On the same day last week, I finalized the transfer of Focal Point to my ownership, almost 17 years after I first started working for the family business, and social media company Facebook had a tremendously bad day in the stock market. They lost 20% of their stock price, which amounts to somewhere in the neighborhood of 100 BILLION dollars. 

The connection between both of these events is the concept of company valuation. In the case of Facebook, their stock price was responding to some very real circumstances in their current and future outlook- but it's all sort of a joke, because there was no real chance that anyone was going to swoop in and buy the entire company for 500 billion dollars. On the other hand, part of buying/selling a small business like mine and yours is the very real and complicated process of assigning a value to the company. I'm happy to say my experience in this regard went very smoothly, but putting a dollar figure on the value of a company is no exact science.

But I realized that "value" is actually more of a day-to-day issue than figuring out a sale price. What I mean is this: we always need to be looking for ways to add to the value of our companies, even if we have no intentions of selling. 

This type of value takes many forms. One baseline value marker is profitability and retained earnings. We hear about huge companies like Amazon operating at a loss for years and years - but that's not you and me. We need to seek sustained profitability, and set a goal for cash reserves. History tells us that we are probably due for another recession of some sort, and having retained earnings in the form of cash reserves will provide a cushion in times of uncertainty. 

Consider also the value of your client base. Most of us recognize that our clients are a huge asset, but most of us also recognize that we could and should do more to develop and enhance our relationships with our clients. Doing so will add to the value of your company. The same goes for your employees. A motivated staff is one of the most valuable assets a company can have. Look for ways to build into your team members and you will, without question, increase the value of your company.