Increase Business Value

Episode 918: Increase Business Value, with Frank Lunn

Increase business value, a podcast episode with Frank Lunn. Learn how to identify and understand the factors that increase business value.

Frank Lunn is a life-long enTREPreneur leading other enTREPreneurs & enTREPreneurial companies in the creation of a collaborative enTREPreneurial support ecosystem and helping them increase business value! Frank is a proven small business entrepreneur with a passion for maximizing resources and inspiring both individual and business growth. Currently, he is the President/CEO of Kahuna Business Group Inc., a business development company for empowering entrepreneurship.

As President of Kahuna, Frank has played a vital role in the vision, facilitation and leadership of KBGI and its client companies. His unique experience and entrepreneurial leadership has helped transform Kahuna Business Group, Inc. into a multi-million dollar enterprise.

In addition to being an expert business leader and small business entrepreneur, Lunn is a respected authority on leadership, motivation and opportunity. In his books, Frank shares his own life changing experiences providing readers with the proven tools they need to convert life challenges into opportunities for success. Lunn’s books include Stack the Logs!: Building a Success Framework to Reach Your Dreams, Carpe Aqualis! Seize the Wave, and Blessings in Adversity: Convert Challenges, Difficulties & Hardships Into Blessings & New Opportunities.

What you will learn from this episode about how to increase business value:

• Why not appropriately planning for an exit from his business ended up costing Frank millions of dollars, and how that experience sparked his current work
• Why the business valuation process was a painful and eye-opening experience, and why Frank was unprepared for the results
• How Kahuna Business Group came to be, why their focus is on helping entrepreneurs, and how the lessons Frank learned exiting his business play a part
• What Frank considers to be the drivers of a business’s value, and why some of the things that can increase business value may not be immediately obvious
• Why it is important for the business owner to not be the real driver of the value of the business
• Why having a great CFO who is willing to gently tap the brakes on your big ideas rather than slamming the emergency brake is key
• Why you should be thinking about your future goals and making decisions based around those goals
• What modern valuation tools are available to business owners, and why technology like cloud computing has created new opportunities for entrepreneurs
• Why it is important to identify and understand what is truly helping you increase business value

Resources:

• Website: https://kahunaworld.com/
• LinkedIn: www.linkedin.com/in/frank-lunn-5742648/
• LinkedIn: www.linkedin.com/company/kahuna-business-group/
• Get in touch with Frank in helping you increase business value

Additional Resources:

• Sell With Authority by Drew McLellan and Stephen Woessner: https://amzn.to/39y7x13
• Predictive ROI Free Resource Library: https://predictiveroi.com/resources/
• Stephen Woessner’s LinkedIn: www.linkedin.com/in/stephenwoessner/
• Learn how to scale and increase business value with our guest, Mike McDerment

 

 

Increase Business Value: Full Episode Transcript

 

Get ready to find your recipe for success from America’s top business owners here at Onward Nation with your host, Stephen Woessner.

 

Good morning. I’m Stephen Woessner, CEO of Predictive ROI and your host for Onward Nation, where I interview today’s top business owners so we can learn their recipe for success, how they built and how they scaled their business. In fact, my team at predictive ROI. Well, maybe you’ve been checking out PredictiveROI.com in the resources section because we are building and scaling that section.

 

So there are new ebooks on the Trojan Horse of sales and B2B podcasting and client avatar handbooks, and a variety of other resources that we think are going to be helpful. We always want your feedback. Please let us know what you think. If you just go to PredictiveROI.com/Resources, you can request whatever you like and we will send it right to your inbox.

 

Time to increase business value with Frank’s help

 

Increase Business Value: Frank Lunn’s Introduction

 

Before we welcome today’s very special guest, Frank Lunn. Let me share some additional context around why I was so very excited that Frank said yes. And first, I should say a thank you to my weekly accountability partner and great friend, Chris Prefontaine, for making this wonderful introduction so that Frank and I could get to know one another, and then also decided to have this conversation for you Onward Nation.

 

So, Chris, if you happen to be listening, thank you, my friend. Really, really appreciate it. So when Frank and I had a chance to have a pre-call interview on Onward Nation, there were some things that really stuck out to me as to, okay, this conversation is going to be really, really helpful for Onward Nation. Here’s why we’re going to talk about business valuation.

