Warren Buffet famously stated:
“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
This applies to your business as well. Business reputation is the overall estimate in which an organization is held by its internal and external stakeholders, based on its past actions and probability of its future behaviour. Reputation is one of those intangible value builders, something that can demand a premium when you are looking to sell your business or franchise. Reputation is so important that BuyAndSellABusiness.com integrates Yelp Reviews with listings, so potential buyers can see what customers are saying. So, how can you ensure you are building a strong reputation as a business? Here are 5 ways:
1: Focus on a holistic strategy- even though companies have a corporate responsibility edge, they need to improve product and leadership scores.
2: You must be forward thinking. Your business, regardless of the industry, must work on innovation to compete globally.
3: Tell your story! A brand’s story is key to building reputation. For example, there is now a strategic advantage in being Canadian-owned - tell that story.
4: Companies need to operate ethically, and be open and transparent to be in full disclosure of their business practices. Failing to do so results in suspicion, and suspicion can erode a business’ reputation.
5: Be wary of political involvement. There was a time when business and politics didn’t mix. Today, the reality is, they mix. You’ve got to tread carefully.
With that said, business reputation is vital when it comes to the sale of it. Companies with a stronger reputation are truly living their values, especially during tough times when these values are tested, this type of reputation leads to building a sellable and valuable business. When this happens you can demand a higher selling price when it comes time to the business’ exit or succession.
First published under our former name, BizON.
