Dependencies Will Kill Your Valuation

As I write this, and as you read this, I’m in Antigua, West Indies on a Rotary service project, “Improving Education Through Technology.” This means installing computers, Wi-Fi networks, and training teachers on how to teach better (reach the kids) using technology.

This is our 12th project and it’s much like a small business. Our annual cash budget is over $100,000 and the total value including in-kind, donations, and discounts is about $250,000. It’s also like a small business in that it’s top heavy.  My friend Jeff Mason with the Bellevue School District’s Cisco Networking program, technology side, and me, business side, are true project dependencies.

If I couldn’t secure funding, write the Rotary matching grant application, deal with the bureaucracy, and the politics there would be no project. If Jeff wasn’t around to procure equipment, get it ready, pack it, load it, and train our team of students, who do the on-the-ground work, the project wouldn’t happen.

Compare this to a business, and not even micro-businesses doing hundreds of thousands a year in sales. Compare it to a business doing $1-10 million in sales where you can fill in the blank, “The owner is the only one who ________.” It could be she:

  • Can program the machine
  • Can finalize the bids
  • Has the customer relationships

Or a myriad of other tasks. The chances are these owners can’t go to New Zealand for a month and have the same business when they return.

Business owners need to get others to do what only they now do. It won’t happen on our project, and probably shouldn’t, but it needs to happen in a business if the owner wants the value to increase.

“No snowflake in an avalanche ever feels responsible.” Stanislaw Jerzy Lee

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