Friends and clients of Emerge Dynamics were invited to an exclusive seminar for business owners and managers on October 25th, 2016 on Enterprise Value Growth
Our speaker was Ken Sanginario and an overview of the program is below:
How Can You Double Your Value?
Statistics overwhelmingly indicate that most middle market business owners believe their businesses to be worth far more than they are actually worth. Owners usually only find this out when they decide to exit and experience the harsh realities of the transaction market. Having waited until they want or need an immediate exit, owners often have little time left to impact the value of their businesses. They either settle for much less than they expect, or take short-term measures to attempt to increase value, but actually destroy value in the process. The good news is that most private companies have an opportunity to double their values if they adopt a disciplined, methodical approach to doing so, over a 3 – 5 year period.
This program will focus on the reasons for such wide gaps in value expectations between sellers and buyers, and what business owners can do to close the gap years in advance of any planned transactions. The benefits to the owner are compelling whether any transaction is contemplated, or whether the owner merely wants to operate his/her business in the most efficient, profitable, valuable, sustainable manner possible. The benefits are also important for any company interested in growing by acquisition, both from a preparedness standpoint and from a buy-side due diligence perspective.
We’ll explore the concept of Intrinsic Business Value, versus various other measures of market value, the many drivers of intrinsic value, how to assess them, how to develop methodical approaches to improving them, and how to measure progress. We’ll explore qualitative versus quantitative drivers, the element of risk and its impact on value, and how to build the long term sustainable value that will make the business “transaction ready” whenever the timing becomes appropriate.
If you'd like to be invited to our next in-person seminar, please subscribe to our free, monthly email advice on measuring business performance for business managers and owners below:
Emerge Dynamics sponsors the New Orleans screening of Poverty, Inc. on November 6th at 7 PM: View the trailer and reserve your free tickets here.
David Cusimano presents "Maximizing Business Value" as part of the financing module of JEDCO's Prosper Jefferson program: September 23, 2015. Contact Us to arrange for this presentation to your group.
"Dashboards have been a hot topic in business literature lately. Recommendations that business owners implement a dashboard for their business abound; however, advice on how to implement a dashboard is scant.
I can relate to this dilemma.
Occasionally, peers and potential investors would ask relatively simple questions about our company like, “What percent of your customers are repeat customers?”, “What is your break even point?”, and “What is your customer acquisition cost?” At the time, I was only slightly embarrassed that I didn’t know the answers. Regretfully, this led me to dance around the questions a bit and soon forget about my ignorance.
I was good at my trade and at finding team members were too. That’s all I thought I needed to know...." Read the Full Article at City Business' site or Contact Us for a copy.
"...work every day to ensure you’re offering a compelling value to the community in a way your competitors will have trouble duplicating. Take a week off and make sure your model is profitable and scalable before wasting any more time."
"You’re crazy – I can't take a week off. I’ll lose customers. You don't understand." Hilariously I was telling the successful millionaire entrepreneur he was the one who didn't understand.
He didn't give up and beat this message into me for months. Finally after several months, I realized he was right...."
"...Several years later I reflect back on that experience. Creating a growing business is different than being a professional in a particular field. Both are equally noble career paths, but the daily work of each is drastically different. Frustration arises if we attempt to continue the normal tasks of working in our field while we fool ourselves into thinking we are growing a business that will create value that lives beyond us. While industry knowledge and expertise are certainly valuable in excelling in a particular industry, unless we spend our days finding unique ways to organize our resources into a scalable platform for delivering compelling value for our customers, we’ve created a..." Read the Full Article at City Business' site or Contact Us for a copy.
"...A smile crossed my face as I thought about how many minutes we were saving. As I opened my wallet to figure out how much tip to leave, the worker spoke again. He confidently informed me, “We prepared your order this one time only because the girl who took your order didn’t know our policy. In the future, you’ll need to come inside to place your order. We have a policy of not taking orders over the phone.”
My smile disappeared, and I decided not to leave a tip.
Later that day, I reflected on my experience. The company had done exactly as I had asked. They had even made an exception to their policy in order to accommodate my special request. Why wasn’t I happy about this?
Should the eatery consider taking phone orders as part of their policy? Maybe. Maybe not...." Read the Full Article at City Business' site or Contact Us for a copy.
"Recurring media coverage and Pepperdine University’s ongoing Private Capital Markets project have increasingly brought the anticipated “baby boomer effect” on M&A into the business community’s consciousness. For the last two years the Private Capital Markets project has listed the number one reason for small- and middle-market business sales to be baby boomer retirement. Inc. magazine reports that the size of this effect is “65 percent to 75 percent of the small companies in the U.S. – some 10 million – will likely hang up a “for sale” sign over the next five to 10 years.”What has received only occasional coverage, however, is an unfortunate statistic listed deeper in the Private Capital Markets project report—almost 40% of attempted business transfers fail. And the largest reported reason for a transaction not succeeding is...". Read the Full Article at City Business' site or Contact Us for a copy.
"Last year, I was having lunch with a friend who excitedly told me about a new contract he had been awarded. The contract was $1.2 million in revenue at an impressive 40 percent gross margin and would add significantly to his existing revenue and net income. I congratulated him and encouraged him to tell me more.
I asked him what the payment terms would be with his new customer. He was billed monthly. I asked him how often he would need to pay his employees. He said every 2 weeks.
“Do you have $120,000 in your bank account or available on a line of credit?” I asked. “No,” he answered. “Why would I need that? I just told you that I’m going to make $480,000 (40 percent of $1.2 million) over the next year.” “Then you are going bankrupt in the ..". Read the Full Article at City Business' site or Contact Us for a copy.
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