The Serial Entrepreneur vs. the Dealmaker
Today I will compare the strategies of the serial entrepreneur and the dealmaker. Both are worth studying because they have much to teach us about wealth creation. However, before we do that we will look at some important business concepts. Continue reading
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.”
Sean Parker Interview
Sean Parker talks with Jimmy Fallon about his road to tycoon status. While Sean hasn’t used acquisitions as his wealth strategy it’s still interesting to hear about how he thinks and reacts to opportunities. Not too long ago, after the Napster fiasco, he was so broke that he was sleeping on friend’s sofas and mowing their lawns as payment. Continue reading
Entrepreneurs and Small Business Owners Can Use Acquisitions to Double or Triple Their Customer Base Overnight
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
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