 

More specifically, we’re going to talk about strategic business valuation and how that has changed over time. We’re also going to talk about dynamic guidance accounting, what that means and why you should be paying attention to that, how that affects you and the valuation of your business Onward Nation. We all have this. You know, I don’t want to say a fanciful goal.

 

Many business owners never reach this goal of being able to sell their business. I think the insight and wisdom that Frank provides during this conversation is going to help you so that if you’re on that path of wanting to be able to sell your business and exit at some point, that the pitfalls, the warnings, the AHAs, the how to’s that Frank shares with you today is going to be super, super helpful.

 

Let me dial that in a little bit further. Well, back in 1995, Frank and some of his business partners created a company, started to build it, scale it, and enjoyed some incredible success over a span, about 1617 years. Then came a time for them to actually sell the business, get out of the market. And because of how they structured the business and how they had paid attention to financials or perhaps not enough attention to financials, they feel like they left about $4 million on the table when they did exit.

 

Now they still exited with a seven figure exit. They left $4 million on the table. Now, does that hurt? Sure. The missed opportunity absolutely. That process, that transaction lit a fire in Frank’s belly and gave him the impetus, the motivation, whatever. Where do you want to use to do what it is that he is doing today as the president and CEO of the Kahuna Business Group?

 

So Onward Nation, I think you’re going to find this conversation with Frank extremely insightful and very applicable to your goals for the future. So without further ado, welcome to Onward Nation, Frank. 

 

Time to increase business value with Frank’s help

 

Increase Business Value: Frank’s Path and Journey

 

Thank you. Stephen, and good morning, Onward Nation. This is a thrill. Oh my gosh, it is a thrill to have you here, sir, because you know, as you well know, because you work with business owners every single day.

 

This is a dream. You know, being able to sell our business one day that somebody is going to ride in with a pot full of money, you know, and that or the the pot of gold at the end of the rainbow, whatever metaphor you want to use, we’re all hoping that happens someday, but it rarely does happen.

 

And if it does happen, we’re ill prepared. And I know that is a passion of yours. Take us before we jump into a bunch of the questions that I want to throw your way. Take us behind the green curtain here. Take us, you know, into your path, your journey. Tell us a little bit more about your story, the exit, and then we’ll dive in with the questions.

 

Nice. Well, I’m really excited because I am on vacation and I’ve been so thrilled to get to know this podcast. So, I feel like I’m speaking to a lot of my brothers and sisters in a way that really it’s hard for other entrepreneurs or people who are not entrepreneurs to understand our lives and what we deal with.

 

And as we talk about exit strategies and business valuation, I want to caution the people that are like me that are really excited and excitable to not get. Don’t let your eyes glaze over, because this is really exciting in a way that you probably never thought about before. And that’s really the story that I had to learn the hard way.

 

And yes, it did cost me millions of dollars. I’m kind of kidding because I had to exaggerate that down a little bit. Because number one, I think if I really, figured out exactly how much we left on the table, it would just be traumatic and it would be hard to hard to comprehend. But in reality, I didn’t plan for an exit I wasn’t really thinking about.

 

Time to increase business value with Frank’s help

 

Increase Business Value: Focusing on Business Growth

 

I was thinking about growing the business. Like most entrepreneurs out there, we’re focused on growth. We’re focused on revenue and new clients, new opportunities. And at the time, I had a CFO and I thought, well, I’ll let him deal with these things. And that really was my first mistake because I’m not a numbers person. It’s funny because Kahuna Business Group has kahuna accounting.

 

It really is our centerpiece. And people say, oh, you’re an accountant. And I just laugh because I am not an accountant. But I realized the hard way that you can either use accounting just as compliance and reporting of how you did, or you can let it be a toolkit for you for dynamic guidance as to where you want to go.

 

And it’s no different than in sports being able to keep score. And I just didn’t really make that connection before. And I abdicated responsibility because I was focused on all the fun things, and it really cost me a lot of money. And so when we built this business, we built it up to $20 million in revenue. And, you know, mid 2000, ten or so years ago.

 

And just really thinking we were on top of the world, we were in a great space within the ATM industry and had some phenomenal clients. And it was just everything was working. But what we found out was that one of our best clients that we had grown with over the last, you know, decade or so, decided that they wanted to exit their business.

