Lesson 14 - What's In A Handshake?

by Melvin Murphy

The Story

As a child growing up, one of the many life lessons instilled in me was to wash your hands before eating and after using the restroom. As a child I often played in the dirt and places where germs customarily manifested. Another lesson I learned growing up was when introduced to new acquaintances always shake their hands. It is said to be a polite thing to do, and demonstrates a sign of friendly reception.

I can’t remember the first time I shook someone’s hand, but as an adult I have learned the different handshakes I detest and those I most appreciate. It is frequently said that the handshake is a window into the personality. For example, on the phenomenal television show “Survivor” during the last episode the tribal council selects the winner of the contest. Before the vote, seven remaining tribal members were given an opportunity to ask a question or make a statement to the remaining first and second place contestants.

In the heat of anger one tribal member named Susan verbally lashed out at Kelly who had the deciding vote to cast her from the contest. Susan’s anger stemmed from an alliance that was broken as Rudy, Richard, and Kelly (the last three members) began to fend for themselves as the contest came to its season finale. But after the winner was chosen, the seven tribal members went to give their congratulatory hugs and handshakes. Of course Susan went over to shake hands with Kelly for placing second. While 40 million viewers watched, Kelly refused to shake Susan’s hand. So what’s in a handshake?

Dr. Wade Horn, President of the National Fatherhood Initiative said, “The handshake establishes contact; it sends a message. If I am having an important meeting the handshake will tell me if the meeting was successful.” Dr. Horn went on to explain further that, “If there is a firm, tight, and strong grip at the end of the meeting then the meeting was successful. If not, then that person is disappointed and not pleased with some aspect of the meeting.” He closed by saying “When someone shakes my hand and doesn’t let go then that’s too personal.”

But what does that say about billionaire and former presidential candidate Donald Trump? Mr. Trump, who does not like to shake hands, was met with some controversy when refusing to shake hands on the 2000 presidential campaign trail. The New Republic reported that Donald Trump is “A germ freak. Trump has said he doesn’t want to touch the diseased masses. His campaign hands out half-ounce bottles of hand-cleaner, with Trump’s web-site address taped to the necks.”

Evan Burfield, co-founder and Chief Strategy Officer for the Netdecide Corporation, said “It’s like driving on the highway. People do things that are so uncivilized, things that you they would never do in person. It’s the same way in a corporation; there’s a protective layer that a handshake removes for a second. It lets you understand that you are talking with another person who needs to be treated like a person with trust, respect, and forthrightness.”

Evan added that, “Today we are operating in a cross-gender environment. That man-to-man power struggle handshake doesn’t work with women. It’s a positive to have women involved with everything we do; it softens a lot of the male aggressive rituals.” And speaking of rituals, the handshake has origins more anthropological than historical. Because they carried knives, spears, and rocks, when land was scarce and sacred males would extend their hand to show that they were not attempting to kill their neighbor. To add to that, the classical Greeks were under the impression that the right hands were mysteriously connected to the heart.

The Greeks may not have been very far off point. The handshake is a symbol equivalent of a promise. It becomes a virtue of the word and value of the person extending it. It is an agreement sealed with honor before the lawyers get involved. The handshake is a very valuable tool and, since in business often the communication is one-to-one, it’s flexible and indicates that an agreement has been reached on current dealings. It says that all information and intentions have been disclosed so that the value of the handshake is not diminished. The lesson here is that the handshake historically has carried symbolic importance. It is good to know what your handshake is worth. It’s your word and it says you can deliver on your promises.

Kevin Robertson, president of Vision of Life consulting firm said it best—“Today a man or woman is judged on their handshake, eye contact, and the display of confidence.” This is a far cry from the classical Greeks, or prehistoric man who when all they had to worry about being stabbed or hit with a rock. There were no lawyers and no contracts, just the bond of a man’s word.

The Lesson

What’s in a handshake? The handshake encompasses trust, honor, and communications, follow through and follow up, and represent good faith negotiations. After all, the word of a man and woman still lies in the bond that they will ultimately create.

