Information is power. We’ve all heard that expression, but it has a special meaning for those who run businesses. For them, information is empowering. Accurate, timely, easy-to-understand information enables leaders to make optimal decisions in how they deploy capital, where they will focus their businesses and what areas need to be improved. In 2019, however, we’ve noticed many business leaders continue to struggle to get the information they need. Nearly all have adopted some form of information reporting system, whether they call it a scorecard or dashboard, or perhaps they just include various metrics in a monthly reporting package (for
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As business valuators and advisors, we are often asked, “What can I do to make my company more valuable?” While the value of a business is dependent upon myriad factors, measures that increase cash flow, decrease risk, or increase growth prospects for a business will have a positive effect on value. But what steps can you as a business owner take to bolster the value of your company? There are several strategies that you can implement (apart from obvious changes such as raising prices, cutting costs, or just hoping a rising economic tide will lead to continued growth) that will
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For many business owners, the sale of their business is a once in a lifetime event, perhaps the culmination of years of hard work to grow the value of the business. In many cases, the business represents the owner’s principal asset to fund a comfortable retirement. Even if retirement is not the motivation, selling business owners are always focused on retaining as much of the proceeds from the sale of their business as possible. Unfortunately, business owners have to share part of their good fortune (and the results of their hard work) with Uncle Sam in the form of taxes.
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KPIs, Key Performance Indicators, are an important way for any manager or business owner to keep track of how he or she is doing. Remember one key point – If you don’t measure it, you can’t improve it. Which KPIs should you use to determine the success of your business? It would be nice and easy to tell you the six (6) most important KPIs for your business. The problem is that each business is different, and to make the decisions more difficult, each business owner has different goals. So how do you determine what KPIs are the ones that
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I was visiting with a business owner the other day, and we were talking about his Cash Flow. The chart he showed me had a slow, but steady decline in cash flow over the past two years. I asked him what he was going to do about it, and he took a long ruler, laid it on the trend line, and pointed at the point where the cash flow hit $0. He said “That’s when I leave the company.” This raises a lot of issues. The biggest one, and one I hear from an increasing number of business owners is
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