Assessment Tools Introduced for Minority Business Owners

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Assessment Tools

NATIVE BRIEF: NEW YORK - American Indian businesses certified through the National Minority Supplier Development Council can take advantage of new assessment tools now available. The National Minority Supplier Development Council has teamed up with NuLevel Strategic Solutions, LLC to provide these services.

"Undercapitalization and the inability to access market opportunities are two of the greatest challenges confronting minority-owned businesses," noted David Willis, principal at NuLevel. "However, these challenges are compounded by management teams that are not spending adequate time understanding the internal dynamics of their businesses. We find that many business owners are focusing more on business development and less on overall business health. Greater focus in this area will likely lead to more profitable and sustainable growth."

These assessment tools are called "Biz-Fit Challenge."

The first phase of the "Biz-Fit Challenge" will consist of three challenges, the first of which will be the "Biz-Health Analyzer." This challenge will allow MBEs to assess their business' health relative to profitability, liquidity, solvency, leverage and efficiency-the most common factors considered by capital providers. The tool will also help MBEs better assess how they are performing relative to their industry peers.

The second challenge is the "Breakeven Analyzer." This tool is designed to help business owners determine the company's current breakeven revenues and its five-year projected breakeven revenues. MBEs can also use this tool to determine their minimum revenue requirements on an annual, monthly, weekly and per unit basis. Understanding Breakeven is extremely critical to business development, pricing and managing operations. As such, MBEs are encouraged to utilize the data obtained from this exercise as a baseline for improving in these three areas. Many firms also use this data as a core component in implementing long-range or strategic plans.

The third challenge of the first series is the "Valuation Analyzer," which is designed to give businesses a rough fair market value estimate for their company, based on applied industry-based valuation multiples. Upon completion, a supplemental summary report will be generated that will offer a more robust discussion on business value. This discussion will include an overview for various valuation methodologies and approaches to building business value; translating value into wealth; interpreting business value; and understanding business value drivers.

The Biz-Fit Challenge was designed to stimulate more critical thinking around the areas of the business that often lie dormant, but have serious long-term consequences on the firm's ability to raise capital and access market opportunities. The key underlying driver of failure in these two areas is the failure to prepare. Each "Challenge" will help business owners better understand the financial condition and health of their businesses', while simultaneously outlining strategies for improvement. The knowledge gained through these exercises will hopefully better prepare firms to attract the right capital and market opportunities.

posted July 13, 2011 6:00 am edt