Enterprise Value

I have been reading with interest the articles which have been coming through on LinkedIn and have noticed that, over the last while, that there seem to be an increase in the articles being published around this topic. QMI Solutions has been, for many years, picking this apart and providing tools, and consultancy on focused areas which match our expertise. As a result of this continuous effort to provide relevant information to our small to medium business clients, it was identified we required a framework which, not only measured a companies performance in dollars, but also provided the tool set to diagnose and provide the delta between current and potential enterprise value.

Based on our experience we have found -

  • the average amount of value businesses can create by strengthening their processes using CoreValue is 27.4%.

  • By implementing a clear road map of actionable steps to increase enterprise value, 21.6% is the average annual increase in value by our customers – your peers.

  • 95% of business owners think their company is worth more than reality; and 95% of companies have at least one red flag threat to their ability to monetise.

  • When CEOs assess themselves, they perceive that Barriers to Entry are well down the list of operational challenges. However, when asked to provide quantifiable data for this question, Barriers to Entry becomes the #1 value enhancement opportunity.

  • 26.7% of companies report lack of clarity in roles and responsibilities. These companies are telling us they have dysfunctional teams and deeper organisational issues; these issues hurt company value. The goal of course is to be a valuable, best-of-breed operator.

  • A valuable company has a strong positive culture where employees are proud of their individual jobs and proud of the company they work for. 13.2% of companies using CoreValue report a failing company culture threatening their value.

  • Just because you are hitting your numbers does not mean your sales are helping your company’s value. Here’s the key: do you have an effective Sales & Marketing organisation with transparent processes and procedures? Sales is an art, but more importantly, it is a science.

CoreValue Software - The CoreValue approach on enterprise value is V = PST, in other words, Value = Profit which is Sustainable (SME's ability to maintain its performance over an extended period of time / Transferable (SME's ability to maintain its performance without its current owner)

 

 

 

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