by Greg Caruso | Aug 11, 2023 | Exit Planning Business Valuation & Growing Business Value
What stories are you telling about your business?
Storytelling is a core part of business success. Beginning with the new employee onboarding process, new hires are welcomed with captivating narratives about the company’s journey, its values, and the achievements of prior employees. These stories educate the current employees about the company’s history and instill a sense of pride and belonging within the organization. The narratives of innovation and perseverance inspire everyone to strive for greatness and remind them that they are part of something bigger than themselves.
Progress and other meetings include regular storytelling sessions. At these sessions, leaders reinforce the company’s values and encourage open communication among the team. Stories of collaboration, problem-solving, and overcoming challenges serve as valuable lessons and strengthen the bond between employees. As the Company grows, so does the collection of stories, becoming a living tapestry of shared experiences and aspirations. This unique business culture, woven with the threads of storytelling, not only attracts top talent but also lays the foundation for a thriving, motivated, and united team that is ready to take on any challenge that comes their way.
What stories are you telling?
Hint – When your employees start repeating these stories, amazing things happen.
by Greg Caruso | Jul 13, 2023 | Exit Planning Business Valuation & Growing Business Value
Cutting expenses can potentially increase the value of a company, but it depends on the specific circumstances and the approach taken to reduce expenses. Here are some factors to consider:
- Impact on profitability
Reducing expenses can improve profitability, which is a key driver of a company’s value. However, if the expense cuts negatively impact revenue or customer satisfaction, the overall effect on profitability may be minimal or negative.
- Quality of expense cuts
Simply cutting expenses without considering the impact on the business can be counterproductive. Effective expense reduction requires careful analysis of each expense category, prioritizing areas that have the least impact on the business and identifying opportunities for cost savings and efficiency gains.
- Impact on employees
Expense cuts may require reducing employee compensation, benefits, or headcount. This can negatively impact employee morale, productivity, and retention, which can have long-term negative effects on the business.
- Industry and competitive context
Expense cuts should be evaluated in the context of the industry and competitive landscape. For example, if competitors are investing heavily in research and development, cutting R&D expenses may put the company at a disadvantage.
- Long-term vs. short-term impact
Expense cuts may have a short-term positive impact on profitability, but if they limit the company’s ability to invest in growth opportunities, the long-term impact on value may be negative.
Overall, cutting expenses can potentially increase the value of a company if it is done in a strategic and thoughtful manner that considers the impact on profitability, employees, industry and competitive context, and long-term growth opportunities. However, expense cuts alone are not a guarantee of increased value, and should be part of a broader strategy to drive growth and profitability.
by Greg Caruso | May 19, 2023 | Exit Planning Business Valuation & Growing Business Value
The saying “two heads are better than one” suggests that working collaboratively with others can lead to better outcomes and more effective problem-solving than working alone. In a business context, there are several reasons why two heads (or more) can be better than one:
Diverse perspectives
Collaborating with others can bring a variety of perspectives and experiences to the table, which can help to generate new ideas and solutions that may not have been considered otherwise.
Complementary skills
People have different skills and strengths, and working with others who have complementary skills can help to fill in gaps and create a more well-rounded team. For example, one person may be good at generating ideas, while another may be good at analyzing data and making decisions.
Increased creativity
Brainstorming and ideation sessions can be more productive and innovative when working with others. Bouncing ideas off of each other can spark new ideas and lead to creative solutions.
Improved decision-making
Collaboration can help to ensure that decisions are well-informed and carefully considered, with input from multiple perspectives. This can help to mitigate risks and improve the overall quality of decisions.
Support and accountability
Working with others can provide emotional and practical support, as well as accountability for following through on commitments and meeting deadlines.
Collaboration can lead to better outcomes and more effective problem-solving in a business context by bringing diverse perspectives, complementary skills, increased creativity, improved decision-making, and support and accountability.
by Greg Caruso | Apr 17, 2023 | Exit Planning Business Valuation & Growing Business Value
You may know that the quality of your employees can greatly impact the value of your business, but are you aware how your customers are affecting your profitability? It is important for businesses to identify customers who may be challenging to work with or who may cause problems that could affect the business’s reputation, profitability, or operations. Here are some signs that a customer may be difficult or problematic:
Demanding or unrealistic expectations
Customers who have unrealistic expectations or who demand special treatment or accommodations may be difficult to satisfy, and may require more time and resources than other customers.
Chronic complainers
Customers who frequently complain or criticize may be difficult to please, and may have a negative impact on other customers and employees.
Late or non-payment
Customers who consistently pay late or do not pay at all may cause cash flow problems for the business and may require extra attention and resources to resolve.
Disrespectful or abusive behavior
Customers who are disrespectful or abusive towards employees may create a toxic work environment and may harm employee morale and productivity.
