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    • Shaking the Bode Tree: Everything you wanted to know about business valuation but were afraid to ask

      Valuation
      Many business owners assume they should only care about how much their business is worth if they’re looking to sell or are going through a difficult situation, such as a divorce or corporate break-up. Unfortunately, this is an extremely short-sighted view that misses the bigger picture.

      Valuation is the most important concept in finance, and something that every business owner should know something about. At the end of the day, each of us is in business to create value. Your company’s value captures nearly everything about your business in one, easy-to-understand number.

      Valuation has a reputation for being boring, abstract, and complex…and to be honest, it tends to be. But fear not, I’ve boiled it down to three key concepts that make it easy.

      1. Valuation Methodology
      2. Common Pitfalls
      3. Value-Based Management

      Valuation Methodology

      We’ll start with a simple definition – valuation is the price that a reasonable person would pay to own the future cash flows of a business less any debt owed plus all

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    • How a 15-year-old entrepreneur got her product into Nordstrom

      Fish Flops founder Madison Robinson meets one of her Nordstrom customers

      She launched her business two years ago, but Houston teenager Madison Robinson has yet to face something most new entrepreneurs do: rejection. Every store buyer she has approached has placed an order for her Fish Flops for Kids shoe brand.

      Robinson came up with the idea for her sea-creature-adorned flip-flops with battery-operated lights when she was just 8, living at the beach in Galveston Island, Tex. Her dad Dan, a former banker turned t-shirt designer, helped her turn her drawings into a product and get samples made. More than 30 stores placed orders the first time they exhibited at a trade show, so he hired an overseas manufacturer and started shipping in May 2011.

      Launched with “friends and family” financing, the enterprise is already profitable, the elder Robinson says. The shoes now sell online, in various retail boutiques, and at 60 Nordstrom stores nationwide for around $20 a pair. They’re also coming soon to FlipFlopShops.com, and Macy’s buyers in New York recently asked

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    • Case studies, inspiration and the time to start: Small Business Reading for May 31st, 2013

      Inspiration and ideas

      Ideas and inspiration. These are the starting point for any business whether it is a tiny mom-and-pop or the next billion dollar internet startup. We've recently profiled a set of businesses that are at various stages from just starting out to settled, global success and which cover a range of industries. But they have one thing in common - they all got their start from great ideas and inspiration. Take a look at Barefoot Wines, Ivy's Garden, Bulk Apothecary, Fish Flops and CampusBookRentals. For those of you that haven't yet taken the jump into starting your own business, you can get started with our series on starting a business - the links to the three articles that make up part four (all about naming your business) are below and you can find the links to parts 1 through 3 in them.

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    • From $250,000 debt to $40 million sales: A small biz survival story

      CampusBookRentals founder and CEO Alan Martin

      In the years after racking up $250,000 in credit card debt to launch his startup, Alan Martin hit a couple of obstacles that he says “should have sunk us.” But his company, CampusBookRentals, survived and now, five years in business, projects 2013 sales of $40 million.

      His experience is a cautionary tale for any would-be business owner.

      Martin conceived his business idea while working his way through graduate school as a civilian contracts negotiator for the U.S. Air Force. Textbooks for his management classes were expensive, so he bought them used online, and sold them again at semester’s end. It occurred to him, he says, “I’m selling every book online for what I bought it for. If I could rent them out in between, it could be a cool service for students.”

      His wife, some friends, and he began saving credit card offers and set up shop in his Ogden, Utah, basement with a quarter million dollars in cash advances. He quit his job and the master’s degree program to build the company in phases:

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    • Tending the Talent: Think Perennially

      Growing Talent

      Spring is here, and people everywhere are starting gardens. It’s not as easy as it sounds. Besides getting dirty hands, aching backs, and a sunburn, there are some serious decisions to make; one being whether to buy ready-to-plant starters, guaranteed to perform, or to take your chances with great grandma’s forgotten “heirloom” attic seeds, which may turn out great, or force a gardener, mid-summer, to ferry veggies from the grocery for the rest of the season. It’s the same choice businesses make when they hire talent: Sprout it from seed or drop in ready-to-bear-fruit starters? Here are a few garden tips from a “head” hunter’s perspective.

      Seeds

      It’s easy to get lost in a reverie, envisioning your business’s culture fermenting organically, seeded by fresh, hungry graduates primed to change the world. They are cheap, will work hard, and this game plan helps the economy--how much better can it be? Remember great grandma’s seeds - the ones that haven’t been tested - their “fruiting” ratio

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    • Rags-to-riches beach reading: the Barefoot Wine story

      Barefoot Wine founders Bonnie Harvey and Michael Houlihan

      Looking for a good book to get lost in this Memorial Day weekend? The Barefoot Spirit is an entertaining rags-to-riches story of American entrepreneurship. Released this week, the paperback has already climbed to the top of the Amazon bestsellers list.

