In a prior article in this series we talked about the trade-offs related to the relative size of a company in comparison to its market position. However, if you look at a company’s size and compare it to its valuation, bigger is almost always better. Organic...
If you’re wondering what your business might be worth to an acquirer, there is a simple calculation you can use. Let’s call it “The Build vs. Buy Equation”. At some point, every acquirer does the math and calculates how much it would cost to re-create what you’ve...
Since one often hears the term “fair value” or “fair market value,” it would be easy to assume that “fairness opinion” means the same thing. A fairness opinion may be based to some degree on fair market value, but there the similarities end. Assume that...
Source: Datto Inc.’s “2017 State of the MSP Report”, based on a survey of nearly 1,200 MSPs in North America. 59% of MSP owners are between 35 and 54 years old. 21% of MSPs have over $5 million annual revenue, 20% have revenue from $2...
Every business wants to grow, but as it grows it often changes and some parts of the business may no longer be a good fit. When that happens, the company should consider selling that part of the business. That is called divesting. The principle behind divestment...
Are you a big fish in a small pond? Have you become the preeminent supplier in your market niche? If so, it can be a good news/bad news situation for a potential acquirer. The good news is that you likely have good name recognition and great...
Imagine you’re a farmer and you’ve been tending to your crops all year. It’s harvest season and finally time to collect the spoils of your labor. You start harvesting your crops only to find out that pesky rodents have been quietly eating away at your fields....
A recent article posted on the Axial Forum entitled “What Do Buyers Look for in the Lower Middle Market?” explains how to make your business valuable to potential buyers and how to find the right buyers for your business. The buyers in the lower middle market...
Are your customers an asset? They could be a core part of your value to a potential acquirer. But that value is directly related to the strength of your relationship with those customers. Are your customers raving fans? Do they provide you with recurring revenue? Do...
If your goal is to grow your business fast, you need a positive cash flow cycle or the ability to raise money at a feverish pace. Anything less and you will quickly grow yourself out of business. A positive cash flow cycle simply means you get...