High maintenance
Customers who require a lot of attention, follow-up, or support may require more time and resources than other customers, which can be challenging for businesses with limited resources.
Attracting the right customers is essential for the success and growth of any business. Here are some strategies that can help a business attract the right customers:
- Define your target audience: It’s important to have a clear understanding of who your ideal customer is, including their demographics, interests, needs, and pain points. This will help you tailor your marketing messages and strategies to better appeal to your target audience.
- Create a strong brand: A strong brand can help you differentiate your business from competitors and establish a unique identity that resonates with your target audience. This includes developing a compelling brand message, logo, color scheme, and visual identity that reflects your values and personality.
- Provide high-quality products or services: Customers are more likely to return to a business if they receive high-quality products or services that meet or exceed their expectations. This includes focusing on delivering exceptional customer service and ensuring that your products or services are reliable, user-friendly, and effective.
- Develop a targeted marketing strategy: A targeted marketing strategy can help you reach the right customers through channels that are most likely to resonate with them. This may include social media advertising, email marketing, content marketing, or search engine optimization.
- Offer value and incentives: Offering incentives, such as discounts, promotions, or loyalty programs, can help attract new customers and encourage repeat business. However, it’s important to ensure that these incentives align with your overall business goals and are sustainable over the long term.
- Monitor and adjust your strategies: Regularly monitoring your marketing and customer acquisition strategies can help you identify areas for improvement and make adjustments as needed. This may involve collecting customer feedback, analyzing data, or conducting market research to stay ahead of changing trends and preferences.
Overall, attracting the right customers requires a deep understanding of your target audience, a strong brand identity, high-quality products or services, targeted marketing strategies, value and incentives, and ongoing monitoring and adjustments to your strategies.
by Greg Caruso | May 2, 2022 | Exit Planning Business Valuation & Growing Business Value
A presentation for Jim Hitchner’s Valuation Products and Services Wednesday, May 18th, 2022 1:00 – 3:00 PM EDT
Jeff got up from his hospital bed after missing most of tax season and felt better. So good that three days later he canceled the closing on his 7 employee CPA practice. Unfortunately Jeff spent the next tax season in the hospital too and did not have a practice to return to. While this sounds crazy and far fetched it happens all the time.
How do you keep your exit and succession clients from being Jeff?
Presentation Description: Starting and then following through – taking consistent forward moving action is the biggest issue with succession and exit planning. In this presentation we will review seven major pitfalls that reduce business value and at times stop the process altogether. Several of these are common errors made by professionals and several are traps into which clients commonly fall into. Emphasis will be on maximizing value while continuing to take actions to move the process forward. A simple exit plan template will be provided to aid in initial discussions with the client and to prompt them to take the first steps. Click here for more details from a similar presentation.
You will gain a better understanding of what it takes to get your clients to start – and successfully finish – a business or practice exit and succession plan. If you provide succession planning, would like to add this service, or are just thinking about your own plan, this presentation is for you. This presentation is designed for advisors of smaller businesses with revenues typically under $10 – 20 million.
by Greg Caruso | Apr 10, 2022 | Exit Planning Business Valuation & Growing Business Value
“Daddy, I know how we get money.” Said my 3 year old son in his very deep voice.
“How?” I asked.
“We go to the ATM” he said.
Well my son was right. Prior to everything being cards and phones it was important to have cash and I would get my cash at an ATM at my bank. Often this was on the way to a family dinner and clearly my son was watching and absorbing.
The ATM is really a lot like a small business. You use a process to obtain money. Also like your business – think about how disappointing it is when the ATM does not work? Again, consistency creates comfort with an ATM and reduces risk (aren’t those two the same thing) with your business. The more profits or money with the least risk increases small business value.
How can you turn your business into a reliable ATM and increase your business value?
- Hire great people and train them and grow them.
- Work on your systems. “A great system is when ordinary people get extraordinary results every time.”
- Develop tracking systems for key metrics and things like collections that are important but easy to ignore.
- The less your business needs you the more valuable it is.
- Implement how you can make your company more “Sticky.” Sticky means your customers stick around. Repeating work like taxes, integrations simplifying things for your clients but creating hassles to move (think about how you bank may have done this to you?) Service contracts so you are the first call, etc.
- Investigate the profitability of your different products and services. Sell more of the high margin ones.
- Develop a marketing and sales system that is independent of any one person. Which would you rather own? A fast food restaurant with no customer alliance to staff or a restaurant where everyone comes because of a wonderful Maître D’?
Ways to make your business run consistently like a quality ATM are endless. Change and technology make sure this is a job that is never complete. But, when you build your business to run like an ATM you will have more fun running it and you will increase business value.
I’m a JD, CPA and Certified Valuation Analyst, and I know that valuation is an art. To find out more about professional valuation services for your business, contact me to learn more.