Melvin E. Murphy is a Consummate Speaker, Noted Author & Certified Seminar Leader Mr. Murphy provides keynote speeches and seminars to educational institutions, civic groups, public associations, and corporations throughout the country. To contact him Email: mmurphy833@aol.com or to order his book It's Who You Know! go to: partnershipsolutions.net

Article Source: Lesson 14 - What's In A Handshake?

Strategies for Successful Business Networking.

by Stephen Labuda
Networking is a popular buzzword these days. Every blogger seems to be talking about networking, Buzz Marketing and Word of Mouth Marketing. However, not many of them seem to be presenting specific strategies for making the most of local networking groups. This is why I decided to write this article.

There are a variety of organizations that run networking groups across the country. The largest group is probably BNI, which offers members the chance to attend weekly meetings and develop
new professional relationships to help them grow their business. some chambers of commerce are now organizing "leads groups" for their members as well. These groups are intended to offer
members a way to connect with each other and potentially refer each other business.

In most "leads groups" each group allows no more then one representative from any industry, so if the group has a mortgage broker other mortgage brokers have to join another group or wait
for the seat to open up. The idea is that by restricting membership, you eliminate competition within the group.

The agenda at most structured networking meetings is pretty straightforward. Each member is given an opportunity to introduce themselves, then there is a short presentation by one or two members (each member gets the chance eventually). The meeting ends with members discussing potential referrals for each other. This means that most of the members get about one
minute to present who they are and teach the other members of the group how to refer to them.

Most people do a great job of presenting themselves. However, most people do not think to ask for referrals. At most networking events, you are not expected to ask for a referral or explain what a good referral for you is. However, at a leads group it is not only acceptable, it is expected!

I am involved in a number of networking groups and have used the simple outline below to create my elevator pitch (quick introduction). When I deliver my elevator pitch to a leads group, my goal is to educate everyone in the room about my company and what I do, as well as to teach them the best way to refer others to me. In addition, I want to make sure I actually ask for a specific referral. I will go through each piece of the outline in detail, but here are the basics.

* Introduction o Name o Position + company name o Location of the company o Overview of services * Tell a story * Call to action

The introduction piece of your presentation should stay the same every time you give it. You might say something like, "My name is Joe Smith. I am mortgage broker at ABC mortgages in Anytown, USA. We offer a full line of residential and commercial mortgage products." You can add some additional detail, but you should really focus on keeping this short and on point.

At each meeting, you will have the chance to differentiate yourself from the competition by telling a short story during your presentation. The story can be related to a specific challenge you helped a client overcome, a unique feature of your product or service, or you can simply talk about a new development at your company. Consider writing out your stories in advance so you know what you are going to say at each meeting. In addition, you can schedule the content so that the other members of your group learn more and more about you at each meeting. You need to focus on educating your group a little more each week.

The "call to action" is very important and the piece that most people overlook. You need to tell the other members of your group exactly what type of referral you are looking for. For example, our mortgage broker, Joe Smith, might say, "Today a good referral for me would be a Realtor at XYZ real estate company." Joe may also say, "Today a good referral for me would be anyone who purchased their home more then 10 years ago."

I alway recommend that your "call to action" is as specific as possible. If Joe stands up and says that a good referral would be anyone who needs a mortgage, the rest of the group will have a harder time thinking of people to refer. If Joe asks for an introduction to a specific person at a specific company, someone in the group may know that person or know someone at that company who can facilitate Joe's introduction. The more specific the request, the more likely it is to trigger someone else in the group's memory.

A last minute hint:

Keep focused on the networks of the people in the group, not on the people themselves. In other words, when you are participating in a networking or leads group, you should not focus on gaining the business of the people at the table. Instead, you should focus on gaining their trust so that they will refer you people in their network.

Article Source: Strategies for Successful Business Networking.

