Unleashing the True Value of Your Company with Tony Cotrupe
If you’re wondering about your company’s true value or looking for ways to make it worth more, you’re going to want to hear what our guest today has to say.
Meet Tony Cotrupe. Tony is the Managing Director of Meliora Advisors, an advisory firm focused on transaction analysis, business valuation, and strategic consulting. After over 30 years of experience as an international investment banker, economist, and consultant at premier firms such as JPMorgan, Ernst& Young, and Huron Consulting, Tony decides to start his own company. That’s how Meliora Advisors was born. He now uses his extensive knowledge in business valuations, investment banking, economic consulting, and private equity to help business owners make management decisions with confidence and clarity.
According to Tony, his biggest asset is his unique ability to analyze and understand complex transactions as well as explain them in a way that is relatable and understandable.
In this episode of the Think Business with Tyler podcast, we talk about the importance of driving value to your business, why you shouldn’t rely solely on financial statements, why business owners shouldn’t do everything, and how to overcome self-doubt.
If you want to hear more about business valuation, tune into this episode to hear what Tony has to say.
💡 Name: Tony Cotrupe
💡 What he does: Tony is the Managing Director of Meliora Advisors.
💡 Noteworthy: He has over 30 years of experience as an international investment banker, economist, and consultant at premier firms.
💡 Key Quote: “Everything you do in your business should be geared toward increasing corporate value. If you’re not increasing corporate value, you’re not doing the right things.”
💡 Where to find Tony: LinkedIn
Increasing business value should be one of your main objectives. As a business owner, you might be asking yourself when would be the appropriate time to start thinking about driving value for your business. Well, the answer is as soon as possible. According to Tony, increasing business value should be your top priority. He explains, “Once the business is kind of self-sustaining, that’s where you need to start thinking about driving value, and this goes from the smallest $1 million revenue company to 60, 70, 80 million revenue companies. I tell them, “Everything you do in your business should be geared toward increasing corporate value. If you’re not increasing corporate value, you’re not doing the right things.’”
Financial statements are vital, but they have their limitations. Although financial statements are extremely important because they provide valuable information about your business, you shouldn’t rely on them to an excessive extent. Tony explains, “Financial statements are great as a look back because, as I say, when you’re driving a car, a rearview mirror is a good thing to have ‘cause you can see what’s behind you. But if you keep your eye in the rearview mirror and not through the windshield, unless the road behind you is exactly like the road in front of you, you’re going to hit something, whether it’s a dip, a tree, a global pandemic, something like that.”
Business owners can’t and shouldn’t do everything in their company. As a business owner, you might be tempted to do everything by yourself. But that’s never a good idea. Not only does it lead to burnout, but it also makes you less productive. Instead, do what you do best and let others take care of the rest. Tony says, “As an entrepreneur, you’re a visionary. You’re thinking about where things are going. Making payroll next week is not something you should be focusing on. You need to get people in the chairs to do the jobs that make the company run.”
Don’t let your self-doubt get in your way. Self-doubt is often the main reason why people get stuck or fail to take action. So try to overcome your insecurities and see the value others see in you. Tony shares the advice his father once gave him. He says, “The piece of advice he gave me was, ‘If somebody ever asks you if you can do something, tell them yes. Let them figure out if you can’t do it.’ And that has actually served me quite well. This is not fake it till you make it stuff. Let me be clear about that. If somebody’s asking you to do something, they probably have some knowledge of what they need done and what you are and maybe are seeing skills in you that you don’t see in yourself.”
“It starts out, I want a ballpark number, nothing fancy, whatever. But what really ends up happening is we get into it, we start digging into it. To me, what it all boils down to is finding the value drivers in a business. What’s driving your value?”
“A person in a very well-known private equity firm told me you can change everything about a deal except the price you paid.”
“Every one of them is different, but they all seem to follow certain pathways. And what it boils down to for me is value is a function of the future cash flow of the business, how much cash can we generate out of this business going forward? And the second factor is the risk associated with generating that cash flow. Those are the two factors.”
“It’s hard to go sometimes from being an entrepreneur to being a manager. And I’m actually dealing with that right now with a client of mine. This person is used to being involved in everything that goes on, and it really is an inefficient way to run your company.“
“If you make an error, be accountable.”
“Everybody makes mistakes, but you have to own up. You have to figure out how to fix it. You have to work the problem. And pointing fingers is not the last thing, but it’s beyond the last thing you should do.”
“I usually get called in, I like to say, when people want to buy stuff, sell stuff, or argue over stuff and the argue over stuff is usually good theater.”