 

And what happened was when they decided they’re working with a venture capital firm, it really came to the place where if they left us, they were more than 10% of our business, and it would have created just a series of events that we weren’t prepared for. And it forced us to have to sell the business.

 

And again, it wasn’t something that I ever thought about. And that’s probably the first lesson I think entrepreneurs need to understand is you will exit your business. And for most people, the choice is either a horizontal or vertical and vertical has many more choices and many more choices and opportunities. But we will exit our business whether we’re selling it to a family or whether we’re closing it.

 

Time to increase business value with Frank’s help

 

Increase Business Value: Making an Exit Strategy

 

At some point we will have an exit. But I wasn’t thinking about that. And because I wasn’t thinking about that, I wasn’t prepared. So we went through a business valuation process and I thought, well, let’s at least make the best of a bad situation. We’ll make this, you know, hey, we’ve got great, great numbers, but it turns out we didn’t have great numbers.

 

Our numbers were sexy, but they weren’t solid. And a lot of times entrepreneurs mistake revenue and cash flow, and they don’t understand exactly, you know, profits and how it all flows together to create value. And I had to learn the hard way that as a business owner, as an entrepreneur, my value was the foundation for my wealth.

 

And apparently at the time, I didn’t realize that the value was really on shaky ground. And what happened was we went through a business valuation process and it was expensive. It was intrusive, it was very time consuming. And when it was all said and done, we were given a number that I didn’t feel was anywhere close to reflective of the value of the business.

 

And looking back on it now, it’s like a parent who has this pride in their child and no, no outside person will be able to have that same appreciation unless you document it really well. And we of course, didn’t we we didn’t know what were the creators or drivers of value in the business. It was a simple formula that was used against us in negotiation.

 

And so the worst part of this whole situation was not the low valuation. That was certainly surprising and shocking. But the worst part was we had no time to be able to do anything about it, even something as simple as being able to reduce the client concentration of one client, you know, finding some additional clients and spreading that out.

 

We had a year or 18 months or two years, we could have done a lot about that. And so it was really painful. And although, yeah, it was a seven figure exit and it was exciting and we celebrated, it really left a pit in my stomach. And as we kept it, we sold that business and kept the kahuna name, Kahuna Business Group and really decided that we wanted to be able to help other entrepreneurs.

 

And it’s kind of a joke because people always ask me with a name like Kahuna. And first of all, I’ll just explain where it came from. We started out in the merchant services industries back in 1995, and we were community merchant services, along with about 10,000 other merchant services businesses. You know, something I am BMS. Well, I was kidding with our lawyer when we started with the ATM business and I said, you know, if this ATM thing works out, it could be the big kahuna.

 

So we crossed off NewCo and that’s how Kahuna was born. And what was nice about it was we had to use that as a little bit of a brand recognition to figure out what everybody else is doing. But then we do our own thing and learn from others, but don’t necessarily follow everybody else. And being able to essentially be your own big Kahuna and that really, was born out of everybody with a name like Kahuna, everybody asking, oh, so you guys are the big kahuna.

 

And at first we’re saying, no, our clients are the big kahuna. But really, what it’s born out to be is we help entrepreneurs, mix those the two most important elements of success, which is opportunity combined with personal responsibility and that really those combination together is really what the essence of being your own big Kahuna is. And it sounds a little bit glitchy, maybe, but if you think about what I was saying before about my CFO.

 

Time to increase business value with Frank’s help

 

Increase Business Value: The Birth of Kahuna Accounting

 

So I had a great CFO. He was a good guy, and I abdicated a lot to him, just thinking, hey, I’ve got a CFO, so I don’t need to worry about that. And what I really should have done was say, hey, I’ve got a great CFO, so I need to be equipped to ask better questions. I need to be equipped to challenge some assumptions instead of following what later turned out to be more of his perspective.

 

I abdicated and it cost me a lot of money. So with the new science that’s kind of come about in the last several years of new technology, new methodologies, and then combining that with an entrepreneur focus. There are a lot of tools really to help us as CEOs, as business owners, as entrepreneurs, to essentially be our own big kahuna.