Tips for Home Based Business Success

Author: Will Jalbert
If you own your own business you probably already know how much of a rewarding experience it can be. If you do not already own your own business you should consider creating one. It does not matter if you are going to be doing it as a full time job as your only income or if you are doing it as a part time, small home-based business to add to your income, you will experience the joy of having freedom that few other jobs can give you. However, few people are actually able to be successful with their small business ventures to be able to enjoy the freedom. If you are one of those people who are having trouble with their home based business here are some tips to help you out.

One of the best things you can do to have a successful home-based business is to have a business plan. You need to treat it like an actual business. Sit down and write out an outline of a plan. Fill out details of your business and then where you want to be in the future. By writing down goals and reading them everyday you will train yourself to want to accomplish those goals and you usually will.

If you are just starting your home based business and have never done anything like this before, you need to find a mentor. If you have someone who is experienced in business that will be able to help you, they can guide you in the right path. Rather than having to forge your own trail they can show you their trail and you can change little details to adjust to your business. With a business mentor and a business plan you should be able to gain success in your business.

The most important thing in any aspect of life is having the desire to succeed. You need to have the desire to work long and hard hours. You may think that owning your own home based business gives you the ability to work when you want, which you are able to do, but you will succeed most when you work set hours. Make sure that every part of your business and mind set are pointing you towards success.

It will probably take you some time to find success in your own home based business, but if you follow the three tips listed above you should be able to help yourself find the success faster. With a determined mindset, a business plan and goals, and a business mentor to point you in the right direction, you should have no problem creating your home business.

Article Source: http://www.articlesbase.com/business-opportunities-articles/tips-for-home-based-business-success-397733.html
About the Author:Would you like to have a real web site business? Wilfred Joseph Jalbert Jr invites you to visit his home business website for everything you need to start and run your own online business. His services include advertising, mentoring, and a full service training and support package to help guarantee your success. Learn more here: http://AchieveFinancialBliss.info

Internet Business Opportunity: Bait – Hook Campaign!

by Benny
There are so many alluring Internet business opportunities that makes the people run after it. But pursuer soon realizes that the so-called Internet business opportunity was not the piece of cake the hype made it out to be. There are many Internet business opportunities that are created with an aim only to trap the weaklings in their alluring web and extract every drop of their hard earned income and transfer the revenue to their pockets and accounts just as the spider preys on the insects. The con artists are always looking for an easy ride at your expense.

If you nibble, them they will victimize you further with their promises of freedom, esteem, high income and the good life. They will also set you up with a company-sponsored, duplicate Website, along with products or services to sell for a certain amount. Some Internet business opportunity business scam will also offer you bonuses to enroll others to pay the fee, which is really what these so-called opportunities are all about. Often, it has been found that after the people buy these dot-cons have requested their friends, relatives, neighbors, church co members and everybody else they know but they soon realize what these so-called Internet business opportunity are.

So be aware of the many Internet business opportunity potholes that seems to be real round for business but in reality they are covered with dry leaves, twigs and grasses if stepped on it mistakenly will fall into it bruise yourself and take time to recover from it. For instance multilevel marketing or you can take exact method marketing are all just a guise for an old scheme. The scammers employ some form of pyramiding to resell the scheme itself, some by exploiting weakness in the law to enroll through a backdoor, others by breaching the law until they are dilapidated.

If the service phase fails the different victim acts differently. Some is left to recoup their investments or make what little money they can by duping others into paying the fee in the same manner as they were duped. But it will take a lot of dishonest network marketing. Whereas those with a moral sense usually surrender at this point and learn from their loses. Get yourself equipped with sufficient knowledge to save yourself from being duped. The URLs they provide are one of the clues that they are the members of duped cultist attempting to dupe others into an Internet business opportunity scam.

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Online Surveys - a Way to Earn Extra Income

Author: Bryan Hufford
Getting paid for online surveys isn't a myth. In fact, it's far from it! Nowadays, there are hundreds, if not thousands of companies who are looking to pay people for their opinions. Why are they doing this? The answer is simple: They feel that by offering compensation of some sort, they will get a bigger and more accurate response from the participants willing to take their surveys. That doesn't sound like a bad deal, does it?

