Do you have what it takes to be an entrepreneur or part of an entrepreneur management team?

Though the term entrepreneur is sometimes used loosely today, it means much more than someone who came up with a good idea and found a way to make money. The child who plans to babysit for cash is much different than the child entrepreneur who sets up a New Year’s Eve babysitting service with a set time, cost, and clear parameters. Do you see the difference?

To be an effective and motivated part of an entrepreneurial management team you have to have the ability to wear many hats at once. Below are some examples.

Financial Team: Finances can be the issue that will tear a management team apart faster than anything. You need to have a system of checks and balances in place so that each member of the financial team (who is probably also a member of every other team) has the ability to offer input. Hint: If you cannot pay your own bills at home, then you need a qualified financial team member.

Knowledge is Power

Production: Who is going to actually make the items you are developing? How will they be compensated? If you have a three-man crew, it is likely that each of you is going to be a part of each team. The key is to play off of each other’s skills. If you cannot manage a hammer and you are trying to build unique doghouses, stay out of the production area and put your skills to use somewhere else.

Marketing: How are you getting the word out about your product? You cannot sell what people do not know about.

Keep in mind that the team must work towards the same preset goal while each is using their own skills. This does not mean that any skill is worth more than another.  The key element is to recognize your weaknesses and fill your team with stronger members who can improve your business.  Learn the keys of delegation and hold the team responsible, then reward for quality performance.

Quick Tips for More Productive Meetings

Are meetings taking up all the time in your day? Wonder how to make your meetings more productive? 

TIP OF THE WEEK

In his article Quick Tips for More Productive Meetings, Strategist, Executive Coach, and Vistage Chair,  Chad Harvey, offers his Pro Tips for Holding Meetings with Purpose.  He lists his 3 main suggestions, plus bonus meeting tips at the end.

3 Suggestions

• Share information
• achieve consensus or solicit feedback
• make a decision

Harvey gives us a quick and concise look at meetings and productivity, and how the two are intertwined. More professionals are spending excessive amounts of time in meetings, racking up hours in the week, both online and in person. A real productivity-killer if not managed well.

“What are we doing here?”

Harvey discusses the need for sharing information and clarity (creating a road map). He doesn’t mess around in talking about items that can derail a meeting either. As many will note, it’s hard to get your voice heard when there is someone sucking up all oxygen in the room.

“Avoid sucking up everyone’s time in a never-ending meeting by clearly communicating that consensus or feedback is the goal. Also, set a time limit and stick to it”.

 An enjoyable and well-thought-out read. I highly recommend it.

Did you know that your mindset plays a critical role in how you cope with day-to-day challenges? Do you embrace challenges, or shy away from them? Do you simply focus on the journey? Do you have a fixed mindset or a growth one?

Your beliefs or your mindset shape how you think, feel, and behave in any given situation. Your mindset influences your leadership. 

This week’s TIP OF THE WEEK comes from Sam Reese, CEO of Vistage. Sam discusses Mindset Matters: How to Prepare Your Company for Ongoing Change.  Leaders’ mindsets serve as a key determining factor in their ability to face disruption.

Reese provides readers with four ways that great leaders are cultivating a mindset for success in 2022 and beyond.

1. Handling the world of unknowns

2. Transformative values for leaders 

3. Embracing change

4. Employees are at the forefront of strategy

Reese guides others to be inspiring leaders who approach new challenges with fresh eyes while emphasizing the importance of staying humble and curious; while seeking out fresh perspectives at the same time. He acknowledges that “challenges can be the catalyst for major improvements and success”.

challenges can be the catalyst for major improvements and success

He goes on to remind those in leadership positions to hold onto a resilient mindset that lets their team know that they will not quit. Employees are at the forefront of strategy. Equally important he acknowledges that the best leaders are continuously focused on improving themselves and their businesses.

Above all else, “successful leaders are prioritizing their employees. They consistently remind employees how their work contributes to the company’s overarching purpose and emphatically celebrate wins and milestones”.

A good read for inspiring entrepreneurs, and well-established businessmen and women alike.  

How important are Goals, Coaching, Accountability, and Rewards to your business or organization?

As I work through the TopTen, this week we will address The human aspect of an organization, using my Productivity Pyramid®.

Welcome to Part 2 of 10.

2. Productivity Pyramid® If you like what you read please be sure and like the page.

An essential element of a productive company is to have each employee have Goals, Coaching, Accountability, and Rewards – or the Productivity Pyramid®. I have managed the optimization of over 150 companies that have gone through this one method – the top ten experienced a 20 to 200 percent productivity gain.

