Are You Inadvertently Damaging the Value of Your Business?

4 November 2024

You’ve built your business up so it’s successful and giving you a healthy return on investment. The value and equity that’s locked up in your business is your nest egg. It’s the asset that will power your future retirement, buy your family that new home, or the unrealised capital that will allow you to invest, begin new enterprises, or fund your lifestyle. But if the value in your business drops, this can undermine future plans and potentially leave you without the capital to take these next steps. You’re thinking about the next steps, whether it’s retirement or moving into a new business venture, but are you inadvertently damaging the value of your business? Here are five potential threats that could be damaging the value of your business.

 
1.       Relying on the founder limits growth

A modern business should be systemised and scalable. If you, as the founder, are still integral to your everyday operations, this blocks innovation and limits the potential growth of the business. Consider what you can delegate to others and switch your focus to growing the business – work ON the business rather than IN the business.

 

2.       Using outdated or inefficient equipment or technology

If you’re using outdated or inefficient equipment, technology or software, you’re holding your business back by reducing operational efficiency and increasing running costs, which makes your business less competitive in the marketplace. If you haven’t done a review of your systems, equipment and technology, now would be a good time.

 

3.       Failing to keep pace with the market

Keep up with what’s going on in your industry as things can change quickly. New competitors, new products, and changing customer behaviour can leave you lagging behind. It might be time to survey your customers to find out what they like and dislike, and where improvements can be made.


4.       Bad reputation or brand awareness

A bad reputation can damage your brand which in turn affects sales. Have you checked lately how satisfied your customers are? Have any of your employees exhibited bad behaviour or questionable sales tactics. It’s easier to keep a good reputation rather than trying to fix a bad one.


5.       Poor financial health

If you are considering selling the business, potential buyers will want to see that the business is in good financial health. A high debt-to-equity ratio can make a business more vulnerable to economic downturns, and poor cash flow will hinder your ability to invest in growth, pay bills, and meet your financial obligations. These are all red flags for investors and potential buyers.


Next steps

For the business to maintain value, it needs to keep up with a changing market, adopt new technologies, and make solid plans for growth. If you’re considering selling up for retirement or moving onto your next business, give us a call and we can help you with the next steps, including stabilising the value of your company.

17 April 2025
It's that time again and Moving Day is upon. Moving Day' is a big day in the farming industry. To help you with a smooth transition here are some tips: Early preparation Make sure sharemilker or contract milker contracts are signed. Plan a farm inspection with relevant parties (farm owner, incoming and outgoing sharemilkers, farm manager, advisor). Recruit and finalise employment agreements for new farm staff. Communicate plans and dates with everyone involved. Contact your insurer and utility providers. Farm owner responsibilities Make sure employees leave the houses clean and tidy. Carry out house inspections for maintenance. Comply with healthy home standards. Confirm departure and arrival times with tenants. Consider drug testing, if needed. Animal movements and biosecurity Plan animal movements carefully. Clean and disinfect farm equipment and machinery. Minimise the risk of introducing exotic pests. About 5,000 farmers do this every year. Talking clearly and planning well makes this important farming tradition go smoothly.
11 April 2025
Selling your business is a huge milestone—one that marks the culmination of years of hard work, dedication, and vision. But once the deal is done and the dust settles, you may find yourself wondering, “What’s next?” Exiting your business opens up a world of possibilities. Here are five potential pathways to consider as you embark on this new chapter of your life. 1. Enjoy Retirement For many, selling a business is the gateway to retirement. After years of being immersed in the day-to-day demands of running a company, retirement offers the opportunity to slow down and enjoy life at your own pace. Whether it’s traveling, spending time with family, or taking up new hobbies, retirement allows you to focus on the things that bring you joy. Planning ahead—both financially and emotionally—will ensure you make the most of this well-earned time. 2. Invest in Other Businesses Selling your business doesn’t mean stepping away from the business world entirely. Many people choose to invest in other businesses, whether it’s through buying equity, becoming a silent partner, or supporting start-ups. Your years of experience give you a unique perspective, and investing allows you to stay connected to the business community while diversifying your income streams. 3. Start a New Venture Once an entrepreneur, always an entrepreneur! If you have a new idea or are passionate about exploring a different industry, selling your business can provide the resources and freedom to start fresh. Whether it’s launching a tech start-up, opening a café, or pursuing an entirely new market, starting a new venture keeps your entrepreneurial spirit alive. 4. Become a Non-Executive Director Another pathway is to leverage your expertise and become a non-executive director. Many businesses value the insight and guidance of experienced business people. As a non-executive director, you can provide strategic advice, mentor leadership teams, and help shape the future of other companies—all without the full-time commitment of running a business. 5. Pursue Philanthropy For some, selling a business is an opportunity to give back. You might choose to support causes you care about through charitable donations, creating a foundation, or volunteering your time. Philanthropy not only helps make a difference in your community or the wider world but can also provide a deep sense of fulfilment and purpose in your post-business life. Charting Your New Path Exiting your business is both an ending and a beginning. It’s a chance to reflect on everything you’ve achieved and to embrace new opportunities that align with your goals and passions. Whether you’re ready to relax and retire, dive into new ventures, or make a positive impact through philanthropy, the choice is yours. Whatever path you choose, careful planning will help ensure your next chapter is as rewarding and successful as the one you’ve just completed. If you’d like support in exploring your options or preparing for life after your business, don’t hesitate to reach out us for guidance.
7 April 2025
Cybercriminals are constantly finding new ways to trick businesses, and their scams are harder than ever to spot. Small businesses are especially at risk, often seen as easy targets due to limited resources or weaker security. But with the right precautions, you can protect your business and prove the scammers wrong. Be Aware of New Threats Staying informed is your best defence. Here are some of the latest cyber threats: AI-Powered Scams : Scammers now use artificial intelligence to create convincing phishing emails and fake websites that are difficult to distinguish from the real thing. Impersonation Attacks : Posing as banks, government agencies, or suppliers, attackers aim to trick you into sharing sensitive information. Deepfake Technology : Fake audio and video messages that mimic trusted sources are becoming more sophisticated and harder to detect. Train Your Team Educating your team is crucial. Teach them to: Spot warning signs, like urgent requests to act quickly. Double-check email addresses and URLs before clicking on links. Be cautious with unusual requests, even if they seem legitimate. Regular training sessions and phishing simulations can help your staff stay alert and recognise scams before they cause harm. Protect Your Business Basic but effective security measures can go a long way. For example: Enable two-factor authentication to secure your accounts. Keep your software and systems up to date. Use resources like the Business Online Security Series for practical cybersecurity tips. It's also wise to consult with your IT provider to evaluate your business’s vulnerabilities and develop a cybersecurity training plan for your team. Taking action now can save your business from potential threats while safeguarding your reputation. Stay informed, train your team, and strengthen your defences!
SHOW MORE

To discuss all your account matters please call us on 09 438 1001