The two most important factors in building a valuable business (or business unit) are:
- your net cashflow growth rate, and
- your business risk levels (things that can make your growth rate unsteady or occassionally negative)
You want fast growth with all your key risks well managed. There is a little trade off there but its essential to manage both!
Stay on top of those two factors and you will be working on the two most important drivers of any valuation multiple (like a price-earnings ratio).
