Billionaire Growth Strategies

Growth Strategies to Maximize Your Company’s Valuation at Selling Time

During my first year a broker, we were called by a gentleman who was interested in selling his company. Since owners typically don’t want their employees to know that they are thinking about selling the company, we agreed to meet at a nearby coffee shop. I went to the meeting with a senior broker from my firm who had worked as a banker in a previous career and could quickly calculate the probable worth of a business in his head. The seller turned out to an elderly gentleman of about 65 – 70 who had started and built the industrial supplies wholesaling business over thirty years. After the three of us hadexchanged a few pleasantries, the senior broker jumped straight into the key questions. How much owner’s income is generated by your business? The owner replied “about $100,000.” The broker then asked him how much he had in inventory. About $500,000 was the reply. At this point the broker fell silent for a minute as he crunched the numbers in his head. Finally he spoke, “The best advice I can give you then is to sell the inventory off for $300,000 to $400,000 and then shut it down. You’ll get more that way then if you try to sell it as a going concern. At best you might expect a multiple of 1.5X or 2X on owner’s income.”

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Entrepreneurs and Small Business Owners Can Use Acquisitions to Double or Triple Their Customer Base Overnight

Oftentimes it’s easier to significantly increase your customer base through the acquisition of competitors than it is with the more commonly used marketing route.  Anyone with at least a modicum of business experience appreciates just how challenging it is for an established business to grow its customer base by 10% per annum if it relies solely on marketing efforts.  On the other hand, the acquisition of a competitor can double, triple, or quadruple your customer base at deal closing. Continue reading

Business Growth Strategies for Entrepreneurs and Small Business Owners

Running a small business comes with as many headaches as running a big one. – Anon

Whoever said this was on the money.  Running a small business is just as stressful and problem-laden as it is running a much larger business with a few possible exceptions. The most common example is where the owner has intentionally designed a low maintenance business that affords him the maximum possible time for golf or television viewing or whatever their preferred leisure time activity is. The downside to these types of business is the shockingly low valuation that appears at selling time.  This article won’t be of any interest to this category of business owner.  However, if you are always on the lookout for growth opportunities and growth strategies, read on. Continue reading

Sean Parker: Agent Of Disruption

I have had a chance to do anything more than scan this article from Forbes by it looks to be a great read if you are into tycoon strategies. Tycoons tend to be disruptors as I show in the Tycoon Playbook. To be a disruptor you need to have the courage to take on vested interests and the powerful. You’re going to make some enemies. Sean has certainly made some enemies along the way most notably in the music industry but he’s also worth $2.1 billion today.  That’s a good trade off in my book. Continue reading

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