There’s a steady breeze from the northwest, which cools the warm Caribbean afternoon. Framed between a palm tree and the turquoise water, you notice a man reading. He appears to be working, which seems strange given his appearance: shaggy blonde hair, linen shirt, surf shorts and flip-flops. You squint and realize the man is Richard Branson and he just happens to be running … [Read more...] about Thinking Vs. Doing: The Owner’s Dilemma
Microsoft’s recent $26.2 billion acquisition of LinkedIn provides an illustrative example of a strategic acquisition – the type of sale that usually garners the most gain for the acquired company’s shareholders. You may be wondering what a billion-dollar acquisition has to do with your business, but the very same reasons a strategic acquirer buys a $26 billion business holds … [Read more...] about Did Microsoft Overpay For LinkedIn?
When it comes to the value of your business, what happened in the past is much less important than what is likely to happen in the future. One of the most important ways you can shape the future of your business is to create some recurring revenue. Recurring revenue comes from those magical sales you make without really trying. Good examples of recurring revenue models … [Read more...] about Have You Discovered Your Recurring Revenue Model?
Have you set a goal for your company this year? If you’re like most business owners, you’re striving for an increase in your annual sales. It’s natural to want your company to be bigger because that’s what everyone around us seems to celebrate. Magazines profile the fastest growing companies, industry associations celebrate their largest members, and bigger seems to be … [Read more...] about Rich vs. Famous
Whether you want to sell your business next year or a decade from now, you will have two basic options for an external sale: the financial or the strategic buyer. The Financial Buyer The financial buyer is buying the rights to your future profit stream, so the more profitable your business is expected to be, the more your company will be worth to them. Strategies that are … [Read more...] about Why Bother Doing It The Hard Way
Making your business less dependent on you has a number of benefits: you can scale your company more quickly if you’re not acting as a bottleneck; you get more time to enjoy life outside of your business; and a business less dependent on its owner is much more valuable to an acquirer. Pulling yourself out of the day-to-day operations of your business is easier said than … [Read more...] about You-Proofing Your Business
Doctors in the developing world measure their progress not by the aggregate number of children who die in childbirth, but by the infant mortality rate – a ratio of the number of births to deaths. Similarly, baseball’s leadoff batters measure their “on-base percentage” – the number of times they get on base – as a percentage of the number of times they get the chance to … [Read more...] about Six Power Ratios To Start Tracking Now
Your age has a big impact on your attitude toward your business, and your feelings about one day getting out of it. For example, one person who runs a boutique mergers and acquisitions business refuses to take assignments from business owners over the age of 70. He has found that septuagenarians are so personally invested that they can rarely bring themselves to sell … [Read more...] about How Your Age Shapes Your Exit Plan
If you have considered selling your business of late, you may have been disappointed to see the offers a business like yours would garner from would-be acquirers. According to the latest analysis of some 20,000 business owners who have used The Value Builder System, the average offer being made by acquirers is just 3.7 times your pre-tax profit. Companies with less than a … [Read more...] about The Downside of Just Milking It
You've done the hard work of winning a new customer, but it's what you do in the next 90 days that determines if it'll stick around. The first 90 days of any new relationship are critical: A president has about three months to inspire the electorate and gain the political capital he needs to govern. A young team prospect has but a few months to impress his coach … [Read more...] about 90 Days That Will Define Your Business Forever