What are the characteristics of a good coach? Good coaching is not a born trait but needs to be nurtured and taught to an executive to achieve solid results.

It is important to know and use the 6 “Ws” of quality goal setting. WHAT, WHO, WHERE, WHEN, WHY, and WRITE IT DOWN – then quantify the objective with steps to complete.

Active Listening is one of the most important characteristics that a person can develop. Most people are active talkers instead of active listeners. A good coach uses active listening to bring out the highest performance in an employee.

KNOWLEDGE IS POWER

BUY VIDEO & MANUAL

This principle also applies to interactions with family, friends, employees, and acquaintances. It is amazing how much relationships improve with active listening.

GOALS – COACHING- ACCOUNTABILITY – REWARDS

A supervisor/manager/executive should brainstorm with each employee for ideas on how to improve their job, effectiveness, and productivity, rather than a top-down mandate for performance improvement. If an employee is engaged in the process, the probability of success goes up significantly.

Do you understand why an Independent Business Valuation Services is Important?

What happens if you purchase the business based on the owner’s valuation and the asking price only to find that the valuation was incorrect and that the business is worth much less than you paid?

When the time comes to sell your business or when you are looking to purchase a new business it is important that you are aware of the value you are dealing with for your company or the company that interests you.  Many sellers have a business valuation service provider create an estimated value before they list their business.  The buyer can use the provided valuation or obtain an independent valuation before making an offer to purchase the business.

Independent valuations are your choice, but they can be important.  There are different methods of valuation and even different costs involved.  If the seller has chosen a basic calculation analysis type valuation, and you would like more details as to how the valuation was formed, the expense of an independent valuation is your responsibility.

As a seller of a business, you will want a valuation to determine your asking price and to show to potential buyers.  Do not become irritated or offended if the buyer prefers to have his own independent valuation done as well.  This is simply good business sense, in fact, if you have a potential buyer who does not have questions about the value of the business and who takes your list price and provided information at face value then you are likely dealing with a novice business person.  Remember knowledge is power, so the more information you provide and the more information the purchaser collects the better the sale will go.

No one wants to purchase a business blindly or rely on a valuation presented by the seller without first doing their own investigation of the value of the business. What happens if you purchase the business based on the owner’s valuation and the asking price only to find that the valuation was incorrect and that the business is worth much less than you paid?  You have taken a loss on an investment, and have no one to blame but yourself for not being an informed buyer.

The cost of an independent valuation is minimal when compared to what you stand to lose if you make a poor purchasing decision.

Excel Management Systems’ thoughts and prayers go out to those fighting to preserve the sovereignty of their country in Ukraine. These events will have repercussions for everyone in our global system. The consequences could take generations to overcome. When history repeats itself, it’s time to “say something”. It’s time for peace. It is time to stop the unjustified and horrendous attack on the innocent. I encourage you to watch the following video, it is very touching. Video by: Snowflake (CC Mixter)

A few charitable links below. For a larger list check out CBS News: https://www.cbsnews.com/news/russia-ukraine-refugees-donations-charity/

The Forbes Advisor: https://www.forbes.com/advisor/personal-finance/donate-relief-to-ukraine/

_________________________________

• CARE. The international humanitarian group is providing food, water and other items to families fleeing violence in Ukraine. Contribute here.
• Convoy of Hope. The disaster relief group says it’s partnering with a local Polish organization to provide meals to refugees entering Poland, as well as to deliver food, water and other basics across the region. Donate here.
• CORE. The emergency response nonprofit is on the ground in Poland, distributing hygiene kits and thermal blankets, as well as emergency cash assistance to help families resettle. Contribute here.

Mobilizing our response in Ukraine and nearby countries: https://t.co/6KSgP1MRLK

— Doctors w/o Borders (@MSF_USA) March 1, 2022

• Doctors Without Borders. Staffers with the medical relief organization remain in Ukraine and are “seeking ways to respond to the medical and humanitarian needs as the conflict evolves.” Offer support here.
• International Committee of the Red Cross. The Swiss-based organization is supporting the work of the Ukrainian Red Cross in helping those impacted by the war. Donate to the ICRC.
• International Medical Corps. The first responders’ organization has teams inside Ukraine and in the surrounding regions to offer medical and mental health services. Link to contribute.
• The 762 Project. Volunteers have been collecting, analyzing and posting information about Russia’s troop buildup along Ukraine’s border for much of the past year. Support the project here.

