Harvesting the Business
MARKET RESEARCH: Market research from around the world indicates that it is often basics that let business down.
SUCCESS FACTORS: The market research highlights the core drivers of business success and the common problems associated with achieving that success. Business owners should focus on these drivers to achieve their desired outcomes.
- 39% of businesses are profitable
- 30% of businesses breakeven
- 30% of businesses are losing money
Do you have a plan on how to become more profitable?
Do you have a business plan and profit forecast?
Research indicates that 70% of employees are not engaged in your business. Research shows . . . . . Organisations that have at least 80% engaged grow 2.6 times faster and have a far higher profit.
What % of your employees are highly engaged?
Less that 10% of strategies are successfully executed. Reasons:
- Only 5% of employees understand the vision of the company and the strategy
- Only 25% of managers have incentives linked to strategy
- 60% of organisations do not link budgets to strategy
- 85% of executive teams spend less that 1 hour per month discussing strategy
70% of CEO failures are a result of not being able to execute strategy!
Harvesting The Business
Only 21% of business owners sell or harvest their business
Research indicates that 79% of businesses cease to exist because of death, disability, sickness, bankruptcy or they simply stop trading. As a consequence only 21% of business owners sell or harvest their business.
The value of a business is all about risk. The higher the risk the lower the valuation.The lower the risk the higher the valuation.
To assess what your business is worth you need to assess:
Type of business: Determining what “type” category your business falls into which will provide you with the range of multiples of net business owner returns.
Narrowing the multiple: Determining the “attractiveness” of your business and pinpoint where you sit in this range.
Calculate the potential to improve: Determine the strategies you can deploy to increase your value.
RF Business Solutions is not a Business Broker, we work with you and your Broker to assess where your business is situated and the strategies needed to provide you with the best possible outcome.