 

We have the opportunities. There are plenty of opportunities out there, and it’s so easy to get distracted. Every day is a new opportunity. But to be able to combine that with personal responsibility, that creates that combination and creates the opportunity for us to really be of service to the clients that we serve and to be successful.

 

And so that’s really where Kahuna accounting was born, was not to be any love of accounting and bookkeeping and numbers, but really to be able to say, how do we turn this into a GPS for success? How do we be able to help entrepreneurs, understand where we are right now, where we’re going, what are the waypoints, what are the options, and be able to utilize it like a heat seeking missile.

 

So we’re finding clarity. And I think that’s probably the biggest thing as entrepreneurs that sometimes we lack because we’re so caught, we’re in the forest. Or as I heard Donald Miller say, one time, we’re inside the bottle trying to read the label. It’s so true. So just looking for clarity. And then from clarity, being able to look from that clarity standpoint where we can find intentionality so we know what we’re trying to focus on and what we’re trying to achieve, and then being able to take that into a calibrated focus and then having a feedback loop that lets us continue on that.

 

So it’s no different than your GPS. Now, if you’re going from, you know, where you are to the West Coast. I mean, you could just go west and eventually hit the ocean, or you can have a more deliberate path of seeing where you are, how you want to go, and being able to look at waypoints along the way and see where you are in relation your destination, and just applying those simple things to accounting, realize realizing that that also would have helped us a lot in business valuation.

 

And that’s really what led to that next piece, which really comes into the new science of strategic business valuation. This is excellent. And I knew this would happen in this conversation, Frank, is that my mind would start racing with, you know, questions to start asking you about not not just your experience along the way, but how that also set, you know, what you’re doing today.

 

Time to increase business value with Frank’s help

 

Increase Business Value: Drivers of Value in A Business

 

Let’s go back to one of the pieces that you shared a few minutes ago as you started kind of slicing and dicing your story because you mentioned, you know, the drivers of value in a business. Let’s just break down that piece there. As far as like based on your experience, both personally, you know, in your own business as well as now working with business owners, in your opinion, what are the drivers of value inside a business?

 

That is a great question because most times we don’t think about business, we don’t think about value. We just think about the things that we see, like our revenue. Yeah. Or maybe the equity or retained earnings on the balance sheet. Sure. But there are other things that create value. And you have to think about it a little bit outside of yourself.

 

And I look at things really on two, two planes kind of an x axis and a y axis. And the y axis is, you know, the horizontal axis. And that’s really all of the extrinsic, the numbers. That’s really everything that somebody outside, if they were just wearing the, the green, accounting hats that they, you know, you see in the old days with the speckled glasses, if they were just coming in and auditing your business, they would say, this is what the value is.

 

And whether it’s, you know, how much revenue you have or your profit or your margins, anything like that. Those extrinsic factors are measurable. It pretty much is what it is. But it’s the x axis. It’s that horizontal axis to be able to look at what are some of the intrinsic things like do you have a podcast? Do you have a following?

 

Do you have a brand? Do you have a recognizable brand? Do you know who your client is? There are a whole host of things that are valuable, and you don’t necessarily know what is or is not valuable to an acquirer. And that’s a little bit challenging because unless you’re specifically looking to exit, you don’t always think about those things.

 

And yet when we think about what would make somebody want to buy my business, it may be something completely having nothing to do with your business. It may be one single client that they wanted. It may be like if Walgreens wanted to buy you, if you owned a corner store somewhere and you had a location, they may not care anything about your business.

 

Throw everything else away and just want your location. So you don’t know exactly what has value. So it’s important as a business owner to always be, seeking out what is valuable, what might be valuable, and making sure that we’re keeping track of that so that we’re not losing sight of the drivers of value. So what I look at in a business is, first of all, is it a business that is dependent on the owner?

 

And we work with a lot of professionals. We work with a lot of agency owners, and we work with a lot of lawyers and doctors. And I just heard this recently. I wish I could take credit for it, but I’m going to have to give it to Ryan Dice. You talked about the dancing bear, and the dancing bear gets paid when he dances or she dances, but when the dancing bear stops dancing, they stop getting paid.

