That is, the share of the owner's capital should be between 40% and 60% of the company's assets. In good times, the capital should go towards 40%, because then you need to borrow and use the growth potential of the business while it is there, and in a crisis, you should reduce exposure to loans because they additionally increase the risk that needs to be reduced in such a time. Capitalism is the name of the game Entrepreneurs are often unaware that this game is called capitalism and if you want to play the big game, you need big capital. It is also important to point out that we, the founders, are the owners of the capital, and the owners of the company are all employees, because they are the owners of their workplaces and the most valuable thing is in their heads. Today, most of the company's value lies in invisible values, and less than 20% of the company's value is in tangible things arising from capital.The price of capital on the capital market is decreasing, and the price of labor on the labor market is increasing, so it is clear where the power lies.
The founders are the owners of the capital, and the owners of the company are all employees because they are the owners of their jobs and the most Japan Phone Number List valuable thing is in their heads. The most valuable things a company has are customers and employees, and especially management if the company has it not only on paper. Brands and unique knowledge or patents that are in the company are also extremely important. The world's most valuable companies have more than 90% of their value in those invisible parts (people, clients, platform, brands, patents. that's why the role of management is crucial because all these values need to be well managed. Three stages of company development In the first phase of the company's development, it is necessary to develop the Market system, that is, the network of customers and the value proposition that meets the needs of customers. The consequence of a well-developed market system is high income growth.
In the second phase, the Operating System should be developed, that is, the good management of resources of all kinds, originally human, and then all others - material, technological, warehouses, brands. The consequence of good resource management is a low operating cycle of money, that is, a smaller amount of owner's capital is required for the company to function successfully. It is at that moment that problems occur and companies slow down their growth because they manage resources poorly, so they need more capital and more financing. There is a saying that says: Turnover is a necessity, profit is good, but cash flow is king, because companies fail neither because of turnover nor because of profit, but because of a lack of money, that is, because of poor management of the operating cycle of money. An operating cash cycle longer than 180 days means that the company is losing money and its future is in doubt.An operating cycle of 180 days means that the firm needs owner's capital for the turnover of the company for 180 days.