Posts Tagged ‘earnings move’

In less than 2 minutes you could download and read the short introduction. Get under the surface to principles and laws that effect BUSINESS VALUE not just sales. One earnings move could increase your company’s value $100,000s!

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One earnings move could mean $100,000s to your equity.  What could it be?

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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.�
The complete newsletter and business value…

On the average a business sells every 3-5 years.  At this time an Appraiser or Broker places a value on the business to sell it.  They value not analyze for critical areas to maximize business value. What are you doing before the sale to maximize business value?

Most Business Owners are asking, how could I maximize business value?  They might have recently purchased, inherited, started or split-off so want to build.  Because when all said and done it they know it boils down to Owner’s equity.

Maximizing business value is like tricking out a sports car or motorcycle to make it rip.  Most businesses are already running they need a littler boost in the right place.  There are a lot of possibilities.  So discovering a high performance equity booster begins the fun.

Remember an earnings move has a three times more return than a typical sales or productivity strategy. What is your next earnings move?  Ask for a complimentary review.