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reading Linda Feinholz s supplemental chapter on management on my Web site Also, I suggest you read literature on marketing, sales, and management, and consider hiring professionals in those fields to help you The second thing you can do to maximize the growth rate is to stop playing tax games of pocketing cash income and not reporting it, and charging personal expenses to the business Minimally, you should do this for at least three and preferably five years before you plan to sell the business You will report more income, pay more taxes, and have less personal cash flow for those three to five years, but by going legit, you should be able to sell the business for many times the additional taxes you will pay The faster you (and others) forecast that you will able to increase your cash flows, the more valuable your business will be Usually, though not always, this will depend on your having demonstrated the ability to produce and manage high growth in the past As with the other variables, there is a tradeoff Fast growth means sales will be higher, which requires more net working capital Thus, fast growth increases net income, which adds to cash flow but also requires more net working capital, which decreases cash flow The worst combination is fast growth in sales, which decreases cash flow through its effect on net working capital, combined with a declining profit margin, which decreases net income and cash flow This occurs when the business owner is managing growth poorly Fast growth creates excitement for a business, but also strain It requires a greater degree of structure and organization at each new size level, and it requires greater professionalism This ties into the ideas in the previous section on reducing risk It is appropriate to point out the effect of growth on risk There is a big bonus for those who can manage high growth rates for many years Reiterating a point made in 5, if your firm grows to a size large enough to be attractive in the Mergers & Acquisitions market or for purchase by a public company, then the likely buyers will be well-diversified investors, those who are able to diversify away the risk of the smaller size of the business by including it in a larger portfolio Such in-.



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Timbuktu offers a similar security mechanism for passwords in the form of limiting password reuse, number of characters, and number of days until the password expires, as shown here:

Figure 8-2





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vestors may be using the Capital Asset Pricing Model to calculate the discount rate, which typically results in much smaller discount rates, and therefore much higher values and selling prices In such cases, there is a lower value ( the floor ) of the business as a stand-alone entity or as one sold to an undiversified buyer where its size risk cannot be diversified away and a higher value ( the ceiling ) of the business to the fully diversified buyer The transaction could then take place at either end or anywhere in between, depending on the negotiating skills and staying power of the parties In such a case, there is no such thing as the right price There is an entire range of possible prices all of which are reasonable

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Listing 8-2 lists the code for generating a table of contents automatically This code is stored in a separate file named buildTOCjs and is included in the target web page using a <SCRIPT> tag with a SRC attribute, like this:

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