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Improve Profitability (4th)
Up one levelAction Step 4 - Expected future profitability is a very key fundamental driver of business value. If meeting your personal and business objectives requires more time, a “GAP-MAP” analysis gives you an excellent yard stick to know by how much the future value of your company must increase. With these types of quantitative and qualititative assessements, you can confidently plan many ways to "Bridge the Value GAP".
Do a comprehensive review of the many special factors that have the largest value impact for your type business. These “value drivers” are what experienced buyers look for in a closely-held business.
For those owners seeking to sell or transfer a business to insiders, these same fundamental value drivers are equally important.
Some of the many value drivers include:
An Experienced Management Team
Proven Operating Systems
An Established Customer Base
Modern Facilities
A Documented and Realistic Growth Strategy
Effective Financial Controls
A History of Stable or Increasing Cash Flow
- Improve Profitability — last modified 2006-03-01 14:49
- Expected future profitability is a very key fundamental driver of business value.
- The Imperative for Growth — last modified 2006-02-10 12:33
- Let's talk further about your personal needs and objectives. If you feel you may need more time, there are many moves you can make today to improve profitability and establish future growth potential.
- Value Based Management — last modified 2006-02-16 15:23
- Value through Strategy — last modified 2006-02-09 15:04
- Appropriate strategies are at the cornerstone of shareholder value since creating value is a function of doing things better than the competition. If you can’t out-strategize the competition, then investors will show a preference towards your competitors. Therefore, creating value is very much a function of great strategic execution, done in such a way that you somehow “re-invent” the rules of the game.
- Value through Ethical Behavior — last modified 2006-02-09 15:20
- There is a growing body of knowledge to indicate that organizations that act in a socially responsible manner, following high ethical standards will in the long-run outlast and outperform companies that pursue profits at all costs. This connection between value and ethics has been around for a long-time, but several studies have confirmed it:
- Value through Leadership — last modified 2006-02-09 15:20
- People invariably drive performance and given the right leadership, people will perform at very high levels. Understanding the dynamics and attributes behind leadership is critically important to overall performance for any organization. One of the best ways to understand leadership is to connect it to value-creation.
- Value through Marketing — last modified 2006-02-09 15:21
- For any organization that must compete for customers, there is a real need to have a viable and strong marketing effort. Unfortunately, marketing may not get the attention it deserves by senior level management.
- Value through Information — last modified 2006-02-09 15:21
- When you attempt to create value, you have to make a choice between alternatives and this requires reliance on information. Understanding how to create “quality” information is paramount to decision making. One way to improve the quality of information is to make sure there is a strong flow of external sources – looking at market trends, surveying the customers, pursuing new technologies, and of course, competitive intelligence. These external sources provide the “reality checks” we need to remove internal bias, common to so many organizations.
- Building a Balanced Scorecard — last modified 2006-02-14 11:16
- A set of templates to assist anyone who is involved in developing a balanced scorecard.
- Analyzing the financial performance of a company — last modified 2006-02-14 11:18
- Spreadsheet model for analyzing the financial performance of a company using ratios, horizontal analysis, vertical analysis, and benchmarking.
- Capital Budgeting Analysis — last modified 2006-02-14 11:20
- Workbook examples on how to use present value concepts in analyzing capital investment decisions.
- SWOT Assessment Using the Malcolm Baldrige Model — last modified 2006-05-02 14:52
- The Malcolm Baldrige Quality Improvement Program provides guidelines for improving quality within an organization. Ninety one criteria are evaluated and scored for assessing overall quality performance within the organization. Prepared by: Matt H. Evans, CPA, CMA, CFM