If you want your company to stand out and increase its revenues, you will have to add value, but adding value can be easier said than done. Here we examine some of the different ways you can add value to your company:
The first step in understanding the value drivers of a company is finding out what your customers value. This could be pricing, product quality, customer service, customer experience, reliability, or authenticity.
Finding out what is valuable to your target audience is a great way of delivering and generating value. This can be done through tailored surveys which can be distributed via email, in person, through your website, and even on social media. You will need to ask questions that will provoke a response, both negative and positive; what would you improve? What did you consider negative about the experience? Did you find what you were looking for? What did we do well?
Categorising the responses into themed buckets which will allow you to prioritise the responses and direct your attention to those items that will quickly address your clients’ concerns.
Critically examining your products and services understanding where qualitative improvements can be made can quickly improve the value of the product or service offering. This may mean moving to better but more costly suppliers for raw materials and keeping the cost down by committing to buy a bulk quantity over some time. Service-based products could benefit from better training and peer-to-peer qualitative checks.
We should always try to maintain profitability, and where possible, you should try and pass on price increases based on the fact and timing of the improved quality you are now offering.
Increasing prices may slow the speed of the business. However, we can counter this by employing experienced, qualified and competent employees that fit the company’s culture. Operations can be executed faster with better quality.
Differentiating yourself from your competitors and personalizing the experience for your customers will attract more customers and be stickier in terms of repeat business. There are limitless areas of the company that can be personalized and unique, marketing material, the discounts offered, emails, etc.
These schemes can go a long way in developing brand awareness and repeat business. The customer could benefit from free merchandise, additional discounts, and advanced access to the latest products and innovations.
An essential part of owning a business is to have a business plan that looks out over the following 3 to 5 years. This allows the business owner to test out theories and strategies view future cash pinch points where the business can plan its way around rather than when that cash crisis has arrived as a surprise. The business plan can be developed in collaboration with the company’s management, ensuring they have buy-in to the budgets and a level of cost consciousness is designed.
Furthermore, should the organization look to raise funds, be that from a VC, bank, or any other financial institution, the business would not be considered without a robust business plan.
One of the essential methods by which a company can attract value in outsourcing some or all the back-office functions.
Accounting, for example, is a crucial part of business awareness and allows the company to maintain compliance requirements with several local legislations. Employing an individual to perform this task is likely to be far more expensive than outsourcing. Not only will the cost be cheaper, but you will have access to far higher levels of expertise and will be informed of the latest legal requirements as and when they happen.
One of the most significant profit loss areas in the UAE is non-compliance with the local laws. VAT was introduced in the UAE in 2018, and the penalties for mistakes and failure to register in time can be painful and cumulative. Certainly, start-ups that have breached the registration threshold should consider outsourcing the VAT returns – it’s a complex subject and very easy to get wrong.
The legislative landscape within the UAE is constantly changing to remove the image of being a low tax jurisdiction where many international companies unfairly take advantage of the zero tax benefit by diverting profits from tax-charging countries to the UAE. This has seen the introduction of Economic Substance Regulations (ESR) and Beneficial Ownership (UBO) laws to identify and report companies that cannot demonstrate trading activity or substance in the UAE. The penalties can be huge at AED 300k and more.
Frequently an organization may grow to the point the company needs higher-level expertise but may not be in a position to warrant the employment of a CFO, either because there isn’t the need or the budget for a full-time CFO. The virtual CFO fills that gap on a part-time basis, where the cost can be far less than that of a full-time lower-level employee. The CFO should have decades of experience and can stress test the entrepreneur’s strategies, thus giving them the comfort that the right decision has been made. Because the CFO is not an employee and not reliant upon the company for their total earnings, the CFO can be more candid, whereas other employees may not be so willing to voice their opinion
As a company grows, one of the ways of making a product or service more attractive is to offer credit terms, and very frequently, customers will also pay beyond these agreed credit terms. This can be highly damaging if the company cannot pay its debts, particularly its employees, on time. There are several solutions.
a. Seek a bank loan. This is extremely difficult in the UAE, and business loans are rarely awarded without significant collateral
b. Equity financing. Selling a portion of the company’s shares to an investor. This, in the long run, is a costly method; not only is a part of the company given away, but now you have another director whose interests may not be aligned with your
c. Accounts receivable funding, sometimes known as factoring or forfaiting allows a company to regain liquidity very quickly at a comparatively low cost enabling the business to navigate through the seasonal cash squeeze or use the released funds to accelerate the growth of the company. Indeed, one of the benefits we have directly observed is that because of invoice financing, the entrepreneur can negotiate better terms with their suppliers as they are now seen as a safe and stable business partner to do business with.
There are many ways in which a company can gain value, and if you would like to speak with the team on any of the issues you are facing, we would be glad to have a no-commitment brief conversation with you.