TITLE AND SUBJECT OF ARTICLE
How To Boost The
Value Of Your Business
All too often banks, potential investors, and creditors will determine a company's value based on financial statements. This is a mistake. Financials don't come close to telling the true story. Sure, they present the tangible value. But what about the intangible value? Company valuation is emotional—a company is worth what an acquirer will pay, what the market will pay, what the interested parties perceive. We see evidence of this frequently when companies with a trickle of r...
business, startup funding, business loans, equity investment, venture capital, debt-based financing
All too often banks, potential investors, and creditors will determine a company's value based on financial statements. This is a mistake. Financials don't come close to telling the true story. Sure, they present the tangible value. But what about the intangible value? Company valuation is emotional—a company is worth what an acquirer will pay, what the market will pay, what the interested parties perceive. We see evidence of this frequently when companies with a trickle of revenue are acquired for gushing millions or even billions of dollars.
Maybe you aren't planning on raising financing, securing a credit line, being acquired, or one day going public. You still need to continually boost the value of your company. A higher-value company has more options. It gets the right partners, preferential terms, and often a more glorious future. There's an art to value-boosting, and I am going to tell you how to do it. First, know the facts:
• Company valuation is emotional.
• Intangibles often matter more than tangibles.
• You can't build value if your business isn't enticing.
• You should always be selling: to financiers, customers, strategic partners, staff, and strangers.
I've used some or all of the following seven value-boosters to quintuple the value of my clients' companies and my own. These value-boosters have also worked for companies such as Google (GOOG), Microsoft (MSFT), YouTube, and many, many more.
1. A killer team and a killer business plan.
2. A hot board of directors and/or advisory board.
3. Specific strategic alliances. An LOI (Letter of Intent) with a partner ain't gonna cut it. You need a binding contract spelling out exactly what the terms of your deal are. Clarify how many widgets they will buy/distribute/co-market, the time period, as well as what happens if they default on the agreement.
4. New sales channels. Distributors, value-added resellers, outside sales forces, affiliates, joint-venture partners—all boost the value of your company. Of course, you'll track the performance of your sales channels. Use the affiliate tools in your online shopping cart to track the performance of your online sale channels, and use your accounting system or sales force management software to track all others.
5. Product line extension. Let's assume you sell a supercool widget. What's next? Son of Widget? Platinum Widget? Widget Extraordinaire? Map out your future product lines so financiers, partners, and staff can see where you are headed and how you plan to get there.
6. Intellectual-property (IP) portfolio. Protect your corporate jewels! A patent portfolio can be worth gold. A friend of mine sold his company for $425 million (with about $30 million in trailing revenue) because he had locked in so many patents. That's what the acquirer bought. They didn't give a hoot about the business.
7. Compelling prototype of product. This is key when you're in the zero or near-zero revenue range, as you'll see below. People need to see/touch/feel what the product will be like. Then they can envision your fabulous future.
Consider this example. A professional services firm with an initial value of $2 million hired me to help boost its value. But the trouble with services firms is they are often valued at only revenue times one. Ick. So we beefed up the board and advisers (adding $1 million in value), helped nail down specific strategic alliances ($3 million), mapped out a line of "productized" services ($2 million), and developed new sales channels ($2 million). About six intense months later, the firm sought financing with a respectable pre-money valuation of $10 million. It closed the financing in three months.
Then there is the example of the Internet promotion company I started with no revenue. Before seeking financing, my team and I had to answer the question: How do you make an idea into a hot commodity? The solution consisted of pulling in a rocking team and coming up with a hot business plan (adding $1 million in value), developing a compelling product prototype ($1 million), locking in killer alliances ($1 million), and building an IP portfolio ($2 million). We took its value to $5 million in four intense, somewhat sleep-deprived months. Then we raised $2.5 million in financing with a pre-money value of $5 million, and a post-money value of $7.5 million. The $2.5 million invested bought one-third of the company.
Value is about potential. Potential today, potential tomorrow. The main reason you keep building value in your company, in all the tangible and intangible ways (and as I've shown you, the "intangible" ways often do have dollar values attached to them!), is because a high-value company gets the financing it wants on the terms it wants. It also gets multiple acquisition offers at fabulous terms. The high-value company gets the alliances, the staff, and the opportunities it wants, too.
Remember, you are selling the future as you are selling the present. The present must look promising for the future to be potentially glorious. What are you doing to boost the value of your company today?
How To Boost Your
Airbrush Art Business With Craft Fairs & The Internet
Airbrush art is a popular form of artistic expression in the world and it is also one of the most profitable. An artist is not just someone who picks up a pen or a paintbrush, but can also be someone who is capable of creating images through the use of airbrush art. Using a spraying device, art is created using an airbrush effect that sprays the paint onto a surface. Airbrush art can be controlled by the pressure the artist applies to the spray device or by how close he/she i...
Airbrush art is a popular form of artistic expression in the world and it is also one of the most profitable. An artist is not just someone who picks up a pen or a paintbrush, but can also be someone who is capable of creating images through the use of airbrush art. Using a spraying device, art is created using an airbrush effect that sprays the paint onto a surface. Airbrush art can be controlled by the pressure the artist applies to the spray device or by how close he/she is to the surface when spraying.