The #NBU has transferred for the National Guard of Ukraine UAH 450 million collected on a special account to raise funds for Ukraine’s Armed Forces. #StandWithUkraine https://t.co/e1L6ktOhd5

— NationalBankUkraine (@NBUkraine_eng) February 27, 2022

• Project Hope. The global health and humanitarian relief organization is on the ground in and around Ukraine delivering medicines and medical supplies. It has teams in Ukraine, Poland, Moldova and Romania. Donate here.

For a larger list checkout CBS News : https://www.cbsnews.com/news/russia-ukraine-refugees-donations-charity/

The Forbes Advisor: https://www.forbes.com/advisor/personal-finance/donate-relief-to-ukraine/

________________________________________________________

Many companies who are looking to sell their company are constantly looking for small business valuation ideas.  Let’s face it, selling a company can be difficult especially when you are attempting to come up with a sales price that is fair for both parties.  If you are having trouble selling your company, try the following tips to improve the value of your business.

Grow Your Revenue

It may seem obvious, but steady revenue growth is one of a handful of small business valuation ideas that is sure to increase the value of your company.  Higher revenues normally translate into larger profits which acquiring companies look for when they are shopping the market for business opportunities.

Pay Down Debt

Paying off debt is a quick way to increase the value of your business.  When you pay down debt, your profit margins instantly increase because you do not have to pay to service your debt.  Interest charges can really take a toll on many small businesses’ finances, so take the first step to prepare to sell your company by paying down debt as quickly as possible.

Show Strong Recurring Revenue Streams

When businesses are looking to buy your business, they want to take the least risk possible.  One way to protect their risk is to only buy companies that have strong recurring revenue streams.  When a company sees that your company has long-term customers who come back year after year, this is a strong indicator that your business will remain successful over the long haul.

Competitive Advantage

One of the most important small business valuation ideas is to build a company that provides a service not provided by anyone else.  If your company can separate itself from others in the marketplace, this is an instant way to increase your value to potential suitors.

Valuation link https://successbiznow.com/valuation-financial-services/

If your company can pay down debt, show strong recurring revenue streams and gain a competitive advantage in the marketplace, you are sure to increase the chances that other firms will take notice of your company and potentially look to acquire it through a merger or acquisition.

Wonder what trends will reshape the small business landscape in 2022 and beyond?

Rich Rao  VP of Small Business at Facebook, brings up some good examples of how small businesses have creatively transformed over the past two years. In his article 4 Trends that Will Reshape the Small Business Landscape in 2022 and Beyond, Roa credits small businesses for “spotting untapped opportunities in our collective “new normal.” Our new normal has definitely been reshaped.

“spotting untapped opportunities in our collective “new normal.”

Rao, discusses 4 trends taking place in the business environment including what he terms the “evolution of entrepreneurship”. Kind of an outpouring of creativity, and sharing of that creativity in the digital environment. He notes how entrepreneurs have creatively used technology to open avenues to drive sales and build their brands. He provides examples to help readers grasp the possibilities that exist for their own businesses.

While we all know creativity is a must in business, so is messaging. Roa notes that “messaging paves the way for the next era of communication”. The era of digital communication. Still, he is wise to mention that some things remain the same, specifically how we interact with our customers is paramount to success. Emphasizing that the use of technology, simply makes it easier.

A short read giving credence to creative thinking and business trends online, offline, and in-between.

The complexity of Equity Warrants Valuations – Do you know the types of Warrants?

If you have recently been offered a warrant as a perk from a company you work for, it may be a good idea to use a certified valuation service to determine what you should do with the warrant as well as when you should complete it. Though the Black Scholes options pricing method can offer you a basic understanding of the potential value of the warrant, a certified valuation service will have a full understanding of some of the details of a warrant as listed below.

Warrants are often offered by companies in order to “sweeten the deal”. The idea of a warranty is to offer stock at a predetermined price for a predetermined amount of time which can range from 2 years to the end of time.

The only time a valuation of a warrant is simple is when the open market offers the stock at a lower price than that of the one offered on the warrant. Even then a valuation is needed in order to determine if the stock is worth the purchase price, but at least you know what the warrant is not worth. In every other case the valuation is complex and can even depend on which type of warrant you have. There are detachable warrants, wedded warrants, covered warrants, and naked warrants.

Generally the longer you have a warrant, the less it is worth, so part of the valuation process depends on the time of expiration. The lack of dividends given to warrant holders, interest rates, dilution, premiums, gearing, and implied volatility all influence the valuation. A certified valuation will also consider how the use of a warrant will have an impact on the value of the stock because the use of a warrant will impact the amount of shares, which will in turn impact the value of the stock.

A certified valuation service can take the pressure and worry from learning formulas and valuation models. They return comprehensive reports with specific values for all forms of warrants within your company.