So what exactly are survey companies looking for? The question here really is what are they not looking for! Survey companies need people from all walks of life to find out their opinions on anything from products, services, T.V. shows, movies, life, buying patterns and more. These surveys help the business/company find out all sorts of things about their market, as well as helping pinpoint the consumers needs and behavior patterns. Surveys actually influence many business decisions.

Many survey companies out there have you fill out profiles. This is to help them in selecting you for certain surveys. Why do they select certain people for certain surveys? Well, if you had a dog and a survey about dog food needed people to participate, you would be a great fit for that survey. If you don't have a dog and took that survey, the response would be inaccurate. The survey companies are looking for accurate and truthful responses, not false ones, which is why you fill out the profiles.

While the subject of making big money with online surveys is spread out all over internet, the truth is, you will most likely not be able to earn a modest living filling out surveys. You could pull in a great deal of income by referring other people , but this more or less falls into affiliate marketing and is another subject in itself. While you may not get rich, participating in online surveys can bring in a realistic $100-$200 per month of extra income. You'll need to join quite a few companies to bring in that much, but it's an easy $100-$200 to earn.

My website has several legitimate surveys companies listed that you can join up with today at www.workathomecompanies.net/surveys.html . Every company listed gives out frequent surveys, based on your user profiles. I encourage you to join up with all the companies listed, as they are some of the highest paying companies around.

Article Source: http://www.articlesbase.com/business-opportunities-articles/online-surveys-a-way-to-earn-extra-income-398878.html
About the Author:Bryan Hufford is a former corporate slave turned online entrepreneur. He has successfully launched several businesses online, working directly from home. Find out how you can start working at home and join his newsletter about earning extra income online at his website www.workathomecompanies.net .

How to Protect Your Small Business in a Volatile Stock Market

by Susan Canyon
When stock prices move erratically, economic indicators weaken, or housing prices fall, small business owners get nervous. As a result we experience many sleepless nights because we have no idea what tomorrow will bring in terms of orders, or more importantly, payment for our goods and services.

We begin to believe that our best customers, who get behind in their payments to us, might fall further behind than they'll admit. We wonder whether their promises to pay are empty. And, we worry about meeting payroll in the coming weeks.

What does that mean for the average small business owner?

On the surface, it usually means we must hunker down as if the business has just seen its last sale. On a deeper level, many small businesses (dare I say, most?) are, even in good times, barely getting by.

The truth is, small businesses tend to be at the bottom of the economic food chain. Therefore, when the economy slips ever so slightly, it swallows many good businesses that were thriving months earlier. And then, in a chain reaction, vendor after customer after vendor fails.

But a small business can ride out a downturn more easily if it practices a few time-tested strategies that will strengthen any business, in good times or bad.

5 Proven Strategies to Help You Protect and Grow Your Business during an Economic Downturn

1) Don't buy more raw materials inventory than you need.
In fact, reducing your inventory stores is an excellent strategy in any economic condition.
Return inventory that you don't need. Sell, for less than you paid if necessary, any inventory that you don't need and can't return. Cash in the bank is more useful than worthless parts taking up space in your facility.

2) Eliminate obsolete finished-goods inventory that won't sell for what it cost you to produce.
Some owners think that dealing with obsolete inventory takes valuable time away from their business operations. On the contrary, keeping obsolete inventory is a huge waste. If it is truly obsolete, then its value is not what it cost you. Its value is $0. When your CPA discovers that your inventory is obsolete, he has an obligation to write it off, which may hit your bottom line hard.
While its value is zero, you may think that it doesn't cost you anything just sitting there in the warehouse. But it's actually costing you big! It wastes precious warehouse space and utilities. It wastes time for your workers to move around it. And it costs to count it at physical inventory time.
Reduce the extent of the write-off and the worker inefficiency by continuously selling off inventory that becomes obsolete. You will get quick cash, free up your warehouse space, and take less of a hit at inventory-counting time.

3) Don't build up finished-goods inventory.
One of the biggest mistakes that small business owners make is to ‘get ready for more sales' by continuing to manufacture, at the same high rate, product for sale when it is selling more slowly. This mistake is a cash flow sponge that can soak up all of your cash reserves at a time when you need them the most.