Each year, airbrush art professionals showcase their latest works of art at craft shows. Depending on the location, craft fairs are usually held in celebration of an upcoming holiday and/or season. If an airbrush artist wishes to enter their work, he/she must pay a registration fee in order to confirm their booth at the show. Most craft fairs are held at shopping malls, along parade routes, at state fairs or holiday celebrations. In addition, many beautiful pieces of airbrush art are featured online.
With a virtual airbrush art gallery, visitors will have the opportunity to view different sizes and varieties of artin all styles. Airbrush art is commonly found on t-shirts, license plates and other displays. But, it can also be found on canvas, just as acrylic or oil paintings.
Whether your are buying or selling airbrush art, the internet is a virtual haven for original artwork. Internet auctions are a haven for customers seeking art of all types, from the traditional to the one-of-a-kind. In exchange for listing an auction, sellers will have the opportunity to have their airbrush art seen by customers around the world.
The internet also provides a way for airbrush art to be shown on a website or created as part of a freelance work assignment. There are a number of companies who are constantly in search of a customized logo and may consider airbrush art as a possible option. In addition, magazine and newspaper editors regularly publish original airbrush art and are actively seeking artists capable of submitting quality material. Many comic strip artists are syndicated, but freelancers may find success in self-syndication through contacting the editors and selling their work directly.
Individuals who create airbrush art should do so in a well-ventilated area. In addition, artists should wear protective eye wear to prevent the misting effect of airbrush art from getting into their eyes.
How to Choose a
Bank That is Right For You and Your Business
Your success in getting a Bank to support a request for finance depends upon you choosing the right Bank. So where should you look and what criteria should you use when searching for a Bank for your small business?
choosing bank, looking for a bank, applying for small business loan
Your success in getting a Bank to support a request for finance you may need does depend upon you choosing the right Bank in the first place. Even if you don’t initially intend to borrow any money, you should keep this possibility in mind when you are researching the market for the right Bank.
With competition increasing you can get some good deals if you are prepared to shop around. Also, don’t pass over the Banks which offer only telephone or Internet Banking for small businesses. If you operate a very small and simple business then an Internet only Bank account may be right for you.
So where should you look and what criteria should you use when searching for a Bank for your small business?
<b>Your Existing Bank</b>
If the Bank where you have your personal account offers business banking facilities then this may be a good place to start. You already know their level of service (good or bad!), the layout of the branch and perhaps some of the staff if you are lucky! This can make the whole process of opening a new account much easier.
But don’t open your business account at the same Bank just because it will be less hassle. You must still ensure that the services which go with the business account are what you are looking for and at the right cost.
<b>A New Bank</b>
Even if you have a good relationship with the Bank that has your personal account, don’t discount the opportunity of looking around. One reason to consider opening your business account at a different Bank is that of total separation between the two aspects of your life – your business and personal life.
Consider whether you want one institution to have complete control of your business and personal finances. If you do go through a sticky patch in the business, would you feel comfortable with the Bank seeing what you have sitting on your savings account?
If you have no preference for a particular Bank then location of your Branch may be more of a priority, especially if you will be paying in a lot of cash where a bank just around the corner would be very useful.
Some businesses have very simple needs when it comes to banking. If you don’t handle cash or large volumes of cheques and are happy banking over the telephone or Internet then location is obviously less of an issue! But be mindful that the lack of a ‘real person’ to talk to could be a frustration when you have a major problem to sort out.
If you have no particular Bank in mind, or you are only interested in getting the very best deal, visit as many as you can so you can make an informed choice. Ask to speak to the Manager and tell them you are interested in opening a Business account and that you are looking for information.
The good ones will spend time with you, offer you brochures, talk you through the process and the leaflets and tell you about their range of services. How you are treated at this early stage will give you a good idea of how you are likely to be treated later on.
Now is the chance for you to get to know about what services and benefits they can offer your business. Ask questions such as,
• Do they offer on-line banking or telephone banking?
• Will you have a named point of contact? Or will you be put through to the dreaded Call Centre?
• At what point will you be able to apply for borrowing facilities and what are the standard terms?
• Do they provide help and support?
• What are the charges to operate the account?
• If you decide to open an account with them, what information such as ID or application forms will they need from you to open the account?
• Do they offer an opening incentive such as 12 to 18 months free banking?
<b>Could You Do Business With Them? </b>
Once you have done all your research take some time to assess all the information you have gathered. Which Bank offered you the best deal? Which Bank is the most convenient? Which Bank offered the services or products most suitable to your circumstances?
I have not mentioned probably the most important aspect for many business people – the person who is going to be looking after you; your point of contact to sort out the things that will go wrong! Ask yourself whether you could get along with him or her. A good relationship with your Banker is vitally important.
<b>And Your Decision Is? </b>
So, based on all your findings, which Bank stands out head and shoulders above the rest? Which one did you feel most comfortable with? Make an informed decision based on all the information you have gathered and then move on to the next stage which is actually opening your account.