Not thinking about the value of your business is just as bad as dwelling on it. Why? Every game has a purpose for which all participants originally came together. Is the meaning of soccer exhausted by winning the World Cup? No, but without counting goals, kicking a ball wouldn’t excite 3.5 billion fans. By playing soccer, someone may be looking for entertainment, recognition, companionship, or even spiritual growth. Anyone can derive any additional value from the game. But only as long as he tries his best to win, not conceding but scoring goals against his opponent.
Similarly, business is a game whose goal is to create cash flow today and in the future. And if you bring the cash flow to the here and now, you get Company Value (CV). The market can idolize your business or devalue it to zero - that’s secondary. The important thing is, hand on heart, how much do you think your business is worth? Accuracy to the second decimal point is not necessary, a rough estimate is enough. An estimate of what? Progress in the game - is there an increase from CV1 to CV2 in 3 years, for example.
Without it, the founder’s priorities get confused in his head, and the company gets devoured by chaos. On the contrary, thinking about value, once a year or a quarter, reinforces the vector of order.
Yours sincerely,
-Alexander
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As a business therapist, I help tech founders quickly solve dilemmas at the intersection of business and personality, and boost company value as a result.
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