If you’re wondering when is the right time to sell your business, you may want to wait until your company is generating $1 million in earnings before interest, taxes, depreciation, and amortisation (EBITDA). What’s so special about the million-dollar mark? The million-dollar mark is a tipping point at which the number of buyers interested in acquiring your…
One of the tools a great coach uses is metaphors to impart lessons and insights. I have used the following metaphor with many a client struggling to sort out their business and take back control. Ok, so up front this post is going to be a little crass but I promise a light bulb will…
You know it’s time to get rid of the business, that is sell the business and either move on or step aside for a management team if you can’t grow as a leader or you won’t grow as a leader. One of the immutable laws in business is that the business will never outgrow its…
Big public companies trade at a significant premium over small businesses in the same industry because investors perceive big, sophisticated companies as a safer bet than small, owner-dependent companies. Looking at some USA examples (minimal data available for Australian market) Let’s take a look at the professional services industry. Although most consultancies are a small…
You already know that your company’s sales and profits play a big role in how much your business is worth. Do you also know the role cash flow plays in your valuation? Cash vs. Profits Cash flow is different than profits in that it measures the cash coming in and out of your business rather than…
The value of your business is partly determined by your industry. For example, cloud-based software companies are generally worth a lot more than printing companies these days. However, when we analyse businesses in the same industry, we still see major variations in valuation. So we dug through the data available to us from our partners at…
The Hub and Spoke elaborates the impact of the business being dependent on you personally. The more independent the business to you is, the lower the score. Video Transcript: Hub and spoke refers to how dependent your company is on you personally, again when the acquirer comes to buy your business they’re gonna wanna know…
The video of the 7th driver of Sellability speaks how important customer satisfaction is to a business. That it should be quantified to back the business up in reference to its value. Video Transcript: Customer satisfaction is an obvious driver of sellability, so obviously how satisfied are your customers is gonna be important to a…
The Monopoly Control speaks of your business having control in pricing the product, not being commoditised, and there is a differentiated marketing proposition. Video Transcript: The monopoly control is an attribute of sellability that means you’ve got control over how you price your product. You’re not being commoditised essentially because you’re unique and different on…
This driver of the sellability explains that the more recurring the more valuable the business is. It discussed the 6 forms of hierarchy from bottom to top. Video Transcript: When a buyer comes in and buy your business they wanna understand how’s this business gonna continue when you, the owner leaves, and so the more…
