While a business owner is frequently concerned about its current operation, the cash in the bank, customer numbers and Google Reviews, they are also concerned about its future net worth and value of their business.
There are several responsibilities that a business owner holds. But most businesses encounter a downfall when business owners try to do all things by themselves, including working in areas they don’t have enough expertise. This can waste months or years of time when the business could be growing fast and more profitably.
This is when a business mentor from Profit Transformations can be a great help. Effective business mentoring can bring tons of benefits to your business, but the best part is that they help to increase the net worth and value of your business.
How Does a Mentor Help in Boosting Your Business’ Net Worth and Value?
Increase the Operating Profit Margin
Operating profit margins directly influence the value and net worth of a business. There are several strategies a mentor can introduce or optimize that lead to that outcome.
An experienced business mentor will help you to improve inventory management practices. Also, you will have better control over your inventory data. This will help you understand what is selling or not moving, and what stock you have in hand.
A business mentor will educate you with these insights so that you can make effective decisions about marketing, purchasing, and sales strategies.
Effective mentoring will enable you to reduce wasteful spending and guide you to use less expensive supplies or suppliers. An experienced mentor will help you identify wasteful areas in your business and also suggest ways to eliminate them.
You need to eliminate poor-selling products and overproduction of items to save money. It increases the net worth and adds value to your business.
An experienced mentor will help you to position your most profitable products and position them in the high-traffic area of your store.
They will also help you consider taxes, shipping expenses, and other factors before finalizing orders.
Having a mentor by your side will aid you to raise your prices to make more money on every sale. This will widen your margins and ultimately improve your bottom line.
Your mentor will also help you identify inefficiencies in your supply chain and reduce them. Effective business mentoring can motivate your staff to do more, and improves employee happiness. And as everyone knows, happy people are more productive than unhappy people, and when employees are happy, you retain them longer.
A business mentor can introduce effective team meetings to discuss errors in the business and look for areas that require special attention.
A business mentor will educate you on these factors and suggest better ways to leverage the full potential or skill of your team, to identify when your business needs to hire new employees, what job role they need to be in, and help with the KPI’s for the role.
Reduce Dependency of the Business on the Director
The director does a lot for a company, and they need to focus on vital matters. But a mentor makes sure that your business is not entirely dependent on you as the director. They will keep the smooth flow of the business intact and help it to have less dependency on you, and this increases the business’ net worth.
Business mentoring helps you to build efficient management with key players. Only hiring employees is not enough; you need to empower them to make critical decisions on your behalf.
A good business mentor will guide you through documenting key information. You and your team may have a crystal-clear view of your business running processes and that needs to be documented or ‘digitized’ to explain processes, policies and procedures so that they can be grasped by prospective buyers.
An experienced business mentor makes sure that your employees take up their full responsibility, and for that, they suggest the adoption of comprehensive systems.
Successful mentoring will contribute to storing and analyzing information and assisting in streamlining the business while making important decisions.
Business leadership is all about the capability of the management to set and achieve challenging business objectives or goals. A business mentor helps you to take decisive and fast actions whenever needed to streamline operations and build harmony in the workplace between employees and departments.
They also help you with the formulation of effective strategies to outperform competitors and inspire employees to perform at their best level.
Improvements introduced by business mentoring can reduce or break down the dependencies of employees on their business owner. This reduction in dependency demonstrates the business is being sold as a business, not a job, which increases the value of the business.
A good leader provides correct direction to a business and its workers. A mentor will thus help your staff how to carry out their responsibilities effectively and supervise the task completion regularly.
A good leader exhibits integrity, ethical behaviour, honesty, and trustworthiness. Business mentoringalso instils a leader’s clear communication and makes them more empathetic.
Inculcation of productive leadership in you provides positive energy and shows optimism amongst employees.
An experienced business mentor will help you improve your average order value. Increasing the average order value (AOV) from your existing customers will help you improve your business profit and increase its net worth.
You have already invested a lot to bring customers to your business, and now, you need to look for ways to maximize their spending on the first and future sales.
A mentor will help you in this matter by making you introduce more products or services to sell to the same customers. Take more orders during a purchase from customers and it will add value to your business and its relationships with customers.
A newsletter is an effective tool for communicating with your clients and alliance partners to introduce them to your line extension products/services. An experienced business mentor educates you on the ideal ways to put these newsletters to work to generate sales.
Someone who has purchased products or availed of services from your business before has already been acquainted and engaged with your brand. They will be the first ones who will be receptive to your offers and new product launches. A newsletter can keep clients interested in your business between product launches.
Encourage Google Reviews to Build the Brand
A mentor helps you to identify the right moments to ask for a buyer’s review online. To get optimal results, they make sure that you are soliciting customer reviews at the right time and from the right customers.
Reviews improve relationships internally, create greater brand awareness, and ultimately add value to your business. It is a way to increase the net worth effectively.
According to a report, more than 50 reviews mean about a 4% improvement in lead-to-sale conversion rates.
These reviews will help you understand the needs of the customers and their expectations from your business.
Increasing the value and net worth of your business can be more easily achieved with business mentoring.
As mentioned, increasing the net worth and value of a business is best achieved by increasing the business operating profit margin and also the business’ dependency on the business owner.
By implementing some or all of the above strategies, perhaps with the assistance of an experienced business mentor at Profit Transformations, you could add a whole number multiple to the value equation of your business’ net worth.