Building Value in Your Business

In owning a business, you have taken responsibility for an entity, a "person," separate from yourself. On a daily basis, you make decisions, both operational and strategic, on behalf of the entity with goals of increasing revenues and serving your customers well. The goals you pursue are a means of creating value in the business. The value, though, does not only arise from the cash generated by the business; but also from the care and protection of the business' assets. Just as your own person requires physical, intellectual and spiritual growth and protection, so does your business. The growth and protection you provide to your business creates a body of assets that, viewed together, have value that can be transferred when you are no longer a part of that business. Decisions in your business will center around growing and protecting the body, the intellect and the spirit of your company.  These attributes translate into the physical assets, the intangible assets, and the business' relationships. Here's an idea of how each can be leveraged to build value into your business: Physical Assets. The “body,” or the physical assets of the company, such as equipment and inventory are the easiest assets to understand. They are tangible and can easily be transferred. Managing these assets for long-term durability and safekeeping through insurance protects them and helps them retain value. Physical assets also have cash flow and tax implications which can contribute value to the business if managed correctly. Intangible Assets. Intangible assets are the “intellect” of your business.  Intangible assets include elements such as the business' trade names, reputation, and intellectual property are uniquely valuable. Because intangible assets are inextricably linked to the company itself and to no other company, they are immensely valuable. Intangible assets, such as trademarks, copyrights, patents, trade secrets and customer lists, though, are only valuable when are protected properly. Formal registration processes and protective covenants in contracts are critical to maintaining and growing the value of intangibles. Relationships. The “spirit” of your business is found in its relationships with others.  The relationships of a business do create value, especially where the relationships are unique and protected by contracts. If your business has secured a key vendor, customer, or employee in an exclusive contract, that relationship has value that can be transferred as an asset of the business. The more secure the relationship, the greater the value. Decisions you make as the steward of your business entity, separate from yourself, are important to developing these assets into a package of value that will pay off when you are no longer in the business. Remember, as Michael Gerber, author of "The E-Myth" states: "The entrepreneur builds an enterprise; the technician builds a job." You’re not out to have a job – a business that is reliant solely on you for its value.  Instead, you're out to build an enterprise -- an enterprise that ultimately rewards you for your careful care, protection and investment in its body, its intellect and its spirit. If you'd like to learn more about this topic, I am co-hosting a seminar with Karrie Kohlhaas of Thoughtshot Consulting on July 22. For more information, visit <a href="../groups/teach-your-talent-tyt/events/building-value-into-your-business">http://biznik.com/groups/teach-your-talent-tyt/events/building-value-into-your-business</a>. 2009-07-09T15:21:25Z

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building-value-in-your-business

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In business, you are creating something separate from yourself that has value in the future. To successfully build that value for your business, you must nurture and protect the body, the intellect and the spirit of the business.

Building Value in Your Business

2009-07-09T22:08:55Z