One of the most profitable things a company can do is increase its gross margins (sales minus the direct cost of sales divided by total sales). This can be done in one of two ways: increase selling price or decrease the cost of goods sold....
Last time I wrote about the importance of grooming your internal management team (and possibly your own replacement) as a universally accepted way to build your business and increase its value. Now let’s talk about some ways in which you can increase the “attractiveness” of...
In my previous blog I wrote about the need to reduce customer concentration in order to increase your value to prospective buyers. Now let’s talk about the importance of building your internal management team. In the early days of running your own business, it’s natural for...
In two recent blogs I wrote about increasing the value of a privately-held IT company by reducing some of the risk factors. In this post I’ll focus on the risk of having an excessive concentration in your customer base. Many small businesses can’t help but...
There are four primary elements in developing your exit strategy: What are your objectives?: What is your time frame for selling the business? Do you have legacy considerations to address? What are the implications for the type of deal being contemplated? Business Assessment: Conduct a mini due...
When planning your exit strategy, you must consider how the owner wishes to transfer control of the business. The seven business transfer methods to consider are: Employees Charitable trusts Family Co-owners Outside buyers (followed by retirement of the current owner) Outside buyers (followed by the current owner working in the business for a...
In a previous blog I wrote about increasing the value of a privately-held IT company by building a culture of managing and reducing risk factors. In this post, I’ll cover four more areas where you can reduce uncertainty that will affect your company’s valuation. Adopt long-term...
In my previous blog I wrote about managing your costs to increase profitability and the value of your IT business. Let’s change gears and talk about something else that is related to value, but is more difficult to measure than sales and profits. I’m talking...
In my previous post I wrote about growing your sales as the surest way to increase the value of your business. The second method to boost your profitability is to lower your cost of goods sold (COGS) and expenses. Here are some ways to reduce...
In a previous post, I wrote about finding the value of your business and how it varies according to who’s in the market looking to buy (including the different types of buyers). But how can you systematically drive up the value of your company? Increasing the...