The Top Destroyers of Business Value
by Barry Knepper, CFO/CPA
1. You are not your business-if you cannot separate yourself form the business, you have a job not a company
2. No recurring consistent revenues-instead of waiting to land a big fish, smart owners increase value through the creation of a smaller consistent revenue stream
3. Highly concentrated customer base-put your resources into acquiring new customers
4. Dependence on key employees without non compete agreements-intended for key management team and sales people that have a direct relationship with your clients
5. Not maintaining good records-if you do not maintain meticulous records a buyer will not be able to make an accurate valuation of your business
6. Not understanding financial ratios -ratio analysis helps you analyze your financial statements, identify trends and recognize areas of growth or weakness
7. Not optimizing the use of capital-small business owners are often wary of taking on debt, but in most cases they are leaving opportunities and returns on the table
8. Not understanding economic and business cycles-the local and national economy not only affects your cash flow but also the value of your business, but not good lasts forever and nothing bad last forever.
About the Author:
THE FRANCHISER’S ACCOUNTING PRO
Barry has experience with all financial aspects of the franchise industry having served as the CFO of a multi-concept franchiser and as a part time CFO to various franchisers , as an auditor of both financial statements and royalties for more than 50 franchisers and as a franchisee himself. Because of his experience as a franchisee, he understands the sensitive nature of the franchiser/franchisee relationship and works hard to preserve that relationship.Through his part-time CFO services he meets the needs of franchisers that do not need or cannot afford a full-time controller or CFO. He will help improve your financial performance and free up your time to so you can do what you do best -run your franchise.