 

Time to increase business value with Frank’s help

 

Increase Business Value: Let Your Finances Reflect Your Business

 

So just ask yourself, Onward Nation. If I stop dancing right now, what? I still get paid. And if the answer is no, then your value is diminished. Because why would somebody want to buy that or invest in that? And so that’s really a good indication. Now if you have a business and even if you are a producer in your business, but it doesn’t revolve around you, then you start to look at, okay, now there’s a foundation of value that I can build on because I have systems and policies and procedures.

 

I have a brand, I have a podcast. I have the ability to connect with an audience that’s valuable. My audience is really somebody that other people would really want to be able to have a conversation with. And those are the things that, it’s maybe hard to put a dollar sign on but, you know, intrinsically in combination with all of your other core, why access issues like profitability, like revenue growth, like, good trends.

 

All that together tells a story. And the story that you just want to ask is like, what is the genre of my story? Is it a horror story? Is it a comedy? Is it one that’s going to make you cry in a tear jerker? Or is it a Horatio Alger or Rocky type story?

 

It’s like, yes, we’ve overcome this, and now we’ve done this, and it’s an inspirational story. And Onward Nation, that’s really what we want to build. We want to build these inspirational stories and let our finances reflect that. And I say all that as a person who is an entrepreneur leading an accounting business, that again, people say, oh, you must love numbers in accounting.

 

And I laugh and say, no, I really don’t like any of that. But I love what the numbers in accounting can do to help me with dynamic guidance, to see where I’ve been, where I am, and more importantly, what I need to be able to share with my team to know where we’re going. 

 

Time to increase business value with Frank’s help

 

Increase Business Value: The Dancing Bear Analogy

 

So let’s go back to the Dancing Bear analogy for just a second, because I want to make sure that I’m tracking with you, because if an owner, is the dancing bear, then a potential acquirer is going to look differently at the valuation and potentially say, if they’re going to move forward to the transaction, potentially say, okay, instead of giving you seven figure, you know, exit I now Mr. Miss Owner am going to still acquire the business, but now it’s going to be a five year, 3 to 5 year earnout you might get a little cash upfront, but the rest of the big pot of gold is at the back end of the 3 to 5 years based on performance while you’re still in the business.

 

And oh, by the way, you’re no longer going to have the freedom as the owner, you’re now going to be my employee. Is that essentially how it would work? That is exactly how it would work. And the more that it is dependent on you, the less leverage you have or the less freedom to maneuver you have and the more.

 

And I guess it depends on how motivated you are. But if you are very motivated for a reason that’s not of your choosing, then the person who would be acquiring you has even more leverage or power over you to dance. Even maybe a little bit more. More than you previously wanted to dance. Right. And longer than you wanted to dance.

 

And so it’s a trap that’s easy to fall into. And I think it’s just it really is just good common sense. But we tend to not see it because we spend a lot of time building the business around us. And in a lot of ways, that’s the worst thing we can do. Now we may we need to start and be the spark plug for our business to get that momentum going, but then be able to find people way better than us, way more talented, way more, systematized, way more absolutely, with abilities far beyond our, meager approach that that we’re excited to be able to let shine far brighter than we shine.

 

And that is a true path to wealth versus making it all about us. So, let’s also go back to something that you were sharing, as part of the intro, when you mentioned having a CFO Onward Nation. But, you know, there were some questions that I should have been asking. I was abdicating and so forth.

 

Time to increase business value with Frank’s help

 

Increase Business Value: Understanding Each Other’s Perspectives

 

And so then my thought was, okay, that’s great. I need to ask Frank, what are the questions the business owners should be asking based on his experience there? Because that could be really, really insightful. So Frank, having to do it kind of all over again, sort of looking in the rearview mirror. And your advice to Onward Nation business owners, what questions do you think they should be asking, even if they have a super smart CFO on their team?

 

That is so important. And it’s a great question because I’ve thought about that a lot in that when my vision was, let’s say, to climb Mount Everest, okay, and climb Mount Everest, you know, it’s not going to be a or it’s not going to be a safe journey. It’s going to be exciting. There may be some mishaps, but it’s a bold and audacious goal.

 

And my CFO was not bold nor audacious. He was a good, good guy, but he had a lens that was very different from mine. So the very first thing that I really should have done is calibrate to understand what his level of tolerance and risk and other things, because as CEOs and as entrepreneurs, sometimes we need somebody that can tap the brakes for us a little bit, that can ask discerning questions in a way that doesn’t demoralize us, but that maybe helps us to have a little bit of perspective.

