There’s an old expression about closing the barn door after the horses have run out that some believe is analogous to the downfall of Silicon Valley Bank. Theirs is a cautionary tale about the importance of balance sheets and reviewing potential areas of exposure before it’s too late.
While the effect of COVID-19 on small businesses can’t be overstated, it is far from the only threat companies face. Inflation is on the rise, and so are the number of tough choices that need to be made by those in decision-making roles.
Every business owner needs to pay attention to cash flow. Without money on hand, you can’t afford to make payroll, pay your bills, or make investments that drive your business forward. But if you’re unsure whether your cash flow is positive (“in the black”) or negative (“in the red”), there’s no better time to find out than now.
Beauty may be in the eye of the beholder, but business valuation is a lot more calculating than that. Whether you are actively planning to sell your company or just want a sense of its value in the current marketplace, it’s important to understand the metrics by which others will evaluate the value of what you’ve built.