Building your business into an asset of value may include expanding through franchise opportunities. This week, onThe Money Show with Bruce Whitfield, we examined the key elements of what you should consider when assessing franchise opportunities:
Growing business value - Aurik Business Accelerator
By Pavlo Phitidis
The recent downgrade of South Africa’s credit rating to Junk Status will have a dramatic effect on our economy changing our socio-economic environment and introducing new challenges to business survival. This week, on The Money Show with Arabile Gumede we considered what this downgrade means for growing businesses, and looked at ways you can adapt to not just survive these circumstances, but thrive beyond it:
Aurik CEO and co-founder Pavlo Phitidis was the keynote speaker at the Innovation Bridge event in Midrand recently. With his constant exposure to the changing face of business, Pavlo shared some of his insights on how businesses around the world are adapting their thinking and finding new ways to use technology to reap the rewards of their vision. How can South Africans benefit in a similar way?
Even for established businesses, it’s not easy to make sure that you will be ready for whatever might happen in the future. Your company needs to constantly evolve, and you might find yourself in uncharted waters. So you have found your place in the market but how do you keep it? Complacency is a killer. How do you keep your business on its toes to build for resilience and business growth?
Business owners are bracing themselves for tough economic times with SA’s downgrade to junk status and a gradual economic decline, but what can we do to position ourselves to weather the economic storms ahead? We have a track record of helping businesses weather tough times and we have learnt a few things along the way. From goal-setting to adding new tools and getting to know your customer, we will help you put your business on the road to growth.
By Pavlo Phitidis
Very often, the bigger your company, the longer it takes for you to innovate. Agile small businesses can, propel their growth by adopting workable technologies, that lead them towards solving customer problems accurately, efficiently and cost-effectively. This leads towards freeing up time, money and effort within the business and ultimately, enables growth. Freed from the shackles of bureaucracy and slow systems, you can digitize elements of your business to accelerate growth and value.
South Africa is lagging behind when it comes to innovation, according to a recent World Bank report. But why is innovation so necessary for business?We need to empower more people to participate in the economy, and innovation is necessary to create opportunities and stimulate growth. There is also a close correlation between levels of innovation and new venture start-ups. The more a country supports new venture creation and small business the greater the rate of diffusion of innovations in that country. Innovation can also be leveraged to improve business processes to save on costs or increase the value that's being provided to clients, and innovation can also be applied to augment client user experiences or even to better manage business risks.
By Pavlo Phitidis
Ultimately, the way you look at the world is the way that the world will turn out to be for you. Just as perspective drives experience, how you define your customer will drive the growth of your business. It’s an incredibly difficult, but highly critical, task that many business owners get wrong – they focus on their product and service, rather than solving their customers’ problems. Defining your customer correctly is critical, if you want to build a scalable business. On this week’s The Money Show with Bruce Whitfield, we outlined the five things you must get right:
By Pavlo Phitidis
Time stretched, on-the-go and always doing too many things at once can make us forget why we, as business owners do what we do. Here is a series of podcasts that will remind us that we should all, definitively, single-mindedly be building our businesses into an Asset of Value. What is it, how do we measure it, how do we build a business into an Asset of Value and more is consolidated into a series of 8 episodes.
Episode two: if you can't measure it, you can manage it. The three levers that you can build to measure and maximise your Asset of Value?
How are you building your business? Why do you do what you do? Build it into an Asset of Value and start today. Should you need some help, direction or certainty, Aurik will help you get it done in 24 months.
People sell their businesses for many reasons. Fatigue from too many years in the game is one of the most common. They might also choose to sell their business when they reach retirement age or fall ill and cannot work in it any more. Sometimes, increased competition drives them out of the market. Some business owners start their businesses with a planned sale in mind. Whatever your reasons, nothing can prepare you for the setback when you find that you can’t actually sell your business. That’s why it’s important to understand the factors that prevent your business from attracting buyers and how to bounce back and grow your business into an Asset of Value.
Factors that stall a sale
Buyers usually hesitate to close deals because they don’t see the value in the business they’re being offered. Many factors contribute to this, but the main ones are:
- The business is too dependent on the owner – If a business relies on its owner to operate at its best, it’s not an attractive purchase for buyers because they cannot buy the owner with the business. The same can be said if the business is too dependent on one employee, client or supplier.
- Buyers can’t identify any growth opportunities – Buyers are attracted to the future potential of the business and not just what the business can achieve now. In this case, value is shown by presenting convincing growth opportunities. These could be new locations for the business, other companies the business can buy out or new markets that the business can unlock. Anything which proves that the growth of the business won’t slow down or stop.
- The business is too similar to its competitors – Businesses that aren’t differentiated enough can only compete on price. The lower the price, the less cash is left over to grow the business.
- There isn’t enough free cash – Free cash is what’s left behind after working capital is spent. It’s a good measure of a business’s performance because it shows stakeholders and potential buyers how much money the business can dedicate towards growth.
- Legal issues – If you or your business are tied up in any legal disputes that could affect the business financially, there’s a slim chance of selling the business before all the legal issues are resolved.
Aurik nurtures your business for a sale
We work hand-in-hand with you to grow your business into an Asset of Value through careful analysis, focused goal-setting and sound business systems. A partnership with Aurik ensures that your business has a firm foundation from which to grow and expand.
