Business Finance – www.exkalibur.com

The Big River series is a 12 part installment about a company desperately seeking cash to fuel their growth and the struggles they face trying to find it.

Business Finance | Valuation | What kind of investor do I need?

A Weekly Business Finance series for Non-Finance Executives!

“Financial Adrenaline” is a term we love around here because it reflects our commitment to help you turbocharge your business with practical tips and techniques to improve free cash flow, the lifeblood of business. As a further extension of our Financial Adrenaline program, we’re going to share a new Business Finance Tip every Wednesday specifically for those business executives who don’t have a finance background. Our current Big River series started with We’re Making Money. Why are we broke? … then No Cash? Can we borrow what we need?, What if our loan collateral doesn’t cut it? and the need for outside investors.

Last week, we began our conversation about business valuation. We continue that discussion today with a valuable chart that will help you understand some of the key valuation principles.

____________________________________________

“Can anybody remember when the times were not hard and money not scarce?”

~ Ralph Waldo Emerson

What’s the difference between a Strategic & Financial Buyer

John Wilson, CEO of Ace Business Stuff, has been working diligently with his controller, Tom Sampson, to assess his financing needs. They may require an equity investor as he suspects that his controller’s right that bank financing may be insufficient.

“Hi Lary,” John said when he got Lary Blogger on the phone again.

“We’re almost finished with our forecast, but it still looks like we’ll need some equity. I’d like to explore what you said about strategic buyers and financial buyers and see the diagram you mentioned.”

Different Buyers have Different Perspectives

“John, this diagram is only meant as a general overview of some key valuation concepts,” I said when I visited with John at his office a few days later. “It should help you better understand certain key concepts which underlie the valuation of an ownership interest in your company.

The Strategic Buyer will pay the highest premium

“At the top is the Strategic Buyer. In short, he’s looking for more than a simple financial return. (more…)

Leadership Lessons | Are you only a legend in your own mind?

What Does It Take to be a Great Leader?

Nothing in life travels in a neat formation accompanied by bugles and cavalry. A lot of it shows up filthy and unkempt, prominent in the mess we’ve made around our foxhole. These lessons are typically the offspring of hubris, naivete and ignorance … or from overlooking the land mines hidden beneath our feet.

Every Tuesday, we’ll share valuable and practical leadership tips and tools to help you BE a better leader so you can BECOME a better leader. Remember … you won’t BECOME a better leader until you start BEING a better leader … implementing NOW the changes necessary to adopt the proven strategies of successful leaders. You might start by building on the communication matrix and making sure you’re defending the castle to get done what only you can do. Make some time so you’re thinking past today.

___________________

It’s Almost Midnight. Do you know where your cash is?

Okay, I admit it, I’m cheating a little this week … but I’ve got a few good reasons. Well, I’m calling them reasons anyway.

For one, I’m working hard to get ready for our Cash Flow Workshop, “It’s Almost Midnight. Do You Know Where Your Cash Is?” scheduled for May 25th. If you live in the San Francisco bay area, are not a financial executive and want to advance your business finance knowledge, our workshop is tailored for you.

Every successful business executive needs a solid grounding in the principles of cash flow … (more…)

Business Finance | Are You Ready for an Injection of Financial Adrenaline?

If you’ve ever exercised by lifting weights, you know that the amount of the weight on the bar is only one variable that needs to be considered for a particular exercise
If you’re doing a bench press, you can add more weight because your chest and shoulder muscles help your arms to lift the weight
But if you put 50% of that total weight on each of two dumbbells, you can’t lift either one
You’ve probably also learned that you can’t use the same weight for curls as you do for bench presses

How much weight can you really lift?

[pullquote]“Make everything as simple as possible, but not simpler
” ~ Albert Einstein[/pullquote]
Likewise, if you’re going to do only one repetition, you can handle more weight than if you’re going to lift it ten times
If you are lying flat, (more…)

Small Businesses – Stop Worshiping Them?

Doesn’t a lot of this jawboning about job creation make your brain explode?

I’ve never read articles by Rex Nutting before, who writes for MarketWatch on the WSJ Digital network … but a banker friend of mine referred me to his “Time to stop worshiping small businesses” article.

I’m not sure where Rex gets his information but his conclusions about the limited job creation value of small businesses is generally unsupported. After arguing, in Clintonesqe fashion about “it depends on how small the definition of small is”, he goes on to claim that while “small businesses do create a lot of jobs, but they also destroy a lot.” Citing a Census Bureau study, he claims that “once they pass their first birthday, small companies, on average, lose more jobs than they create. Many fail within years.”

[pullquote]Who says tax rates don’t matter to job creation?[/pullquote]

A recent study by the Ewing Kaufman Foundation reported an entirely different result, concluding that “80% of the jobs created in the first year are still here after 5 years.” There’s not enough detail available to comprehensively compare these disparate reports, but to debunk the value of SMB job creation requires a little more factual support from Nutting.

He also claims that tax rates don’t matter (more…)