It’s that time of year when you’re taking stock of what has occurred in the past 11 (almost 12) months, and deciding where to go in the next 12. This probably means you’re setting goals, deciding who you want to work with, taking a look at staff, equipment, inventory…You’re gauging the performance of just about every area of your landscape company.
This is great and very important, but I would also suggest that it’s the perfect time to measure the enterprise value of your company. There is no better indicator to help you see where your business is at, and set goals for where you want it to go than measuring your business’ enterprise value.
Enterprise value is the market value of your business or what someone would pay you to acquire it. Even if you don’t want to sell your business someday, understanding your enterprise value is always a good number to measure and know.
I spoke about enterprise value and how important it is to measure and think about in my “Build Your Business to Sell” presentation this year at GIC, and have since gotten a lot of feedback and questions about how to measure enterprise value, why it’s important and how to make it a priority.
So much feedback that I’ve been invited to talk about it again at the Financial Management Telesummit, December 3-5. I’ll be speaking on the topic on Tuesday, December 3 with Tom Fochtman from 8-9 pm EST. It’s a free event and I hope you join us. All you have to do is call in!
How to Measure Your Enterprise Value
In the meantime, here are some ways you can measure the enterprise value of your company:
- Take a look at your balance sheet. This is a great place to start as this will show you the book value of your business.
- Evaluate your Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA).
- Examine your customer base. Client growth and retention, as well as revenue growth and bottom line profits are a huge indicator of the enterprise value of your business.
We’ll talk about all of these items and more during the Financial Management Telesummit on December 3 from 8-9 pm EST. Click here to learn more about this free event and to sign up.
Hope you can make it!