| Business owners often times get caught up in | | | | growth. |
| phenomenal early success and, as a result, fail to equip | | | | You should always be looking to improve your cash |
| their organization with business strategies to | | | | flow. Try and avoid borrowing. You can factor |
| accommodate the 3 stages of entrepreneurial growth: | | | | receivables, maintain a stringent collection policy, |
| (1) Startup; (2) Growth; (3) Exit. | | | | negotiate better payment terms with suppliers, discount |
| START UP | | | | to customers for early payment. Maybe even increase |
| Aside from the obvious... have adequate resources | | | | margins if warranted. |
| and good management, entrepreneurs from the very | | | | SO YOU'VE CREATED THE VALUE-HOW DO |
| beginning should establish a business development plan. | | | | YOU EXIT? |
| The foundation for your business. At this early stage | | | | What most entrepreneurs don't understand is that you |
| of growth, the strategy should be somewhat informal, | | | | need to develop your exit strategy early on in the |
| a vision, if you will. You can't allow yourself to get | | | | growth stage. Understand the important value issues |
| stuck on a plan this early. | | | | essential to the success of your entrepreneurial |
| As the company evolves, you're looking for a pattern | | | | journey. |
| of decisions to develop to justify your strategic | | | | The return on invested capital must be greater than an |
| planning. You must learn to adjust to the feedback. BE | | | | investor's opportunity cost of funds i.e. operating profit |
| FLEXIBLE IN YOUR PLANNING. Your company is | | | | margins and use of capital invested. Is there an |
| taking shape. | | | | opportunity for a new set of owners to create more |
| THE GROWTH PHASE | | | | value than you? Is your business scalable...does it have |
| As the company grows, you can now see and feel | | | | upside potential? An excellent way to create value. |
| "the business" and structure a more formalized | | | | What are your options? |
| business plan. | | | | - You Can Sell Your Company |
| Business strategy, however, can never be fixed. Your | | | | - Strategic Sale to a Competitor-may pay a premium. |
| customer needs will change, your competitors both | | | | - Final Sale based on cash generating potential |
| existing and new will introduce new products and | | | | - Employee Stock Ownership Plans (ESOPs) sold |
| services...meaning your going to have to continually | | | | impart to employees. |
| rethink your strategy to compete in changing | | | | - IPO...for a multitude of reasons but primarily to provide |
| environments. There will always be external changes | | | | a liquid market for company stock. |
| in the market, competition, technology, and economical | | | | How to value your company? |
| and political changes. | | | | - Market Comparables |
| Managing the Growth | | | | - Free Cash Flow Valuation |
| - You have to hire and continually train good people. | | | | Terms of the Sale |
| Train them to acquire future skills. | | | | - Take cash as opposed to cash and stock. |
| - Establish organizational policies and controls to | | | | Investors are always concerned about how to exit. |
| continually monitor cash positions. | | | | Entrepreneurs should also make exit an early |
| - Accounts Receivable | | | | consideration. Don't wait for something to go wrong to |
| - Inventory Systems | | | | structure your exit. |
| - Accounts Payable Policy | | | | When it's all said and done. Invest carefully and know |
| - Monitoring Tools to Track Financial Performance | | | | what you want out of life and go get it. |
| - Financing-it's all about cash. For current and future | | | | |