Post a new topic
    3 Replies Latest reply on Mar 14, 2008 5:11 PM by TWheelwright

    How to Start a Business

    TWheelwright Wayfarer
      Owning your own business is one of the great American dreams. Those of us who own a business know that it comes with headaches and problems, but we cherish the good we can do as well as the people we meet and the freedom that our business can provide, both in time and money.

      None of us who owns a business is in it just for fun. We want to profit - both now and in the future. But how? How can you maximize the profits in your business now? And, how can you maximize the value of your business in the future so that you can sell it at the highest price possible when you are ready to move on? These are two of the most important questions ever posed by any business owner.

      Amazingly, very few business owners know the answers to the question of how to maximize the profit in their business. And even fewer know how to maximize the VALUE of their business. Most business owners don't even know the current value of their business.

      There are two keys to building business for the greatest profit and value. First, you must build a business that can run WITHOUT YOU. If you have to be there everyday, how will a new owner take over? Many business owners ARE their business. They are the face, the name, the production, sales and marketing of their business. Businesses like this struggle to produce much income because there is very little LEVERAGE.

      Leverage in a business comes from many sources. But the most important source is the business SYSTEMS. The first key to building a profitable and valuable business is to create the proper systems to run the business. Then, the owner can spend his or her time managing the systems instead of managing the people. Managing systems is not only more efficient then managing people, it also takes less time and effort and produces greater profit. Take McDonalds as an example. This is a multi-billion dollar company that is effectively run by teenagers!!! How? Through very intricate business systems.

      Systems are critical, but they are only the first key to building a profitable and valuable business. The second key is to understand how your business is valued. Every industry has its own valuation techniques. Of course, it matters whether you are planning to sell to employees, another business, a public company or whether you plan an IPO ("initial public offering"). But there are fundamental rules in every industry.

      How do you find out how your business is valued? You could go to a business broker and ask them. They could give you a few rules of thumb. But, if you really want to build a business with significant value, you should get a qualified business appraiser to do a business valuation of your company. This will tell you precisely what your business is valued at now. Then, you can review your weaknesses with a business evaluation and find out what you need to do to get to the value you envision.

      Systems and valuations may seem overwhelming. The good news is that there are professionals who can help.

      TAXES are the first thing that most business owners overlook, and above everything else it's usually the single most avoidable expense. If you are interested in learning more about ways to save $20,000 or more in taxes with your business, I am presenting a FREE teleseminar on March 18th related to saving thousands on your business taxes. You can find more details at our website under the seminars link.

      Tom Wheelwright
      Founder and CEO