Using valuation as a tool for decision-making will align short-term and long-term interests as well as remove emotional fears.
The goal of valuation is Profit Maximization. Your objective is to reduce “Risk and Spend.” Here are two strategies:
- Increase near-term earnings by improving levers that impact a combination of Revenue, Operations, Workforce, G&A, and Management Scalability; and
- Create strategic options for value creation (alliances, acquisitions, partnerships, etc).
Should you invest more in marketing? What about implementing a performance review system? Contemplate these decisions based on the impact on the company’s valuation and you cannot go wrong.
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