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How to stop spending your time putting out fires so you can focus on growth

by on August 27, 2014

Putting Out Fires Quote

Are you thinking to yourself, “I’m constantly putting out fires!”

If you are then these fires are keeping you from focusing on what will grow your company and increase your valuation.

What you need is a process in place to deal with these fires.

What you need is to design your company to operate to “Best Practices” standards.

Unconscious Processes

Every company has “unconscious processes”.

What are they and how do you know if you have them?

It can be summed up this way: “We’ve always done it this way.”

As long as everything goes fine, there are no worries.

But that never happens.  There are always problems and issues.

These issues are symptoms of something else – Operating Risk.

This means you’re getting in your own way of growth.

They can be in any or all of the Core Categories in a company:

  1. Planning
  2. Leadership
  3. Sales
  4. Marketing
  5. People
  6. Operations
  7. Finance
  8. Legal

How do you know an unconscious process if you see it?

You’re constantly working on the “process”.

You get complaints about the process, both internally and externally.

You can’t get the info you need to make the right decisions to grow the company.

You’re not looking at the right metrics to REALLY impact your operations.

So What?

Why should you care about increasing operating efficiency?

Increased efficiency results in reduced operating risks.  This reduces your cost of capital.

And that automatically increases your valuation.

Increased Valuation

Just by operating more efficiently a company can increase its valuation.

You don’t have to have 10 more sales people, tweet more, or train old dogs to do new tricks.

Valuation Multiple

The value of every company is determined by either revenue or profit multiplied by some Multiple.

That Multiple is determined by a number of factors: those that SUPPRESS your value and those that ENHANCE your value.

Operating risks suppress your value.

Operate more efficiently and your multiple will increase.  That’s a fact.

Best Practices

The best way to operate more efficiently is to operate against “Best Practices” standards.

The best way to measure your company against best practices.  That means to identify operating issues that may be negatively impacting or at least suppressing the company’s valuation.

Then create a list of actionable steps and a timetable to implement and monitor your changes.

Then implement and record what you’ve changed.

This will improve your operations and create a logbook of improvements you’ve undertaken that will help in due diligence for your next round of fundraising or your acquisition.

Operating to Best Practice standards will make it easier for you to raise money and sell your company for a premium.  

Free Valuation Amplification Consultation

If you’re wondering how you build a company that operates to Best Practices standards, contact me to discuss the Valuation Amplification Process.  I also invite you to download the FREE paper and find out How to Quickly Increase Your Valuation by Thinking Like A PE Firm.


From → Strategy, Valuation

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