Do you know what your business owns and owes? Do you know what your business makes and spends? More importantly – do you know what the equity is in your business or what it might be worth? It’s typical for an entrepreneur or for someone running a business to say “yes I know what we make and spend” but unlikely that they know what they own/owe and what the equity in their business is or what the value might be. Small and medium sized businesses can be so focused on surviving that they often don’t take time to see if the needle is moving in the right direction with respect to the equity or value of their business. This is unfortunate because one of the very reason businesses are started is to build value and one day be able to cash in or have that value recognized.
So where is the best place to start if you can relate to this?
A few months back our family bought a piano from a local piano refurbisher and after making several phone calls to book an appointment to have it tuned with no response, I decided to stop by the business to see if I could speak with the owner personally. I had met him when we purchased the piano and learned that he had been in business for more than 20 years. On this particular morning when I drove up to the front door it became obvious that the business had shut its doors as the space was empty except for the sign still displayed on the front of the building. Continue reading “It’s a sad day when you learn of a #failedbusiness”→
“Capital support” is a term I use to figure out how a business can access the capital they need to support their activities. Many businesses owners wouldn’t consider “capital support” an item that they would specifically and intentionally address as they manage their cash flow the best they know how as capital is needed. Taking some time to consider the sources of capital that your business has access to can help you plan your cash flow and reduce the amount of time and effort spent trying to scramble at the last moment.
Matt Horne, Founder and CEO of DECO Windshields chatted with me yesterday in a Google Hangout about all things business finance. Matt has built a company that generates over $5,000,000 in revenue and had lots to say about money, business and the learning curve that he has had to go on to keep the doors open while dealing with massive growth. He used a term – “fringe bankers” – to refer to capital groups in the market that have been able to help DECO with their cash needs. I like the term and think I will be adding it to my vocabulary.
This comes up often with small business owners – what is your business worth today? Many small business owners don’t usually have a clear answer or even an idea of how to value what they are building. I thought I would share some basic information about how to answer this question for those business owners that may just need a little bit of guidance.
There was no drama. There was no systems melt down. Everything went as it should yesterday when Twitter went public. Great to see another success story of entrepreneurs that start from less than nothing and by virtue of that position are forced to bend their will and work against the grain to produce something that adds more value to the world.