If your goal is to build a more valuable company, stop selling your time.
Billing by the hour or day means customers are renting your time rather than buying a result, which means that your business model lacks leverage. To grow, you need to either work harder or hire more people. Since it can take months to ramp up new employees, fast growth is just about impossible.
One of the eight factors that acquirers look for in the businesses they invest in is your company's Growth Potential. Sim…
Most businesses will lose a certain amount of customers over time. This attrition can be caused by anything from customers who are unhappy to customers moving away.
The value of a business has a lot to do with the expectations of a buyer being able to maintain the current revenue levels (in addition to opportunities to grow the business). Buyers will want to see proven marketing programs in place that will fill that ongoing “leaking bucket”.
A football defensive coordinator needs to protect against an “end run,” a tactical play where your opponent sends the running back wide around the offensive line to try to evade the oncoming tackle.
Just like in football, you have to defend against an end run coming from a supplier that chooses to go around you to get to your customers. The more of your supply you get from a single provider, the more vulnerable you are to that supplier deciding they don’t need you and instead deciding to go …
This was a pretty interesting episode of John Warrillow's Built to Sell podcast.
Along with three friends, Sebastian Johnston co-founded TheAmazeApp in 2014. The idea was simple: Social media influencers could upload a picture of what they were wearing and tag the clothing on TheAmazeApp’s database of e-commerce retailers. Then, when one of their followers purchased the item, TheAmazeApp would receive a commission they shared with the influencer.
The founding team raised $800,000 through…
Key employees in place can be very important in the sale of a business!
Buyers are always interested to know if there are well-trained key employees that will stay with a new owner of the business. That expertise within the company's operations can be very important in the transaction and future performance.
Key employees can include top managers, department heads and other long-time employees in important positions throughout the company. In order to sell their business, owners must give t…
Technology and the internet are essentially changing every business in some way or other. It can be challenging, but business owners must keep aware of what ‘s going on in their industry and where it is headed.
Some businesses have a bright future, others need to make drastic changes. Business owners can search on the internet, go to trade shows and seminars, read books, articles, blogs, talk to others in the industry.
In order to have future value for a buyer, business owners can't ignore …
As a business owner, you’re likely proud of the results you’ve achieved in the past, but when it comes to the value of your business, your future is critical. That’s why your growth potential is one of eight factors that drive the value of your business.
One metric that acquirers may use to evaluate your growth potential is your revenue per employee.
Alphabet (Google’s parent company) generates around $1.3 million in revenue per employee. Compare that to the advertising agency WPP Group, who…
You've likely heard the adage that it is far easier to cross-sell an existing customer a new product than it is to find a new customer.
And if your goal is to grow at all costs, then cross-selling makes sense.
However, all of that sales growth may not do much for the value of your company. If you cross-sell your existing customers too much stuff, it could make your business far less valuable.
When you cross-sell a customer so many things that they begin to account for more than 15–30% of y…
"Due Diligence" or the "Right of Inspection" gives the buyer the full rights to inspect all items in a business -- financials, equipment, inventory, premises and anything else. And if the buyer finds any material discrepancies, he or she usually has the legal option of backing out. Some transactions fall apart during due diligence, only because the sellers have ignored fixing the problems of their business and just hoped for the best.
Jim Estill is one of the most successful entrepreneurs you've probably never heard of.
In 1975, Estill started EMJ Data, a technology distribution company, from the trunk of his car and grew it to $350 million in sales before taking it public.
In 1997, Estill joined the board of Blackberry and stayed through the company's heyday that ushered in the era of the iPhone.
He then became a partner at CanRock Ventures, a venture capital firm.
In 2015, Estill bought Danby Appliances, the company…