“Habit is the intersection of knowledge (what to do), skill (how to do),
and desire (want to do)” -Stephen R. Covey
Being a business owner, you know this to be true. And you also know it’s something easier said than done. For the past 30 years, companies have been creating new categories of software to help automate processes and make businesses, their owners and employees more productive. Customer Relationship Management (CRM) Systems -- or cloud-based software -- is one example of a software category that has been embraced by small businesses.
At CEO COSULTING along with our partner BizEquity, we believe that the cloud has enabled a new category of software: Enterprise. Think about it: Businesses create value for their customers, their shareholders, their employees, and their owners, yet these same owners are unable to tell you what they are worth in real-time.
Now is the time to know what your business is worth and get in the habit of monitoring and
optimizing your valuation.
There are many critically import ant reasons why a small business owner needs to know the value of their business. Knowing the value of your business impacts everything from your taxes to being properly insured to buying or selling a business to seeking a loan and more.
As part of the blog series, we wanted to take a 30,000-foot view and encourage entrepreneurs everywhere to make valuation part of your daily habit.
Warren Buffett is frequently reminding investors and business owners about the importance of valuation, stating, “Business valuation is the heart of investment and risk management. Without it, you are blind.”
No one wants to run his or her business blindly. One simple habit to incorporate into your routine is to discover & monitor the value of your business so that you can optimize future growth. Once you know your business’s valuation, you can make decisions regularly that impact that metric. For instance, knowing your value enables you to be properly insured should an unforeseen circumstance occur. And being properly insured brings a peace of mind knowing that you have protected the two most important aspects of your life: your family and your business.
Additionally, regularly monitoring your business valuation allows a you to compare your own
value to peer businesses. This type of data monitoring increases your understanding of how you might adjust growth rate, and how hiring an extra salesperson and growing 40%, for example, could raise overall business value.
Going forward, monitoring marketplace shifts becomes much more relevant when you know your own business’s true value. For instance, it’s important to understand the impact on your business when another company is bought by a competitor for a high market value as related to a multiple of sales or earnings.
These types of events impact your business’s value whether you are monitoring your valuation or not. But when you choose to make monitoring a habit, you can make strategic decisions based on marketplace activity that optimizes your growth trajectory.
Getting into the habit of monitoring the most important financial measure is not only a smart move; it’s a definitive step towards building the future of your business. Business valuation knowledge is a new daily habit that is now within every business owner’s grasp. In conjunction with our partner BizEquity, the COSULTING Business Valuation promotes the technology that will help business owners know their worth so they can think, build, and grow their companies.
It will only take you 20 minutes to begin creating a daily habit by understanding the value of your business. To get a free business valuation CLICK HERE