Business Valuation, Do it Before You Have To

Business Week has a "small business" area on their website, though it's not usually the best location for comprehensive vs. glossy knowledge. However, a recent article on business valuation by Jeremy Quittner (dated April 16) is quite good and comprehensive in describing the best ways to value your business. I leave it to you to hit the link so you can read it for yourself.

My beef is that folks usually wait for a crisis to hit before performing a valuation, i.e. when a sale is to occur, a partner is leaving, etc. From a value maximization perspective, the time to do so it is not right before you want to sell it, rather it's after you've had a chance to address the issues and clean up the cash flows. You generally fix up your house before putting it on the market, no?

The article mentions CPA's, business appraisers, and business brokers as possible valuation experts. Appraisers have the best tools and knowledge for the job, I would endorse them over the other two.

Getting Help Selling Online

Last week I wrote about full-scale online offerings for small businesses from Yahoo and Microsoft. These hosted services promise to launch you online and get you collaborating, selling and marketing as well. What if you don't need such a comprehensive solution and just want to sell your product into cyberspace? Then have a look at the options available from Flying Cart.

With Flying Cart you can be up and selling in two minutes (or so they claim). The Madison, WI company's free offering lets you launch up to 5 products, but prices range up to $30/month for unlimited products and transactions. The offering set includes:

• Web hosting
• PayPal integrator
• Email promotion
• and most importantly Store Networking

As described by Justin Petrocelli at Entrepreneur.com;

"Flying Cart helps retailers bring traffic to their sites by promoting their stores on search engines like Google and on local classified ad sites like Craigslist. The company's philosophy is unorthodox but refreshingly simple--time spent creating too many bells and whistles for an online store is time taken away from making sales. Flying Cart encourages its clients to get their businesses online quickly and make up the rest as they go. Shah (Flying Cart's founder) says the result is an online store that promotes itself."

In addition to Google and Craigslist promotion, cross-selling with similar stores online promises to be the big bang - the long held promise of the so called "network effect" where everyone links to raise the tide for everyone. A great try if it works.

Small business retailers would be wise to consider this option pronto.