1. How to Maximize the Value of Your Client, Inc.

2. Why do you Care?? n Business is an investment n 1st or 2nd largest personal investment you have n Someday you may want to sell it

3. How to Maximize Your Company ’ s Value À Plan for Success Á Hire/Have Great People  Be Financially Savvy à Utilize Value Drivers

4. Planning for Success n Over time a company achieves three different results from: –NO PLANNING –POOR or PARTIAL PLANNING –SUCCESSFUL PLANNING

5. Planning for Success n How are we organized to – Achieve the company purpose? – Deliver value to the customer? n Three primary functions must work well in every successful company

6. Three Primary Functions at every Company Sales & Marketing Revenue, Sales Bids Made per day, wk, mo Bids Won per Bids Made Get WorkDo WorkGet Paid ($) Operations Variable Cost (COGS) Labor Cost Material Cost Job Tracking Revenue Cost ProfitFinance P&L Balance Sheet Cash Flow A/R, A/P Fixed Cost (Overhead) Must organize to do all of these successfully

7. Hire Great People (corrollary-have great people) n How?? –Improve your interviewing skills n Weakest skill in owners & managers n Easy to improve –Interview all the time n Will increase skills n Will find great people randomly

8. Hire Great People n Ask the Right Questions –3 things you can always learn in an interview n Job related skills and experience n General intelligence and aptitude n Personality and attitude

9. Hire Great People n General Intelligence and Aptitude –“ Tell me how you go about making important decisions? ” n Personality & Attitude –“ Describe the best boss you ever had. ” n 20 Best Interviewing Questions –Including Taboo questions you can ’ t ask.

10. Have Great People n Define the Job –What am I responsible for doing? n Hold them accountable for the Job –What did I get done? –Employees should be able to answer the question: How do you know you did a good job? n Pay for Performance –Who contributed to the company success?

11. Be Financially Savvy n Can you answer the following: –What is your business ’ s Gross Margin? –How much Working Capital does your business have? –What is your business ’ s Breakeven Point? n If so, consider yourself financially savvy!!!

12. Be Financially Savvy Don ’ t have to be a financial wizard Don ’ t have to be a financial wizard n Learn what they are and how to read an: –Income Statement –Balance Sheet –Cash Flow Projection n Manage the Cash Conversion Cycle

13. Cash Conversion Cycle Customer Order Use mtl & labor for Customer Order Pay for Mtl & Labor associated with Customer Order Receive Cash from Customer Deposit Invoice Pay Payroll/ Bills Collect Be Financially Savvy

14. Value Drivers My business ModifyMeasure Modify Measure

15. Value Drivers n Why? –It improves performance n Hawthorne Effect n Primary - pay attention n Secondary Effect n Set Visible Goals n Tertiary Effect n Compensation tied to Goals

16. Impact of Value Drivers

17. What can I measure? n Short List –People/Asset Utilization n # of hours used / # total hours available –Sales of Product or Service n By employee per week, month, quarter, year –Productivity n Gross Profit % - good overall measure n Aged Receivables (% over 30, 60, and 90 days) n What are the trends? n From last week, last month, last year?? n Develop the Business Plan around achieving the most important Value Drivers

18. What can I measure? n Short List –People/Asset Utilization n # of hours used / # total hours available –Sales of Product or Service n By employee per week, month, quarter, year n Sales / Net Profit n Sales / Sales Target n Warranty Claims / Sales (Warranty % of Sales) n Days Sales Outstanding (DSO) n What are the trends? n From last week, last month, last year?? n Develop the Business Plan around achieving the most important Value Drivers

19. You Create Your business ’ s Value Plan Well & Have Great People Be Financially Savvy Value Drivers