 

And I say that because as entrepreneurs, we are somewhat self delusional. And that is really a strength now, too much self-delusion and we may need to be institutionalized. But there has to be a little bit of self-delusion because we haven’t done it yet. And so we convince ourselves every morning we get up, I can do this.

 

And that self-delusion mixed with the reality of what we have done, what we know we can do, what we intrinsically feel we can do and must do to serve our clients, that sometimes needs to be tempered with a little bit of, you know, hey, Frank, I understand, you know, I use it maybe an Elon Musk here.

 

I understand you want to go to Mars. That’s cool. And I’m excited about that. But, you know, maybe we should think about, like, getting some supplies on the moon, and. Oh, but before we do that, why don’t we, you know, work on, you know, this other part here on earth, and I’m being I’m exaggerating quite a bit in that.

 

But sometimes what happens is we end up needing somebody who can tap the brakes, and instead we have somebody that grabs the emergency brakes and locks it up. And then we get our will together as entrepreneurs, and we fight through that, and we stop really listening to that, and it almost becomes a boy who cried wolf scenario where we tend to get very anesthetized to what should be quality feedback.

 

Time to increase business value with Frank’s help

 

Increase Business Value: The X-Traps

 

And so to answer your question a little bit more directly is what I should have done, first of all was to kind of calibrate our risks and our understanding of what our unified goal was. And if he wasn’t aligned with me, then I should have let him go and found somebody who was more aligned and qualified. Got it.

 

And then along the way is understanding that, you know, sometimes there’s different strategies. Every entrepreneur in America today is really whether they realize it or not. It’s a numerator out there. Focus on five things more. But at least these five they’re focused on growth through revenue. They’re focused on profits, cash flow value and wealth. And again there are some subcomponents that now as you’re building and you’re focused on all of that today, Onward Nation, you’re not focused on all of them at the same time necessarily or in the same proportion.

 

So you might be looking to say, I need to grow a little bit of market share. So I’m going to focus a little bit more on growth and revenue. I may be working too, maybe needing a little less profit right now because I know once I have this client base, I can do some additional things and really serve them well and then be able to increase margins or whatever that is.

 

And every business is a little bit different. But recognizing what are your targets? What are your priorities? There’s really two types of entrepreneurs that we work with, I like to call them e traps and X traps. E traps are efficiency minded. They’re building something where they’d like it to be small and profitable. They’ll let it grow as much as they want, but they really want to be profitable, to be able to create their wealth by taking money out of the business.

 

A lot of agency owners do that. A lot like lawyers and doctors. That’s how they are building their business. The other entrepreneurs, what we call X traps or, you know, exponential entrepreneurs trap is just shorthand for entrepreneur because easier to spell. But X traps want to be exponential. They want to build something of substance.

 

They’re either conquerors. You know, who are looking to build something great and then sell it, or they’re empire builders. They want to build something and then have it be, you know, multi generations and go on. And they’re looking to build a team better than them. So there’s no right or wrong. But it’s really important to know who you are.

 

And that understanding of where your wealth is going to come from. For somebody who’s making a really good living, taking money out of the business to be able to invest in other things, that’s totally fine. If that’s your strategy. For a lot of the entrepreneurs, the X traps like us, we take money out of the business to reinvest back into the business.

 

Time to increase business value with Frank’s help

 

Increase Business Value: The Value of Your Business Is the Foundation of Your Wealth

 

You know, better marketing. Again, you know, whether you’re going to start a podcast or build other marketing channels. That’s how we want to invest, is taking our gains from the business and reinvesting back into the business. So there’s no right or wrong, but it’s really important to be clear on what it is you want and who you are and what your objective is.

 

Because, again, you don’t always think about value, but the value of your business as a wealth vehicle is really the foundation of your wealth. And so if you’re not really thinking about it, then it’s hard to, I mean, it’s like somebody that would have a 401 K and really have no idea how much money they have in their 401K or what that 401K is invested in.

 

But man, I’m just going to keep putting more and more money in. That’s like the entrepreneur who’s looking to just continue to drive revenue and growth at some point. It doesn’t always make sense if you’re not really clear as to where that value is going to come from. And that’s really what got us into that new science of strategic business valuation versus that tactical thing that we were slapped in the face with love that will give us a chance to maybe chat a little bit more about the science.

