Sooner or later, most small business owners start to think constructively about creating lasting value in their enterprises. It’s better to do it sooner.
Valuation
Creating salable value in a company is partly about perception (“What a willing buyer is willing to pay…”), but it’s mostly about working through the numbers to determine the anticipated return on the buyer’s investment.
Staying at the leading edge of management ideas and practices turns out to be a challenge even for those who are in the first ranks of management education. For the rest of us, it’s occasionally surprising to find out what we don’t know, even about subjects on which we profess expertise. A couple of experiences last week caused me to reflect on the teaching and learning process, reassuring me that old dog + new tricks = top dog.
Success, they say, is found at the intersection of preparation and opportunity. A small business owner whose ultimate goal is a successful cash-out is smart to develop in every part of the company strategies and tactics that will enhance the value of the business over the long term. In the final analysis, however, it is the numbers — part, present, and future — that support the story in negotiations with prospective buyers and investors. You may think you hear the Fat Lady singing, but if the numbers are off-key, so is she. No one is likely to pay your price, and the game may end with you on the losing side.
"Howe's Bayou"