Preface: You need to be the cartographer for your business in an ever-changing business landscape; your business skillset to map the right path forward in your industry will contribute substantially to future business value.
Investing to Double Your Businesses Value – Part V
Cartography is the art and science of making maps. Although the concept of a spherical Earth was well accepted by the time of Aristotle in 350 B.C. and has been widely accepted since, in ancient history, some map makers thought the world was flat. The oldest know maps in history are Babylonian clay tablets from 2300 BC, and since that time have been largely replaced in recent years with companies like Tele Atlas contributing to Google maps and LCD screen displays with programmable features called a global positing system. With more 20 petabytes of data all from within three years, the twenty million gigabyte equivalent data sets are integral to business and personal transit today.
One certainty – maps have been a fundamentally important contributor to the development of modern society. We may take the value of maps for granted, but without them, reaching destinations would likely be more challenging.
Doubling the value of a business requires more planning than mapping a coast-to-coast trip. Entrepreneurial ventures too require a mapping of the business journey to doubling the business value, i.e. where will we start, where were we yesterday, where are we today, and where will we be tomorrow with regards to value?
A Business MAP, a Marketplace Assessment Profile, is a good tool to help you reach your business destination. A Business MAP is a business planning tool that helps you make sense of your business: the services and products viability in the marketplace, your business’s competitive advantages, industry risk, resource risks, opportunities, and value drivers. A Business MAP looks at your business on both a macro and micro scale and provides a guide for your businesses future. A Business MAP helps you plan your business destination, whether it’s organic expansion, a gear-up, etc.
- Services: What does your business sell? Business is about selling products or services. Nothing happens in business without a sale. What are opportunities for the sales of products or services? What will you sell more of to increase sales and, therefore profits, or how will you add asset value?
- Competitive Advantages: Monopolies have no competition. Likely your business doesn’t have the advantage, so what sets your business apart from the competition? What advantage does your business hold (or disadvantage) with locations or customers? What niche areas of sales provide an edge in the marketplace? What moat does your business own that secures and develops the value increase?
- Industry and resource risks: What risks face your business? How will you manage the risks? What resource concentrations face your business – from vendor’s concentrations to fixed or variable expenses, what are the cost drivers; how can they be minimized? How can you reduce risks to add value?
- Opportunities: What opportunities will increase gross sales, and net income or asset values; and, or, decrease liabilities to increase value?
- Value drivers: What will drive the value increase in sales or assets in the marketplace? Will it be new markets, locations, sales teams, or acquisition of competitors say, or simply Fed policy?
A map is nice tool, but to apply the knowledge of the map you need a mode of transportation, fuel, and it helps to count the costs of the journey; naming a few of the advised travel planning steps. To double your business value, you a business MAP + much more. A business MAP is more than answering 5 question categories, and is beyond the scope of this blog. The above is only an introductory idea of what that strategic business mapping encompasses.
Summary: without mapping the steps to doubling your business value, good accounting, a well-trained talent pool, leadership or trusted advisors do not produce singular strategic ends. You are the cartographer in an ever-changing business landscape, and your ability to map the right path forward in your industry or business segment, will contribute substantially to future business values.
Step five to doubling your business value – a Business MAP