Small businesses often operate as if their sole purpose is to fund the owner’s lifestyle, but the most valuable companies are run with financial rigor. You may be years from wanting to sell, but starting to formalize your operations now will help you predict the...
Cross selling new products and services to your existing customers may be a great marketing strategy, but if your goal is to increase the value of your business, the added revenue may do nothing for your company’s value – and may even lower it. In order...
The managed service provider (MSP) business model has become the standard for delivering IT services. The migration to cloud computing has significantly increased the scope and scalability that MSPs can achieve. These economic considerations have led to a wave of consolidations in the MSP sector,...
Companies like Netflix, UrthBox, and Amazon are leveraging the subscription business model to discover what their customers want next. In a traditional business, the customer buys your product or service once, and it is up to you to try to convince them to buy again in...
Repeat customers are the lifeblood of your business, but customers can be fickle. Here's how to make them sticky. In a traditional business, the customer buys your product or service once, and it is up to you to try to convince them to buy again in...
Is your company good at sales or distribution? Have you built a team that is very efficient and effective at getting your products in the hands of customers? Does your team have specialized knowledge or access to customers? If so, then your team could be...
John McCann sold The Bolt Supply House to Lawson Products (NASDAQ: LAWS) at the end of 2017. McCann’s strategy involved learning from the acquirers who knocked on his door. He invited would-be buyers into his company and listened to what they had to say. He was...
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...
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...