Understanding the overall value of your business in preparation for sale or other exit strategy seems like a straightforward process. Many believe a business is worth an industry-specific multiple of earnings, with adjustments for assets and liabilities.

Well, not quite. These measurements, while convenient for thumbnail valuations, fail to take into account the most important driver of value: future earnings and growth. It’s a lesson that Martin O’Neill, principal, Corsum Consulting, and author of Building Business Value: How to Command a Premium Price for Your Midsized Company says many owners only learn when it’s too late.

“What I’ve found is that owners of companies in the middle market don’t fully understand what drives value, so when it comes time for a liquidity event, they say, ‘If I had known better, I would have worked on what grows value.’” With that in mind, here’s how to develop a growth plan designed to increase the value of your company.

Establish your timeframe. The fact is that you needn’t have a sale in mind to implement a growth strategy, but you do need to set a reasonable time horizon for implementation. O’Neill suggests looking ahead three or four years. “You need a certain amount of time to see your efforts produce results, but you want to know when you’ll see a return on your investment,” he explains.

Know where you stand. One of the biggest challenges that O’Neill sees among his clients is drawing a clear-eyed picture of where the company fits in the marketplace - its strengths and weaknesses.

“This is where a third party can really offer some perspective,” he suggests. “Insiders have a hard time being objective.” O’Neill has his clients rank themselves on both internal value drivers—financial performance, product development, and leadership management—and external drivers, including market share, customer base, and pricing. “Internal drivers are important as they tend to tilt the value meter a little bit, but generally what pushes value a lot are the external drivers,” he offers.

This self-evaluation should result in a pool of 10 to 20 “transformational initiatives” with the potential to improve value along one or more dimensions. As part of this initial benchmarking, you should also have a professional business valuation performed to serve as a baseline.

Understand your unique value drivers. The next step in the process is whittling down those 10 or 20 candidates into three or so key initiatives that will create the most value within your timeframe. The best initiatives will offer maximum positive impact with minimum risk. But how to know where to find the biggest bang for your buck? O’Neill suggests focusing on those value drivers that are unique to your company, which offer a competitive advantage that can command a premium valuation. For instance, a producer of generic medications might seek to increase its speed to market and strengthen its relationships with retail customers. At the other end of the spectrum, a startup software company may want to capitalize on its intellectual property with a freemium strategy to promote early adoption.

Create the roadmap. Once you’ve selected your company’s key growth initiatives, you must establish a clear vision of the future and the steps necessary to get there. Vision is a critical communication tool that keeps everyone aligned with the company’s strategic goals. How will new products or services affect customers? What position will you hold in the marketplace? Who will be your competitors? At the same time, you should task your team with creating interim goals and metrics to evaluate progress—including business valuation at selected intervals.

Building business value through growth is a win-win situation. On the one hand, you’re positioning your company for sustainable competitive advantage in the future. And on the other, you’re maximizing shareholder value for the long term.