Create a valuable business
How to create a company that'll be worth something in years to come
You've read all the stuff about so many companies failing in their first year, and you're determined you're going to be different. But how do you create a business that will still be worth something in five, ten or 50 years time?
�How will you judge the 'value' of your business?�
How will you judge the 'value' of your business? If your sole answer is based on money in the bank, you could be heading for a fall. Of course business survival comes down to the bottom line - but these days many more factors determine whether you're 'successful' or not.
Firstly, stay true to yourself. With integrity you can't go far wrong. Most people start a business because it's in a field they enjoy, or in which they have particular expertise. Finally, many later starters in business have simply decided they want a better retirement than a pension, and something more to offer their families than an inheritance. All of these are things worth pursuing.
The good news is that these goals are not incompatible with making money. Indeed, a responsible attitude to business is usually profitable. 'People buy from people' is one clich� you'll hear with alarming regularity, alongside learning to work 'on' your business instead of 'in' it. And the "people that other people like to buy from" are people who are likeable and have integrity.
David Chilten and Colin Tanner, directors of Premier IT Business Solutions, are rightly pleased that after 10 years, their company has a yearly turnover of �1.5 million and employs 15 people.
Their success is all the more remarkable when you consider they started out after a conversation in a pub, and on their first day, David turned up with a briefcase, all but empty apart from a ruler, because he thought it 'looked good.'
Ask them today about their recipe for business success and they'll say you shouldn't overlook that other most crucial of ingredients: reputation.
David says, "A valuable business can be defined in many ways. For Premier having a good reputation is very important and is created by employing the right people.
"A good reputation will generate the turnover. You need people to refer you by word of mouth - it's an easy way to do business - far better than cold calling."
The figures add up
David's experience is backed up by a poll of Britain's bosses undertaken by the Chartered Institute of Public Relations.
It asked respondents what they considered the most important factors in making judgements on companies. They rated the importance of financial performance as less significant than previous surveys, (down 16 points to 59%) while they scored factors relating to reputation up 14 points to 60%.
So how do you build that reputation? Public relations can play a part, but for the small business, everything you do can have an effect. Your best publicity may well be your satisfied customers.
Here are David Chilten's top tips for building a valuable business and an excellent reputation:
David saves the best for last: "Always remember, if it was easy, everybody would be doing it"
Do your bit
Another phrase you'll hear a lot of is 'Corporate Social Responsibility'. This basically means putting something back and can also be a key way of boosting your credibility.
�You have to look at the impact you can have on the community.�
Carol Garrington, director of Midlands agency Passionate Media says: "You have to look at the impact you can have on the community. We've been in the privileged position of being able to build up a lot of goodwill through the types of organisations we have worked with, either as paying customers or on a pro bono basis.
"On the rare occasions we've ventured into cold calling, we have been delighted that people say 'Oh yes, you've been recommended,' or they know us through the work we have done with a particular charity. We find that is of particular value to our business."
Sure, value is about money. But multi-million pound deals are for the 1-in-1000 companies which float on the stockmarket. For the start-up venture, or the many people who just want a comfortable living, the way to value is happy customers, and that means engendering goodwill.