The Most Important Metric

When you’re running a business, it’s common to hyper focus on revenue and profits. After all, these are clear indicators of success, right? 

While they are definitely important, they don’t tell the whole story—especially if you ever plan to step away from the business, sell it, or pass it on to someone else.

Focusing on enterprise value—the overall worth of your business as an asset—can transform the way you grow and operate. Here’s how:

1. It Brings Clarity and Focus

When you manage with enterprise value in mind, you focus on what truly matters: building sustainable systems, strong customer relationships, and a talented team. These elements not only boost your business’s value but also create a smoother, more predictable operation for you as the owner.

2. It Leads to Short-Term Profitability

Enterprise value and profitability go hand in hand. For example, improving operational efficiency or reducing customer churn doesn’t just boost value; it also increases your bottom line today. These are win-win strategies.

3. It Enhances Your Quality of Life

A business with strong enterprise value doesn’t rely on the owner for daily operations. This means fewer late nights and stressful emergencies for you. Instead, you get a business that runs like a well-oiled machine—freeing up time to focus on your goals, family, or even hobbies you’ve been neglecting.

But what happens if you focus solely on revenue and profits? You might experience growth in the short term, and even take home more money, but at what cost? 

A business that scales without considering value can end up with fragile systems, high dependency on the owner, or even a customer base that’s too concentrated. These factors make the business riskier and less appealing to potential buyers, investors, or successors.

By managing with enterprise value in mind, you’re not just creating a more valuable business—you’re creating a better life for yourself and a legacy you can be proud of. 

You create a virtuous cycle of near term rewards like profits and time, and long term rewards like significant wealth and satisfaction.

Ask yourself: Is your business positioned for value or just short-term gains? The answer might redefine how you approach growth.