In the face of uncertainty, the key to maintaining sanity and effectiveness as well as securing a meaningful return on your time and attention is to anchor on something within your control; that is measurable, and communicable. But what should this anchor be?
As a business owner and leader, you are a servant to your business. Serving it means catering to what it needs to thrive. Consider this: when you go for a medical check-up, after a few prods, plugs, needles, and readings, a physician qualifies you as healthy. A health check-up assesses overall health, identifies potential issues early, and allows for discussion of health concerns with a doctor.
This comprehensive assessment includes a review of personal and family medical history, lifestyle, and symptoms to identify risk factors; a physical examination checking vital signs and various body parts; blood tests to measure important biomarkers; recommended screening tests based on age, sex, and risk factors; and imaging tests if needed. The check-up concludes with lifestyle and wellness counselling on diet, exercise, and other health factors.
To conduct a health check on your business, you need an ideal “state of health” measure – something simple, accessible, and clean that considers the holistic well-being of the business. For instance, having a good heart rate but a poor liver does not equate to good health.
Company valuation is a comprehensive health check for your business. It considers the business and its context and is driven by five primary levers:
Positioning
What makes your business stand out in a competitive, noisy industry?
System of delivery
How do you find new customers, engage them, onboard them, fulfil your promises, and retain them using business systems, processes, and activities?
Purposeful team
How do you get the right people to do the right thing at the right time?
Growth
How do you grow revenue, profit, and profitability?
Value
How do you navigate your business and direct your team toward a clearly defined destination using your positioning as a blueprint to design and institute your system of delivery to guide and empower your team’s performance that generates growth?
These levers span your entire business and industry. They are all equally measurable, making your company valuation the most comprehensive yet straightforward health indicator.
How you communicate this idea to your team is crucial. Revenues are driven by the quantity and value of products and services you sell and deliver. Connecting the quantity of products or services to your company valuation offers a more accessible and inclusive understanding of your company’s health check. Instead of using a £50 million company valuation as a destination, use the language of the business that everyone understands – make 500 cars, deliver 150 projects, or sell 3,000 subscriptions in the year of measure.
This inclusive language gets everyone on board and helps them understand where you are heading. Next, confirm why it matters. If your business purpose is well-defined and your business’s impact on the lives of customers, suppliers, the environment, and society is clear, doing more becomes almost a responsibility.
Finally, relate it to “what’s in it for me” for your team. A growing business secures work, employment, and advancement for those willing to earn it. Everybody wins.
Be bold. Be brave. Pick a sizeable number. Set a timeline. Lead.
