It is has been said by so many people over the years, and I don’t know if it can be attributed to anyone in particular any more: We are the sum of our choices. Our businesses represent the choices which we as directors, managers, employees make each day, every minute.
- You purchase a new gizmo for the office which saves everyone a whole lot of hassle, and gets the job done quicker and for less money. You add value to the business.
- You buy a new gizmo for the office which is overpriced and continually breaks down. The support is very poor, and eventually it is consigned to the status of doorstop. Heads drop, productivity falls, the business has lost value.
We are reaching the closing stages of developing a new tool in collaboration with a software developer to add onto our business valuation methodology which will allow us to guide business owners more effectively in making key decisions which add value to a business, which will then one day be sold for more than it otherwise would have. It will form part of our Splinter program.
So as I sat with the developer, we went through an idea which can best be described as adding up the achievement of small business goals. It looks at the future business valuation effect of:
- making one more sale
- moving the GP% up one point
- a salary increase across the board of 8% or 9%
- Declaring a dividend of 10% of this year’s profit, or 50%, or not at all
- buying a new delivery vehicle
It is not terribly difficult to work out those results on a spreadsheet in as far as immediate cash flow and profits are concerned. But what effect will that sales presentation have on my retirement value in five years’ time? That is the real question. A sort of short term losses for long term gains approach in places you don’t even know you have places.
In the middle of this all, I have a chat with an old friend of mine, Tony Seifart. A bit of this, and a bit of that… I am a bit frustrated because a client of mine, in the middle of a sole and exclusive mandate snuck off behind the squash courts, and did a grubby little deal with someone else, continued to allow me to work on other deals, then boldly told me to get lost once his nefarious deal was safe. As I say, I am a bit frustrated because I cannot get any information, and the business does not have a PAIA manual… and he refuses to answer questions with righteous indignation which seems to be the preserve of the righteous and holy.
Anyway, I digress. Tony tells me of a website where businesses can have the entire PAIA manual put together for them for a paltry once off R350. So how does that add value to your business?
Here’s how:
- When someone asks for your manual, you push “send” on your computer, and move back to running your business.
- You don’t spend a day running around trying to work out what a PAIA manual is, googling like mad and phoning your accountant who will charge you more than R350 to give you the run down… And losing a day’s productivity in the process… You know this is true.
- If some sneaky attorney goes sniffing around at the Human Rights Commission for your PAIA manual, hoping to add to your stress… Well that’s one less charge to answer to, because this website will register you online, as part of the same fee.
- You don’t lose any sleep worrying about the R15,000 fine or whatever the jail term is (and there is one, for heaven’s sake!) for not having a manual.
- The cumulative time you would have spent fighting this fire can rather be spent selling, or producing, or relaxing, at some stage in the future. You’ll remember this point each time you push “send” in respect of this document in the future. And perhaps it will never be required, but at least you have that base covered.
That’ll add some value to your business, today. Oh the web site is http://www.legalcentre.co.za/.