 

Time to increase business value with Frank’s help

 

Increase Business Value: Tools Every Owner Must Use

 

I want to hook that into the tools because you’re here again. A few minutes ago, you mentioned that there are tools that owners, you know, should be applying. So let’s talk a little bit. I know that we’re quickly running out of time here, but let’s talk a little bit about tools and what owners should be paying attention to with respect to tools.

 

Well I think, you know, tools I like to look at are very agnostic. Because to me the mission is more important. The tool is not. Tools change all the time. And as we talk about the new science of whether it’s new science of, business strategic business valuation or even the new science of strategic business accounting, whatever that is, the tools are fairly agnostic.

 

They’re always changing. I mean, the cloud has created a lot of opportunities that just did not exist. Five 1015 years ago. So the most important thing that we want as entrepreneurs is to have some clarity. So we want to find tools, whether it’s our accounting tool and again, as accounting, an accounting company, we use multiple different, you know, whether it’s zero or QuickBooks, there are a lot of tools that don’t really matter.

 

But the tools that can be able to talk to other tools, to be able to aggregate data, to be able to create a visualization of where you are, that’s something that’s so cool that just does not exist. Again, also 3 to 5 years ago. So being able to have some dynamic guidance and again, thing is just simply like a GPS, can you plug in where you are now, whether it’s in your your business value or if it’s in just any one of those five that I talked about earlier, you know, with revenue, do you know where you are now?

 

Do you know where you want to go? Do you understand what’s going to get you there? And the tools that you use and the methods that you use are really less important than to make sure that they get you the end result that you want. And the third part that ties all that together is to make sure that it focuses on your needs as an entrepreneur, that one thing that frustrates me more than anything and it has along the way, is my advisors didn’t always tell me what I needed to know.

 

And so as entrepreneurs, I know I’m not alone. We don’t know what we don’t know. We’re ready to aim. And that’s giving us a little bit of credit sometimes, because sometimes we just fire and then we ready aim on the backside. But to have clarity of what’s possible and what, what’s important, and then to be able to focus on those, those things, whatever tools you use, that’s the most important piece.

 

And it doesn’t have to be complex. It can be very, very simple. And again, as long as you can communicate with your team properly to know where you are today and anything where you want to go and what’s that clear path to get there. And then the ability to have an iterative or ongoing positive feedback loop to make sure that you can say, hey, are we on the right, on the right track, on the right course.

 

Time to increase business value with Frank’s help

 

Increase Business Value: Monitoring The Finances and Expenses

 

I agree with you. In the last, probably 18 months, just kind of taking Onward Nation here behind the curtain, at Predictive ROI is I, as I often do, just in full transparency. We did the same thing on the financial side of our business, Frank. You know, we brought in a new finance director, Shauna.

 

And so now I have a weekly checkpoint meeting with our finance director. And we go through the numbers. We’re looking at cash flow week to week, all the way out through the end of the year. In addition to, you know, a normal balance sheet, that kind of stuff. But we’re looking at cash flow literally from week to week and managing expenses, managing income and so forth.

 

But we’re doing that looking at it not just this week, but through then the end of the year. And then she updates that budget worksheet every three days. So my business partner and I can look at that worksheet. We can also go into QuickBooks online and just look at the numbers. We have just much more visualization of the numbers of vital metrics than we ever did before.

 

And that we have felt the benefit of that upgrade. And it’s just been awesome being able to do that. So, when you’re talking about the tools I’m tracking, right with you thinking, oh my gosh. Yeah, I mean, we’ve been able to manage Predictive ROI much more effectively because we’ve done some of the things that you’re describing.

 

Nice that that’s exactly the message that resonates with me and that I want to share with our clients as well as Onward Nation. That is exactly what we want our tools to do for us. Awesome. So I know that we’re at our time, but before we go, before we close out, I mean, I feel like we’re just starting this conversation.

 

Time to increase business value with Frank’s help

 

Increase Business Value: Understanding Business Valuation

 

I can’t wait to invite you to come back for an encore, because I think we just kind of, you know, tip the iceberg here with knowledge. So but before we go, before we close out, any final advice, Frank, that you would like to share? Anything you think we might have missed? And then please tell Onward Nation business owners the best way to connect with you.