      It’s the first-hand tale of California rule breakers Michael Houlihan and Bonnie Harvey, founders of the country’s top-selling wine brand. The couple conceived Barefoot Cellars in 1986, three years after they met in a Santa Rosa blues bar. They sold the business to E&J Gallo in 2005 for an undisclosed price that they say left them “satisfied.”

      Barefoot is famous for having rejected winemaking snobbery. Their colorful, plain-English labels marketed wine more like beer—a fun, not stuffy, beverage—with the slogan “get Barefoot and have a great time!” And by leaving the vintage and appellation, or grape harvest year and region, off their labels, the producer was free to blend a taste that was consistent year to year.

      Harvey says, “You shouldn’t

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    • Fun beach reading for small business inspiration

      The founders of Barefoot Wine spent 19 years transforming their industry before selling the brand to E&J Gallo in 2005. Today, Michael Houlihan and Bonnie Harvey share their marketing and business savvy with other entrepreneurs and the nonprofit causes they support. (See our main story "Rags-to-riches beach reading: the Barefoot wine story.")

      Their book The Barefoot Spirit: How Hardship, Hustle, and Heart Built America’s #1 Wine Brand, released this week, is such an entertaining read that you won’t notice you’re digesting practical advice for anyone with a dream of business success.

      Yahoo! Small Business spoke with Houlihan and Harvey by phone from their Sonoma County home about how the “Barefoot spirit” and their experiences translate to other businesses.

      Yahoo! Small Business: What is "the Barefoot spirit?"

      Houlihan: Our book is really about the fundamental guiding principles we subscribed to that enabled us to overcome insurmountable challenges—not just with our business but in the

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    • Small Business: Big Crime

      Small Business Crime InfographicSobering news from Bolt Insurance in this infographic. We already knew that small businesses are far more susceptible to cybercrime than most owners think. But it turns out that plain old physical crime is also a high risk for the average small business. How bad is it? 35 times as bad - or put another way, a small business is 35 times more likely to be a victim of a crime than a large business. That's a shockingly high number. And what kinds of crime? Cybercrime as already mentioned, plus fraud, breaking and entering, shoplifting and a lot more.Even worse, the real numbers may be higher still since it is estimated that fewer than 30% of crimes against small businesses get reported.

      The annual cost to businesses in the US is staggering - almost $657 million dollars in office equipment thefts alone. The worst category of crime? Embezzlement which is estimated to cost small businesses a frightening $90 BILLION a year.

      Of course, the real reason is that small businesses cannot afford costly

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    • Which businesses default on loans most? Surprising data

      When it comes to borrowing money, Vidur Dhanda says small businesses are not as risky as the banks think they are, and he has two terabytes of data to prove it.

      A data-modeling expert and long-time financial industry consultant, Dhanda began three years ago aggregating data points on nearly all U.S. businesses. He licensed several proprietary databases, tapped the U.S. Census and Bureau of Labor Statistics, and wrote algorithms to chart businesses' defaults on a wide range of debts such as credit cards, vehicle and equipment leases, loans, and lines of credit.

      Today, his company WAIN Street, named for its mission to bring Wall Street-style analysis to Main Street, publishes a monthly index that reports how well 18 million businesses in a variety of sectors and geographic regions are meeting their financial obligations. The WAIN Street Business Default Index is a unique barometer of the U.S. economy. And Dhanda says the data show that small businesses are far more reliable than big ones

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    • The Economic History of the World in One Simple Picture

      The History of Opportunity via fundersandfounders.com

      This infographic from fundersandfounders.com may be a little simplistic – especially because the timeline goes all the way back to pre-history - but it's still a powerful representation of economic history. It should give us all hope for the future – especially since more and more startups are focusing on areas like energy and healthcare and the environment. But is it all true? Where do numbers like these come from?

      Back in 1998, J. Bradford DeLong of the Department of Economics at U.C. Berkeley wrote a paper on estimating World GDP from one million BC to the present. It’s a fascinating economic read that looks at the growth in human populations and the connection between human population and economic growth. Most interesting are the points where economic output and production jump and stop being linearly connected to population. Basically these changes occur approximately in 1500 with the growth in trade and the Renaissance and in about 1820 with a steady increase in industrialization

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