We will collaborate with you and identify who your ideal customer is and how best to position your business so you can serve them optimally. This is supported by targeted and persistent marketing strategies and airtight business systems.
Aurik works with you to establish long-term value in your business. We want your business’s true value to show clearly in its processes, structures and operations – not in who owns it.
Would you like to have your pick of buyers when you’re ready to sell? Aurik can assist. Let us work with you to build your business into an Asset of Value and devise an effective exit strategy.
Technology is both a driver and frustration for every person and business. Every business no matter what business you are in is now a technology business. On a lighter scale, it's about emails and software programs that support your team.
In a competitive environment you need to use tech to give you an advantage and set yourself apart. You cannot avoid the use of technology. Regardless of the type of business environment you work in you must embrace and engage with technology correctly.
Every business owner should be concerned about whether they will be able to sell their business for a good return when they’re ready to put it up for sale. When the day comes for them to sell, there will be one big question on their minds – will they get the price they want for the business? So how can you ensure that your business is an Asset of Value? Only 5.4% of businesses are successfully sold, while 94.6% just close down when the time comes. No matter how invested you are, eventually you may want to move on to something else. Building your business into an Asset of Value means investing the time to strategise and, importantly, to implement the strategy. In other words, make sure that you work “on” your business and not just “in” it.
Kushesh loosely translates to “very quick” and is a fitting name for courier company Kushesh Trading, which services the distribution needs of the medical and pharmaceutical industry. Its passion and pride for the quality of service that it provides has helped it become one of the fastest-growing courier companies in South Africa.
Simply reading the news headlines can be downright distressing, and government’s lack of adequate response towards corruption can leave us feeling hopeless. As business owners and active citizens, however, it’s vital to learn and build resilience, so we can survive – and thrive beyond – the tough times. Now’s the time to build your business in new ways, but to do that you’ll need to learn to stay resilient, no matter how tough the economic environment. On this week’sThe Money Show with Bruce Whitfield, we laid out a plan for building resilience within yourself, and your business:
Play to your strengths – how the epic Mayweather-McGregor fight can take your business to the next level
Undefeated welterweight world champion Floyd Mayweather Jnr met mixed martial arts world champion Conor McGregor in Las Vegas for the bout titled “The Money Fight”. The fight surpassed the all-time pay-per-view record with 6 500 000 buys. Mayweather reportedly earned more than R4 billion from the fight and McGregor took home R1.3 billion. The winner stuck to his game while McGregor went into an area where his investment in time, training and practice were only 30% relevant.
Aurik’s CEO, Pavlo Phitidis says the fight between Floyd Mayweather and Conor McGregor has a number of lessons for small business owners. Let’s take a look at this exciting showdown and what we as entrepreneurs can take away from this.
Section 12J investment funds are an attractive option for investors. When first created during the mid-1990s as part of the Income Tax Act, Section 12J was a well-intended, but unwieldly, piece of legislation. During 2010, we gathered collaborators – including SAICA, the Banking Council, SAVCA, and more, to work on re-engineering the legislation. Eventually, amendments to Section 12J were gazetted and, nowadays, it’s hugely improved. On this week’sThe Money Show with Bruce Whitfield, we outlined the ins and outs of Section 12J and put together some guidelines for how you can spot the good, and the bad, small business venture capital investment opportunities:
We have seen a common theme emerging in our recent meetings with various entrepreneurs. As a business owner, you might be wondering how best to position yourself for the future amid South Africa’s junk status and unpredictable economy. You might be thinking about how to make the best of your business in this context, but also how you put yourself in the best position. You need your business to be a success without having to tire yourself out and being involved in the day-to-day operations. To be profitable, you must increase sales without spending more or allocating more resources. But isn’t there an easier or more efficient way of doing this than killing yourself by trying to be on top of every aspect of your business?
2017 has been a rough year, for everyone. At every level, corruption has put paid to so much, and the dismal economic growth has left us all feeling angry and frustrated. Yet somehow, small businesses in South Africa have mostly grown. Rather than pulling a Hulk smash, or simply setting your ‘Out of Office’ message on, channel the anger and frustrated energy you’re feeling into something good, that’ll pay off next year. You should have started your strategic planning for 2018 by now but, if you haven’t yet begun, we outlined a way for you pour that energy into something positive, on this week’sThe Money Show with Bruce Whitfield. Set your business up for a good year in 2018, with a strategic plan that responds to your experience of 2017. Here’s your checklist:
Welcome to the Asset of Value Series. As part of the Nedbank Business Accelerator Campaign with 702 this year, our CEO Pavlo Phitidis, had the opportunity of producing a podcast series to help successful, established entrepreneurs get to the next level. We do this by giving business owners like yourself the opportunity to share your stories and insights, and in turn, we work with you as the business owner to drive key changes necessary to accelerate your business. In the Asset of value series, we explore your journey to building your business into an Asset of Value.
Thinking and building big right from the start with an Asset of Value framework, enabled Atomic Oil to achieve a R60m valuation in only its 6th year of doing business. Being a new player in a traditional and well established industry, Atomic Oil were enabled through its agility to be able to take a different approach and establish for itself a beachhead in the market. It made use of cutting edge technology to build and establish itself and this subsequently led to the collapse of some of the traditional players business models. With the ability to out-compete the dominant players by providing a faster, more consistent, reliable service at a fraction of the competitors cost, Atomic Oil has cannibalized its competitors business, dominating the oil analysis market today in 2017.