ref:
A business valuation is a set of processes and procedures used to determine the economic value of an entity or set of assets. You must have strong value for your customers or, well, you won’t have any. But beyond that, you must provide substantial value to multiple other parties involved in the life cycle of your business in order to attract and retain employees, partners and capital.
1. Create value
The first stage in the value cycle is to design and market a product that consumers are eager to use because it meets their most important NEED better than competing products.
2. Capture value
The second stage of the value cycle is choosing business activities so that customers are willing to pay for a product at a price high enough above the company's costs to generate sufficient PROFIT and create a return for shareholders after compensating employees and suppliers.
3. Renew value
The final stage in the value cycle is filtering out the noise from the market signals (from changing customer needs, upstart competitors and changing technology) to identify how a company must ADAPT to stay ahead of competitors.This value renewal is the most difficult part of the value cycle for startups trying to survive over the long term.
- http://www.entrepreneur.com/article/238779
- http://www.entrepreneur.com/article/240480
- http://www.entrepreneur.com/article/237422
value proposition = creating enough incentive for someone to take action
A business valuation is a set of processes and procedures used to determine the economic value of an entity or set of assets. You must have strong value for your customers or, well, you won’t have any. But beyond that, you must provide substantial value to multiple other parties involved in the life cycle of your business in order to attract and retain employees, partners and capital.
1. Create value
The first stage in the value cycle is to design and market a product that consumers are eager to use because it meets their most important NEED better than competing products.
2. Capture value
The second stage of the value cycle is choosing business activities so that customers are willing to pay for a product at a price high enough above the company's costs to generate sufficient PROFIT and create a return for shareholders after compensating employees and suppliers.
3. Renew value
The final stage in the value cycle is filtering out the noise from the market signals (from changing customer needs, upstart competitors and changing technology) to identify how a company must ADAPT to stay ahead of competitors.This value renewal is the most difficult part of the value cycle for startups trying to survive over the long term.
