does to build one of
value. So, make sure that you get the most from
your efforts.
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