4) Don't try to ride it out with your employees.
When your labor force runs out of work, send them home early. Give them their choice of two days off in the next month, without pay. When you trim your labor base early in a downturn, it is more likely that your employees will be able to find other work. Your business will remain stronger, and may be able to rehire them sooner. You must remain as efficient as possible to protect your family and be able to provide for the families of the workers whom you retain.

5) Send outdated invoices that your customers won't pay, to a collection agency.
Getting half now is better than nothing later when your customers have filed for protection. Audit your receivables. Make sure that all of your customers have each invoice they owe you and that your collections department has some leeway to aggressively collect your money. The further down that a shaky economy takes us, the more difficult it is to collect.

The best part is that once you've ridden out a downturn and become accustomed to these management behaviors, you can continue to do business this way, and you'll see higher profits when times are good.

About the Author :Sue Canyon is a leading small business analyst and advisor who can protect and grow your business by unlocking management mysteries that plague small business owners during times of economic uncertainty. Now, with Sue's FREE "Quick Starter for Cash Flow" 5-day mini e-course, you can discover more ways to release cash that's literally hidden within your business. Get it now at: http://www.businessbooming.com
Article Source: http://www.articlegarden.com

Excellent Home Based Christian Business Opportunities

Author: Francis Hirak
There is a lot of good Christian business opportunities for us to take advantage of if we know what we are looking for. By starting a Christian home based internet business you will find that it is an excellent way for spreading the word by means of using the internet as a vehicle to get the word out to many.

As a result of using the internet as a tool, we now have this great opportunity to reach out to millions of people in all places and start wining them over to Gods perfect love. In this article, we are going to share some information on Christian business opportunities. You will discover that there are excellent “work at home” business ideas to start a home based business.

The best way for those of you who are looking for a work at home business idea and want to make an income on the internet is to locate tutorials with quality information that will guide you through to having your very own successful business. Reading quality tutorials to get a good understanding of how to start your business, is your foundation to the road of success.

If it is your desire to have a successful business you must be willing to read and learn plus put some effort into it. By applying effort and taking in knowledge, you will discover that it is a lot easier to come up with a good business plan, rather than to not have knowledge and hope that every thing will just fall into place. It just doesn’t work that way.

Have you ever come across sites that have these get rich quick programs that will tell you everything will fall right in to place? They say you are going to make a numerous amount of money over night. They even go as far as to say you don’t need any knowledge or understanding of how to start a home based business and they’re going to take care of every thing for you. The truth is, the only one that they’re going to take care of is their self and at the same time they’re getting rich by misleading you.

Do not let yourself be misled by the marketing sites that say you can get rich over night. The fact is you can make money online and make a good living by means of the internet, but it is not going to be over night. It is going to take some time and patience to start a successful business and you have to be willing to work at it.

The internet is the best place that anyone can start a home based business in the world to day at a very low cost and at the same time make a good living at it. It is just the right time to start one. Ecommerce is like a young strong oak tree still in it‘s prime. It just keeps growing stronger and larger, and if you want to grow with it, then now is the time to jump on and grow. Ecommerce is a great way to make money online and there is plenty of it to make.

If you’re looking for ideas on how to start a Christian home based internet business and be successful, then here are some excellent ideas. If these don’t appeal to you, I am sure they will spark some ideas for starting your own Christian business.

Start a Christian bookstore. An online bookstore is a great way to make money and the best part about having a bookstore is having a business that you feel good about knowing that the products you are selling are helping people in their spiritual lives, not to mention spreading the word which is another bonus.

Make money online with affiliate programs through starting your own affiliate web site by joining some good affiliate programs. A great number of people find that when they start an internet business, starting out with an affiliate web site and joining affiliate programs is the less expensive way to start. At the same time, they have an excellent opportunity to take in knowledge of how marketing works.

Start an online store using a drop ship supplier. Ecommerce is growing larger and larger as each year goes by. All you would need is a wholesale supplier who will drop ship products that you want to sell in your internet store, a low cost web site and a merchant account.

