For college football fans this is the time of the year when the various committees select teams to compete in the different bowl games played throughout the country. It is an exciting time for fans, players, and coaches. It represents the achievement of goals for many of the teams and serves as a reward for a long, competitive , and strenuous season.
End of the year rewards are not just restricted to sports. Companies will finish their year and many will have met or exceeded their original goals. The people who have labored diligently over the course of the year will be rewarded.
It is imperative that the goals set and achieved are moving the company forward. One way to know is by comparing the value of the company at the start of the year to its value at year end. Has it increased? Have those things that make a company more valuable improved over the course of the year?
In our book, The Exit Strategy Handbook, there is discussion on several areas that are vital to increasing the value of a business. A business owner would be wise to consider the following in determining if their company has indeed improved over the course of the year.
- Has EBITDA increased? The EBITDA method is one of the most common ways of measuring value(Mills, p.46).
- Has the owner been able to minimize distractions and remain a Finder in the business(Mills, p.59-61)?
- Have sales increased and have sales become more diversified(Mills, p.62-63)?
- Have processes and efficiencies been improved(Mills, p.64-65)?
- Has your branding been improved so that it clearly separates your company from the competition(Mills, p.67)?
If the above questions can be answered in the affirmative at the end of the year, then your company is increasing value and moving forward. You and your team are ready to go bowling and receive the rewards accordingly.
*Mills, Jerry, (2013), The Exit Strategy Handbook