Risky business? Not if you can help it
For a long time, Ketel Thorstenson has helped clients measure the value of their businesses. However, we can also help you maintain and improve that value. Ericka Heiser, business valuation specialist, wrote a newsletter article (in the fall issue of the KT Addition) about competitive advantage, reputation and employee ownership as ways to increase the value.
In her most recent article, Ericka deals with the other side of the coin: reducing the risks associated with business ownership. Managing cash flow, creating a healthy capital structure, making sure you are diversified and staying in one easy-to-find location are all ways to maintain your company’s value.
She said generating sufficient cash flow should be a number one priority. Once you get that challenge solved, you can start thinking about expansion. A healthy capital structure — not too much debt and not too much equity — will give you the leverage to expand and the resources to repay your debt. And diversification is essential — it’s never good to have all your eggs in one basket. And depending on the type of business you do, staying in one location can be important for keeping long-time customers. People are creatures of habit.