Are you struggling to understand the valuation of preferred stock? Or even the type of stocks?

Before attempting to understand the valuation of preferred stock you must first have an understanding of the term and what makes preferred different from other types of stock. By understanding what you are dealing with you are then able to discuss your needs with a certified valuation service which will help you understand the value of your preferred stock. If you are not familiar with the various terms and protocols involved with different types of stocks it can be very confusing.

The actual definition of preferred stock is equity that has priority over common stock with respect to dividend payments and asset distribution during liquidation. There are some characteristics of both common stock and debt with preferred stocks, making preferred a type of hybrid stock. It can be challenging when planning and checking your assets to designate specific types of stocks to maintain a healthy balance without knowing the value.

 It may be confusing as to how a stock could be considered a debt, but the dividends on preferred stock are typically fixed and the claims of those preferred stockholders go against the assets of the company. If this still seems like a foreign language to you, you are not alone; this is why companies have accountants and valuation services to track their assets, debts, stocks, and financial investments.

The hybrid personality of preferred stock is what can make it difficult to accurately value this type of investment. While the idea of offering public and private stocks is a good one, it is important that you know exactly how each type of stockworks and what you can do to ensure that you always know the value of your company for all forms of equity stock or units.

 A certified valuation service can take the pressure and worry from learning formulas and applying valuation models. They return comprehensive reports with specific values for all forms of stock or units within your company. 

Looking for a way to avoid a significant reduction in the value of your stock based on its ability to be marketed adequately?

Marketability Discount – “The concept of marketability deals with the liquidity of the interest—how quickly and certainly it can be converted to cash at the owner’s discretion. ”Source: Chapter 6, Fundamentals, Techniques & Theory, National Association of Certified Valuation Analysts (NACVA)    

We will define Marketability as the ability to convert the property to cash quickly, with minimum transaction and administrative costs in so doing and with a high degree of certainty of realizing the expected amount of net proceeds. ”Source: Valuing Small Businesses & Professional Practices, Pratt, Shannon P., McGraw-Hill, New York, 1998

According to materials presented by NACVA, discounts for a lack of marketability (as determined by court cases) have ranged from 10% to 52%. A great deal of research has taken place over the years to understand this discount and to determine acceptable or normal ranges for various types of companies. This report has taken advantage of more recent studies completed.

The discount for lack of marketability (DLOM) can mean a significant reduction in the value of your stock based on its ability to be marketed adequately. This is one of three discounts that need to be taken into consideration for overall stock, equity, and business valuations. There are several key points that a certified valuation expert will consider when trying to estimate the discount for lack of marketability.

·      Are there potential buyers in the industry?

·      Has the company been approached by any potential buyers?

·      Is there a current opportunity to liquidate the equity stock or units?

·      Has the company produced sufficient earnings to be a potential target of acquisition?

·      What is the consistency and size of the revenues?

·      What is the revenue growth and the stability of that growth?

A  certified valuation service can use the information above to help give you an accurate value of your stock, units, and business and the amount of the discount for lack of marketability.

In general, the faster and easier a potential equity element can be liquidated, the lower the marketability discount. A certified valuator will take into consideration the above elements to determine the lack of marketability discount is appropriate for your business.

Need more than the “Rules of Thumb” method, when doing a valuation? Valuation methods are complicated and can result in significant errors and lost value.

Corporate valuation services are completely different than valuation services for homes and other material possessions. In fact, they are even different from the services offered to sole proprietors. There is a very good reason for this difference. For one thing, compared to sole proprietors, corporations are much more complicated than those owned and managed by sole proprietors. That is because there are so many elements to a corporation that simply do not exist with a sole proprietorship.

There are basically three methods that are used for completing a corporate business valuation. Within those methods are subcategories and enough details to make any corporation understand that a business valuation is not something that can be done as a simple accounting department project. If you do try to do this as an in-house project, your company is likely going to end up losing value when it comes time to sell or get investors involved.

The market approach is one method of valuation. The main variable in this method is the price that similar companies are selling for on the current market. However, there are plenty of other variables to consider. For instance, do not assume that because you make a tennis shoe in a similar style as Nike that your company has the same value as Nike.

Income value methods depend mostly on a benefit stream analysis. Discount and capitalization methods are of primary concern for this method of valuation services. Again, there are many other elements to consider, but the primary one is the benefit stream which includes net profit, cash flow, non-cash expenses, and market price expenses.

The asset formula considers not only the assets that the company has and their current value but the liabilities as well. This does not mean that the only things considered are the accounts and material goods that the company holds. This valuation method takes into the current value of the assets as depreciation methods make a large difference in the true values.

