A long time ago I learned a valuable lesson to about how to make a business successful. My focus as President was always on aggressively planning sales, marketing, and customer service strategies to grow a business both internally and through acquisitions. A sure sign of success was to tell everyone how large the sales are and how we grew! Right?… WRONG. The problem was while driving sales and the value of the front end of the business, we lost focus on the business as a whole. Cashflow tightened. We began working longer hours looking for answers to control costs. We
View More
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
View More
Companies run into trouble from time to time. But why do some companies survive those troubles and others don’t? To me, there are two issues. First, it’s knowing when to ask for help. Second, it’s being willing to follow the advice that you’re given. But not everyone waits till they’re in trouble to ask for help. I remember getting a call from a business owner who said he was doing pretty well, he just wanted some help because he “didn’t know what he didn’t know.” Sometimes I meet with companies that are in a different situation. They have waited so
View More
You created your budget last fall, and you were relieved that you completed the task. You don’t need to worry about it for another year. But what is the reason that you created the budget? If it was just to put a target on your company’s back for this year, then you are missing the opportunity to have another planning tool at your fingertips. Let’s look at three major areas of your budget to see how it can help you through this next year. Revenue and Gross Margin There are a lot of factors that go into your revenue numbers:
View More
We truly don’t know when the recession is coming. It might be in six weeks or six months. But historical financial records show that one is coming. So, how can you prepare your company to better handle the recession when it does come? Last month, I discussed how carefully managing your Accounts Receivable and Inventory can help prepare you for what’s coming. This month let’s take a look at some other crucial business matters. Manage your use of credit Carefully use your credit line. A credit line should never be used to cover operating losses. If you are near the
View More