Posts Tagged ‘business value’

Did you know if you earn one dollar from sales you have made around three in business value. Often times we lose sight of business value. You already have heard of financial ratios, Google rankings and advertising frequency and reach. Have you used business value metrics? These types of metrics really get to the back pocket.

Considering that a “good” business sells on the average about every three to five years it makes sense to follow business value. If you haven’t used business value metrics think again. Financial ratios get to basic areas but often overlook marketing or employee activities that could be key to the success or failure of maximizing business value.

Business value metrics begin to identify value pillars and drivers of a concern. Often times value pillars are more valuable than equipment or machinery. Once they are discovered and discussed we apply principles and laws with an earnings move. Read more about an earnings move along with principles and laws of business value in “14 Immutable Laws of Business value”.

Usually value pillars and drivers are at the core of the Business. However, typical Consultants look over these drives and use a productivity, technology or sales recommendation that does not effect business value. What are your concern’s value pillars and drivers?

Is 2012 going to be profitable for your business? You could be getting the order or close but are they making you money? After a complimentary review we begin the process of applying over 14 principles and laws of business value. Don’t try to do this on your own. Ask for a complimentary business value review.

Do you want to get ahead of 99% of marketers that are dedicated to do whatever it takes to get a top ranking?  Di you know that if you earn one dollar from sales then business value goes up three dollars-if you know what you are doing. It is a fact that leveraging equity gets you ahead faster than a top ranking.

Most programmers, website gurus and internet wiz kids fall into a common trap;  focusing totally on getting sales and ranking. They end up with putting a lot of time and energy into a great idea and then little if nothing left in three to six months but some code.  If they would only start with the end in mind.  Savvy business buyers learn to use equity early-on for building wealth.

Following the principles and  rules of business value keeps you away from this common trap.   Most online programs and courses out there teach sales and marketing.  Maybe you will make some money from one of the online coaching or webinars programs.  But in the long run, applying real rules of business value you will not be where you started but have a business.

Take your first step for online success by building a business not just a website.  You’ll find in the introduction of “14 Unalterable Laws of Business Value” ways to stay away from the trap. <a href= “http://www.growthconcepts.org/index.php/2011/08/ideal-business-model/”>Click for a guide for newbies and seasoned webexperts to focus on what is real-equity.</a>

To give you a better sense of what is better, a sales strategy or an earnings move, let’s go over rule 13 in “14 Unalterable Laws of Business Value”.

Law of Future Business Value

Future business value is determined by hope while capturing current market share.

Business Brokers and Appraisers do not use market potential to value a business. Yet we hear a lot about the American Dream-potential. The Dream is the hope of making business value. These two opposing areas form a dream-line; from what it could be worth in the future to what my company is worth now. Business Owner’s wants and needs along with efficiency and innovation come to play before and after this dream-line. There is a lot of confusion with this area especially projecting business value along with potential customer’s needs and wants.

Market research and projections won’t cover all the possibilities. However, removing obvious blunders, pitfalls, and snares giving to experience a new realm that may lead to innovation is a start. The challenge of finding and projecting real value is finding balance between the discipline of efficiency and the craft of innovation and effectiveness. It’s a reminder that dogmatic dedication to efficiency alone, or innovation alone, is a recipe for disaster.  So, without a starting point of  business value and future business value there would be no solid hope since there are too many potential factors for the human mind to consider between needs and wants.

Below is a way of realizing how important business value is to your business vision. This brings you past the dream-line into needs.

Vision Questions:

1. If you had all money and time you needed what would you want to be doing in 5 years?

2. The ideal business is making sufficient cash flow with an absentee owner to get you to where you want to be in question 1.  Is this where you are at now or do you have plans for getting there?

To get there we have to understand your business.  Lets take an example business in dry cleaning business.

3. Let’s say, if we invested $10,000 in the business and increased monthly sales 20% that gave an additional $5,000 in bottom line income?

As you know, income is split into living and retirement commitments.  Would that additional income get you where you want to be in 5 years?  Probably not, so, it takes more than just increasing sales?

We have not included converting business value to cash for leveraging helping you realize your dream.  For example: There is income and then actual earning of the business.  Sometimes called discretionary cash.  In the example your investment was 10k which brought $5,000 to income but $3,000 to discretionary cash.  So when an owner goes to sell his or her business they have earned about $9,000 as equity-to leverage.

Business brokers know a business on the average sells every 3-5 years. Are you prepared for this transaction?

Know the difference between sales strategy and business value move!

One of my first Professors (I am not going to mention his name out of respect) is still trying to show how an organization’s culture brings value to a business. While at the University we were all convinced that it did.  All the others gave up years ago but a few still remain. Until going out in the real world and selling it to corporate leaders did the truth come to light-its a hard sell.

25 years later from the same camp of thought came a question to me, ”How do you sell organizational development?”  He was amazed that I was evolving organizations to a particular structure from all the alternatives- again he did not understand business value.�
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