As you can see, valuation methods are complicated and no business should use “Rules of Thumb” methods as they will most likely result in significant errors and lost value.

While it is true that there are several different business valuation methods, they do not have to be confusing. If you have questions about selling your business, it is wise to enlist the services of a business valuation professional who can give you sound advice as to how to go about selling your business. These professionals will be able to point you in the right direction in terms of which valuation method to use to sell your business.

When you look at your business, you probably do not see everything that a valuation service is going to see. You look at your business, while they look at not just your business, but the entire landscape of your industry. Before you are given any kind of idea of what your business it worth, they are going to dig in every nook and cranny to find assets and compare them to liabilities. Your profits will be researched and your company will be compared to other similar companies.

When is a Valuation Needed?

• Merger/Acquisition
• Financing Sale/Investment
• Estate & Gift Taxes
• Purchase allocation/Fairness Opinion
• Employee Stock Option Plans
• Life Insurance/ Shareholder Agreements
• Tax vs. Value Considerations

Which type of valuation services do you need? This is an important question and will affect the results and your final choice of provider. Calculation analysis looks at limited information and is often for people who are thinking of selling but have not made a final decision. Limited valuation analysis is common when the owner wants to save money and time for a fairly informed valuation. Full valuation services involve very detailed information as well as a visit from the valuator to provide the most accurate estimate of the value.

Dale Richards made Complex Valuation easy to understand and apply to raise the value of your company. Josh Newman from New York, New York, said he learned ways to apply operation optimization techniques that Dale presented to make a difference in the value of his company. Josh learned key business concepts from Dale Richards’ presentation on Business Valuation Principles – How to Increase Your Business Value, Financially, Operational and Strategically.

When you complete a corporate valuation, you’re determining how much your business is worth. This can be a tricky process and you can get a lot of different answers depending on the model you use to calculate your corporate worth. The best thing that you can do for an accurate figure is to use corporate valuation services to come up with a very specific number for you based on certain formulas. You should also recognize that there are several different methods that can be used all of which could provide quite different results.

Liquidation: This number gives you the value of your business if you were to liquidate all assets right now. Because it is based on liquidation, it does not necessarily take into account future sales and production. Rather, it uses assets that you have on hand at the moment.

Compare: You can estimate your worth by comparing your business to similar businesses. This estimate should not be used for liquidation purposes because it does include future sales and other activities other than your assets alone. It can also be misleading since you cannot compare exact situations.

Industry Rule of Thumb: Essentially, this model uses general calculations to determine the value of your business. For instance, if you run an industrial machining business, your worth may be determined by multiplying the numbers of high-capital machines you own by an established dollar amount.

Seller’s Net Cash Flow: This method utilizes profit and loss statements to determine the worth of the business. Corporate valuation services can use this information to help you learn how to increase the value of your business through various methods. For instance, you might cut out some of the waste that you produce or limit spending in certain areas in order to increase your net worth. Again, it is always best to have professional valuation services work with you when attempting to sell your business.

Dale Richards Valuation & Business Concepts got Aaron Stapleton, Cincinnati, Ohio excited to implement. They included the 80/20 Customer “Gold Program”®, Productivity Pyramid®, Performance Dashboards or Rifle vs. Shotgun Marketing®.

When the time comes to sell your business or when you are looking to purchase a new business it is important that you are aware of the value you are dealing with for your company or the company that interests you. Many sellers have a business valuation service provider create an estimated value before they list their business. The buyer can use the provided valuation or obtain an independent valuation before making an offer to purchase the business.

Independent valuations are your choice, but they can be important. There are different methods of valuation and even different costs involved. If the seller has chosen a basic calculation analysis type valuation and you would like more details as to how the valuation was formed, the expense of an independent valuation is your responsibility.

As a seller of a business, you will want a valuation to determine your asking price and to show to potential buyers. Do not become irritated or offended if the buyer prefers to have his own independent valuation done as well. This is simply good business sense, in fact, if you have a potential buyer who does not have questions about the value of the business and who takes your list price and provided information at face value then you are likely dealing with a novice business person. Remember knowledge is power, so the more information you provide and the more information the purchaser collects the better the sale will go.

No one wants to purchase a business blindly or rely on a valuation presented by the seller without first doing his or her own investigating of the value of the business. What happens if you purchase the business based on the owner’s valuation and the asking price only to find that the valuation was incorrect and that the business is worth much less than you paid? You have taken a loss on an investment, and have no one to blame but yourself for not being an informed buyer.

The cost of an independent valuation is minimal when compared to what you stand to lose if you make a poor purchasing decision.