Start your own online auction. If you are into auctions and want to make money on EBay or thinking about starting an online career as an auction seller then you will find that Ebay is the place for you. There are over 1.3 million people making an income selling on Ebay full or part time. There are billions made on EBay every year.

As you can see, there are Christian business opportunities out there for anyone who wants to start a work from home business. All you have to do is use your imagination, put forth some effort and watch your dreams come true.
Article Source: http://www.articlesbase.com/business-opportunities-articles/excellent-home-based-christian-business-opportunities-400579.html

About the Author:To find high-quality, Christian home based business opportunities and ideas AND to spread the Word of God while working from home, check out our free educational tutorials at http://www.christianideas.net for Legitimate home based business.

The Seven Benefits of Annual Business Valuations for Family Businesses

by Robert M. Clinger III
Most owners of privately-held businesses believe that they know what their company is worth. As they have worked to build the business, often from the ground up, they feel that their intuitive value conclusions accurately reflect the fair market value of the firm. In many cases, these business owners are biased in their views towards the firm, and therefore, have an inflated sense of value associated with the business. Though a business owner has their own opinion as to what the business is worth, their value may differ substantially from the value that could be realized in an arms length transaction between a willing buyer and a willing seller. Without a formal valuation of the company, the business owner often has nothing other than a gut feeling to support the value that they attach to the business.

Many business owners are reluctant to hire an independent valuation professional to conduct an initial valuation of the company (let alone an annual valuation) if they do not perceive the need for one. In many cases, there is little perceived need for the owner of a very small business to have a valuation performed, unless of course the owner plans to leave the business to children, needs a loan from a bank when the company's assets alone cannot support the loan, or seeks to sell all or part of the business. These business owners often are individuals who have started or acquired a "lifestyle" business-a business that provides the owner with a job and enables the owner to maintain their desired lifestyle. The lifestyle business could be thought of as a hobby for the business owner-a hobby that earns the owner money.

As compared to a lifestyle firm, some entrepreneurs seek to establish a transgenerational enterprise-a firm that is skillfully managed to create long-term value and wealth for successive generations. These firms typically exhibit the same seven characteristics of successful transgenerational enterprises-a compelling vision, professionalized management team, a long-term ownership plan/strategy, effective communication, good corporate governance, a clear succession plan, and a comprehensive strategic plan. As a result of the need to ensure and evaluate successful creation of transgenerational wealth, many privately-held and family-owned businesses, particularly those that have survived multiple generational transfers, have instituted a policy of having an independent business appraiser/financial analyst conduct an annual valuation of the firm.

Many firms of various sizes and different phases of the corporate life cycle have recognized the benefits of having an annual valuation conducted. The most commonly cited benefits of an annual valuation policy include the following:
• Accountability and Performance-An annual valuation of a privately-held firm enables the shareholders to see the value that is being consistently created or destroyed by the management of the firm in its execution of the corporate strategic plan. Over time, if the executive management of the firm consistently fails to create value through the increase in the estimated fair market value of the company's shares, the shareholders may seek to replace the management team with a group more capable of executing the strategy and creating value for the shareholders. In addition, an annual valuation may enable the shareholders to identify the need for substantial change to the strategic plan if that plan consistently fails to create the level of value anticipated. Overall, the annual valuation promotes accountability and provides clear performance measurement.

• Estate Planning Purposes-Many shareholders in privately-held transgenerational enterprises have on-going estate planning strategies aimed at protecting wealth for heirs. As part of an estate plan, a shareholder may periodically place shares into a family limited partnership whose shares are then gifted to the shareholder's children. A shareholder may also make gifts of shares to the children each year for tax purposes. In order to facilitate this, an annual valuation of the privately-held enterprise provides the shareholders with part of the data necessary for these estate planning purposes.