 

Absolutely. Well, I think the one part that we didn’t really touch on a lot, but I’d like to share and, I want to share, a special link with Onward Nation, but it’s related to business valuation. And again, I know that’s something that for most entrepreneurs, our eyes glaze over a little bit. But again, there’s a little bit of a new science to this.

 

And the new science really is the compensatory ability for us with new technologies. And again, it’s agnostic. So some may be better today than they are and they may change tomorrow. But those combined with new methodologies and new methodologies really have to do with what we were talking about earlier. It’s not just the numbers and the y axis, but it’s the x axis and the ability to look at things that might not seem like they would have value initially, but that really are what you want to be able to build on.

 

So adding all those things together from an entrepreneur’s perspective lets an entrepreneur understand much more effectively what business valuation is now, what drives value in their business? Because every business is different. Even if you and I had the exact same business, the geography might be different. The clientele, the niche that we’re focused in might be different. And so that’s going to create a little bit of a difference in business valuation.

 

And what that does is it lets you know good, bad or ugly where you are. So you can effectively plan for where you want to go and what it costs. I mentioned the value that we went through. The business valuation we went through was about $15,000 and it was a one and done. Although it took about six weeks and it was painful and intrusive and other things.

 

But now with this new technology, new methodologies, an entrepreneur centric approach, it’s less than a couple thousand dollars to really understand exactly what your business is worth today, what it could be worth, and what those drivers of value are specific to your industry, specific to your geography, specific to your niche. And then from there you can integrate that into your existing ongoing planning.

 

Time to increase business value with Frank’s help

 

Increase Business Value: The Business Value is a Foundation KPI

 

You’re still focused on driving revenue. You’re still focused on driving, you know, growth and profit and cash flow, but using value as really your ultimate KPI because you can’t increase your value without increasing the other things that are important to your business anyway. But that’s the secret weapon. That’s your force multiplier Onward Nation. That I would say, is worth your time to get to know whether it’s through us or anybody else.

 

Be able to really understand the entrepreneur’s perspective on value and how that is a foundation and a foundational KPI for creating wealth. And that’s the one thing I wish I would have known. Of course, what I wish I would have known back in 2000, 11 and 12, didn’t exist then. But at the same time, that’s really what drives me now to say, I wish I knew that and this is what I want our clients and entrepreneurs and Onward Nation.

 

Time to increase business value with Frank’s help

 

Increase Business Value: Final Advice from Frank

 

That’s what I want you to know. That is awesome. So thank you for that. And where can they mention Onward Nation going to a URL. What’s the URL address? It is KahunaWorld.com. Okay, Onward. And we have some special gifts for the Onward Nation and exciting to be able to share with your tribe.

 

Because your tribe is us and we resonate so much with everything that you stand for. Steven. So again, I’m so honored to be part of this podcast. I mean, I’ve been like a little kid for the last, like, week. I’m trying to modulate myself a little bit today, but it’s like everybody here knows so.

 

Well, thank you for that. And it’s just an honor to have you here. Frank. So, thank you for that. And, Onward Nation, we will include Frank’s link in the show notes for today’s episode. And no matter how many notes you took today during this conversation or how often you go back and relisten to Frank’s words of wisdom, which I sure hope that you do, because there was a ton of value in insights and wisdom in what he shared with you.

 

But the key is not to just learn from his insights, which were incredible and generous, but to take what he shared with you. Take what he shared and apply it, put it into action and accelerate your results. Because of that, Frank, we all have the same 86,400 seconds in a day. My friend. And I am so grateful that Chris Prefontaine made the introduction that you and I had that great call that you took the time out of your schedule to come on to the show today, to be our mentor and guide to help us move our businesses onward to that next level.

 

Thank you so much, Frank. Thank you, Stephen, and thank you, Onward Nation, for everything you do for this, this economy, this world and entrepreneurs make the world a better place and I’m so grateful for every entrepreneur out there doing what they do every day. 

 

This episode is complete. So head over to OnwardNation.com for show notes and more food to fuel your ambition. Continue to find your recipe for success here at Onward Nation.

 

Time to increase business value with Frank’s help