Rich father-style business model -- enterprise value business

Source: http://www.91px.com author Zhou lingfeng

Nowadays, the book is huge, the street is small, and the book "Rich dad, poor dad" is popular across the country with its purple cover. It is said that one of the authors of this book, Robert qizaki, will come to China to give a speech. This book teaches tens of millions of people a new concept of wealth, revealing the secret of becoming a rich man; overthrowing the fortune law of "high salary = rich"; advocating a stable "cash flow" to protect your life; we will teach you how to really distinguish assets from liabilities and face the rising tide of personal finances with ease. Poor fathers rely on thrift to earn money, while rich fathers rely on investment to gather wealth. How can they use financial companies to earn money? I believe that as a modern person living in reality, you must learn financial management and grasp the necessary financial knowledge. The author of this book is nothing more than to teach people how to establish a valuable "Wealth concept" and use this idea to guide life and make life more valuable. So, does the enterprise have the same situation? Of course. There are also "Rich enterprises and poor enterprises" in the business world. They are divided into poor and rich because of their financial management concept, or, further, the reason is that their business philosophy and methods are different. An enterprise, as a profitable organization, exists in an invisible market. Its final purpose is to increase the value of the enterprise, which is embodied in increasing the value of shareholders, at the same time, it is necessary to balance the relationship between customers, consumers, employees, and enterprise stakeholders. Pursuing enterprise value, that is, "How can we maximize enterprise value through business management ?", There are many academic achievements to answer this question. But "have the companies that are considered successful actually practiced the academic achievements of these enterprise financial theories ?" "Is a poorly-operated company isolated from the success path presented by the company's financial theory ?" I have more or less contact with companies in different industries with different business philosophy or corporate culture, and have listened to the experiences of the company's "Bosses" or management. It is not difficult to find such an empirical conclusion: According to the theoretical results of enterprise finance, enterprise operation is very meaningful and a shortcut to success. This kind of business philosophy and method can be described as "rich father-style business ". So what should we pay attention to in the creation of enterprise value? It should be free cash flow. Only free cash flow is the only indicator of the company's truth. Free cash flow indicates the Cash input and recovery status, while accounting profits cannot grasp the actual situation of enterprise operations and are often invalid. For this reason, carpark Norton of the United States has developed and used the "Balanced Scorecard" to evaluate the company's business situation at the strategic level. More importantly, only the free "cash flow" can play a key evaluation index in Enterprise Operation Evaluation and play the role of overall operation tools. The creation and operation of enterprise value, in other words, is to pay attention to the operation of cash flow, which is to grasp the current cash flow and the resulting accurate Operation Judgment, in addition, it tries to predict future cash flows and develop business plans to operate with the aim of increasing the value of healthy enterprises. To achieve a successful value operation, you must choose an appropriate business area. Therefore, the first and foremost choice of business fields from the perspective of enterprise value creation is to choose a growing business. Because the long-term cash flow from this business has the highest growth rate. Second, we should consider "stability ". Businesses with high stability, in other words, are businesses with low risks. If the business risk is small, the minimum necessary income for capital providers investing in the business field is small; that is, the small capital cost means that the present value of the free cash flow from the business will be large, and the enterprise value will be high. The secret to the success of "invisible champions" or industry giants in various industries in the world is to do monopoly-or potentially become a monopoly of big businesses. It is definitely not a second-level business in the industry. This is also to improve business stability, reduce capital costs, and ultimately increase the value of free cash flow obtained from the business in the same period. In fact, if you are currently in a poor position in the industry, you have to keep an eye on the potential industry position in the future and be prepared to enter the new industry ", later users may take a lot of effort to catch up with each other, so that you may have great stability and obtain stable cash flow. Whether a new business can be easily selected depends on the company's core capabilities, strategic assets, and the timing and conditions for conversion. This is exactly the time to truly test the strategic vision and courage of an entrepreneur. Only by grasping the key evaluation or measurement standards in enterprise operation, or finding the ideas, models, and methods of enterprise value creation, is "rich father-style enterprise operation ". This is the difference between the "poor and rich" of enterprises.