• Buy-sell agreements-In multi-shareholder firms, a buy-sell agreement is an effective and practical means of establishing how the buyout of other shareholders will be conducted. Though many buy-sell agreements have a defined method or process for establishing the value of the firm's shares, an annual valuation sets a clear precedent for the methodology used to establish the value of the shares. For those firms that do not have buy-sell agreements in place, annual valuations are a good way of avoiding (or at least, tempering) disputes that may arise when a shareholder seeks to sell his shares to the other shareholders. Whereas one time valuations can be open to criticism of bias in favor of one party or the other, an annual valuation tends to limit this accusation as the methodology has been applied consistently in previous years.

• Promotes Effective Communication-An annual valuation of a privately-held firm is an effective means of communicating value creation between the executive management, board of directors, and the shareholders of the firm. The valuation may be the catalyst for open discussion between the management and the shareholders on issues related to the strategic plan, succession plan, financial objectives, return expectations, etc. In addition, an annual valuation is a good way for the management and board of directors of the company to provide value-added services for the shareholders. This in turn can foster the creation of goodwill between the management of the firm and the shareholders, which may ultimately lower the firm's overall cost of capital. The lower cost of capital may enable the firm to invest in value-creating projects that create long-term wealth for shareholders-projects that may have been overlooked in the past as a result of a higher cost of capital.

• Facilitate Banking-Many privately-held firms effectively utilize leverage to invest in value-creating projects. Often times, this leverage may exceed the credit available based on the firm's fixed assets alone. In some cases, the financial institution may be willing to lend against the company's goodwill, which is identified in the process of a formal valuation. The ability, then, of a privately-held firm to borrow based on the value of the goodwill or the value of the company's shares may expand the universe of value-creating investment options available to the firm. In addition, the annual valuation may establish a track record of value creation which could be used to facilitate a recapitalization of the firm, enabling management to further seek value-creating projects, distribute funds to the shareholders via special dividends, etc.

• Expands the Investment Options-Privately-held firms, unlike publicly-traded counterparts, suffer from a lack of liquidity and the inability to use the company's shares as currency when seeking acquisitions or mergers. An annual valuation that clearly establishes a trend in value creation may enable the management of the company to use the shares as acquisition currency for another privately-held company. The annual valuation is also beneficial in the shareholders' investment decision making process with respect to maintaining the status of the company or seeking liquidity through a merger or sale of the company. The history of annual valuations may provide the shareholders with a foundation for negotiation of more favorable deal terms.

• Cost Benefit-Annual valuations may also provide the company with cost benefits as compared to one-off valuations performed every few years. Many valuation firms charge reduced fees for the annual update to a valuation as part of an ongoing valuation process for a privately-held business. For example, suppose that Triumvirate Industries, a privately-held company with $25 million in annual revenues, chooses to have a valuation performed once every five years. The valuation firm's fee is set at $20,000 per valuation. However, suppose that Triumvirate Industries has an annual valuation conducted. Whereas the initial valuation fee may be $20,000, the subsequent annual updates are $14,000. While the fee structure varies by firm and by project, annual valuation updates typically carry a lower cost than one-off valuations.

As can be seen from the previous discussion, there are a number of benefits associated with a privately-held firm instituting an annual valuation policy. While this is most typical with large, transgenerational enterprises, privately-held firms of all sizes may derive some benefit from annual valuations-whether it relates to financing purposes, estate planning, or the enlightenment of the owners in how they are creating value within their firm. Those firms that have been most successful in creating long-term shareholder value and transgenerational wealth have exhibited seven common characteristics, as previously discussed. Those firms that have instituted annual valuation policies have likely added value to the firm from one of the previous seven benefits. In the end, the best way of measuring the value that management has created for the shareholders of a privately-held business, particularly a transgenerational enterprise, is through annual valuations conducted by an independent valuation professional.

Robert M. Clinger III has strong experience in the fields of business valuation and financial analysis, having earned the Accredited Valuation Analyst (AVA) designation from the NACVA and the Certified Business Appraiser (CBA) from the Institute fo Business Appraisers. More information on business valuations/appraisals may be obtained by visiting Highland Global’s website http://www.HighlandGlobal.com .
Article Source: http://www.articlegarden.com