The document provides 6 tips for entrepreneurs to avoid valuation traps and develop an accurate 20/20 value vision for their business. The two most prevalent flaws are perceptual fixation, where opportunities and threats are misjudged, and perceptual weakness, where key value drivers are missed. The tips recommend building an agile organization, stitching together a bundle of value drivers to create barriers, anchoring value elements, finding complementary puzzle pieces in other businesses, considering changing market conditions, and understanding where true control lies. Developing a full strategic growth plan can help entrepreneurs identify their accurate business value.

1. As An
Entrepreneur,
Do I Have a
20/20
Value Vision?
SIX UNCOMMON COMMON-SENSE TIPS
TO AVOID THE VALUATION TRAP
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2. Why do I need a 20/20 Value Vision?
Value is the indicator
of the future of your
business! Value of the
An entrepreneur often spends
overwhelming amount of time
Enterprise
addressing the “tactical level”
of business – driving Revenue
growth, controlling Costs,
growing/preserving Net Assets, Business
and finalizing contractual Structure Strategic
relationships . But that secures Business Model
and Relationships
only the present! Control
It is only when one pays
attention to the “strategy level”
of the business model, the
structure, and the strategic Tangible,
relationships that one creates a Intangible Contractual
“sustainable growing Revenue Costs and Commercial
enterprise” that is valuable. Human Relationships
Assets
© 2012 - 2013 BUSINESS ANALYTIX 2

3. Value is in the eyes of the beholder … indeed!
2 MOST PREVALENT FLAWS IN
THE VALUE VISION
⧉ Perceptual Fixation creates a
Value bubble
⧉ Perceptual Shortness shrinks
the Value down
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BUSINESS ANALYTIX 3

4. Perceptual Fixation
• Ignoring the hurdles in and the threats
to the growth path
• Overstating the potential
opportunities; assuming the growth as
a constant in the business equation
• Generally, influenced by the
economic climate – but, at times,
result of emotional attachments
THE ADJECTIVE related to the pride of ownership or a
“POTENTIAL “ few times … due to greed
APPLIES TO • Commonly known, yet difficult to
OPPORTUNITIES overcome; magnifying the value of
AND THREATS the “potential”; triggers the “Synergy
ALIKE!!! Dreams” in the case of acquisitions!
© 2012 - 2013 BUSINESS ANALYTIX 4

5. Tip #1: How to Fix the Perceptual Fixation?
Whatever your end-game is:
• Recognize that the nature
of the beast is “volatile and
dynamic”
• Build an agile organization
• Protect valuable assets –
physical, tangible,
intangible, virtual, and
human – Create Value
Anchors and Barriers
© 2012 - 2013 BUSINESS ANALYTIX 5

6. The bigger trap, however,
is in the hazardous “I don’t THE PERCEPTUAL
Know What I Don’t Know” WEAKNESS
zone …
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7. Perceptual Weakness
• A failure to identify value drivers within
your enterprise
• Could be consequence of
– Being too close to the business
– Being unaware of the market trends
– Burden of the present day pressures
– Inability to view the business not just as a single
entity but as a Dynamic Bundle of Values
• Results in missed opportunities and lost
Value
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8. Tip # 2: Overcoming Perceptual Weakness –
Stitch together a Value Bundle and create a
Value Barrier
There is much more to the
Value of your enterprise than
the assets shown on your
balance sheet
Proprietary Systems and
Processes
Unique Service Concepts
Trade Secrets
Exclusive Licenses
Assembled Workforce
When you stitch together a bundle of value drivers, it creates a value
barrier that makes your business sustainable
© 2012 - 2013 BUSINESS ANALYTIX 8

9. Tip #3: Overcoming Perceptual Weakness
Create Value Anchors
Having a value driver that is not
firmly anchored leaves the future of
your enterprise at the mercy of the
vagaries of the high and low tides
of fate!
Ex. Negotiating a contract without
a carefully drafted exclusivity,
termination conditions, and ‘tails’
can mean that today’s boon may
well turn out to be a bane
tomorrow.
© 2012 - 2013 BUSINESS ANALYTIX 9

10. Tip #4: Overcoming Perceptual Weakness
Look for the Right Puzzle!!!
Some elements of
your Value Bundle
might be the
missing parts of
someone else’s
jigsaw puzzle.
Helping them
complete their
puzzle might
create more
value than trying
to finish your
puzzle!
© 2012 - 2013 BUSINESS ANALYTIX 10

11. Tip #5 : Overcoming Perceptual Weakness
Be Aware of the Impact of the Changing Times
• Value is never
static
• How will the
Value of your
Value Elements
and Bundle
change with time
or the
environment?
• Is this the right
time?
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12. Tip #6 : Overcoming Perceptual Weakness
Locate the Control Locus
The Control Value
Value also depends on how big is the portion of
pie you control … and sometimes you can control
without owning majority
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13. © 2012 - 2013 BUSINESS ANALYTIX 13

14. Let us talk about it …
We will be happy
to offer a
preliminary scan
of your Value
Strategy and
offer a Growth
Strategy Outline
Report as a time-
limited
assignment …
… for the cost
that is probably
less than your
one month office
rent!
© 2012 - 2013 BUSINESS ANALYTIX 14