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How To Find A $100 Million Idea

Posted by & filed under Build Business Value, Building Business Value, Business Growth, Business Owner, Business Valuation, Buyer FAQ, Buying a Business, Seller Articles, Seller FAQ, Selling a Business, Valuation, Value Builder System™.

Dr. David Bach is a Harvard-trained scientist, physician, and serial entrepreneur.

Bach has founded and built three healthcare companies, each of which grew to over $100 million in value. His most recent exit was from Leprechaun LLC which became the fastest-growing company in America before it was acquired delivering a 90X return for his shareholders.

What is Bach’s secret for consistently picking winners? It all comes down to a process he goes through before he starts a company which he’ll describe in this week’s episode of Built to Sell Radio.

Listen now

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If you’re interested in improving the value of your business, take our questionnaire or contact Colonial Business Brokerage today at 443-982-7332.

Must You Fire Your Managers to Grow the Business?

Posted by & filed under Build Business Value, Building Business Value, Business Growth, Business Owner, Business Valuation, Valuation, Value Builder System™.

Must You Fire Your Managers to Grow the Business?

Building business value is a common goal among business owners. Many successful small business owners find that after years of growth, the company can begin to plateau. It can be frustrating if you and your longtime managers realize that all of the things that grew the business in the past aren’t doing the trick anymore. It’s especially frustrating if you realize that the cause of this stagnation might be your longtime managers themselves.

Today, we’ll look at a touchy subject: what to do about management teams that no longer produce the business growth necessary to support your ideal future.

Overcoming the plateau

Consider a fictional company, Big Brain Streaming Services. Over five years, one of the original co-founders and then-CEO, Riley Ruckus, had grown Big Brain significantly. Then, one of Riley’s biggest investors, Huey del Rocha, decided that he wanted to take over as CEO. Huey didn’t think Riley had the skills to continue growing the business. Huey demoted Riley from CEO to President. Over the next few years, Big Brain exploded under the guidance of its new CEO.

In this example, firing the CEO achieved the aim of growing the business. But if you’re like many small business owners, this can be a problematic solution, especially if you feel a sense of loyalty to your managers. The idea of demoting or firing people who helped you build the business might be unpalatable.

However, to effectively overcome plateauing business value, you’ll likely need to install a next-level management team. Next-level management teams are strong drivers of business value because they typically know how to build business value beyond what current management can do. As the Big Brain example showed, sometimes, the ideas that grew the company at first aren’t good enough to grow the company going forward. Sometimes, change is necessary, and that change comes in the form of an injection of new, more fitting talent.

Fortunately, you don’t necessarily need to fire current managers. Loyalty and change are not mutually exclusive. In addition to replacing current managers, you can take two other tracks to install next-level management and still abide by your personal code of loyalty.

Reassign current managers

In the Big Brain example, the new CEO replaced the old CEO because it was necessary for the business’ success. This is an important thing for you to understand. It is completely normal for growing businesses to replace all or part of an existing management team.

One way to split the difference between doing nothing and replacing everyone is to reassign current managers to more fitting roles. For example, your business may have an operations director who does incredible work when managing five people. But for your business to grow to the point where you can reach financial independence post-exit, it may need an operations director who can manage many more than five people. Rather than hiring an outside director and firing the current director, you can hire the outside director and move the current director into a role where their skill set is still valuable.

The consequence of taking this tack is that you’ve taken a step toward growing the business while giving your current manager the best chance to succeed, rather than throwing them in the deep end.

Retrain current managers

Current managers of successful businesses have obvious talent. Thus, it’s possible to retrain current managers to go above and beyond what they currently do. You can potentially train promising managers to continue building business value beyond what they’re producing today.

However, this strategy requires commitment and forethought. It may require outside counsel. You cannot simply expect current managers to “do more.” You must instead define what you expect from managers, make those expectations achievable, and reward managers for achieving and surpassing expectations. First, giving top managers access to training, education, coaching, and the like builds their skill sets. Then, setting ambitious yet reasonable goals can motivate your current managers to use their new skills to grow the business as you need it to grow.

Conclusion

To continue growing your business, you may need to determine whether your current management team is the right group to grow the company appropriately. In terms of planning for your business’ future, “appropriate growth” means the amount of growth necessary to provide you with financial security when you eventually leave it.

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If you’re interested in improving the value of your business, take our questionnaire or contact Colonial Business Brokerage today at 443-982-7332.

Do you know how much each prospect is worth to your business?

Posted by & filed under Business Growth, Business Owner, Marketing, Small Business Marketing.

Do You Know How Much Each Client Is Worth To Your Business?

The lifetime value of each client is defined as the total gross profit that you accumulate from a customer over their lifetime of doing business with you less the acquisition cost and marketing expenses over their lifetime.

When you know this value, you also know exactly how much money you can spend to acquire a client through marketing.

Do you realize the power that gives you as a small business owner? Did you know that by knowing your customer lifetime value, you can literally dominate your market and eliminate your competition in the minds of your clients?

What you need to know…

Most business owners know intuitively that it’s much easier to make an additional sale to a current client than it is to make that first sale that acquires that client. Unfortunately, they don’t do enough to figure out how they can sell more to their existing client base.

Why you need to know this…

It’s important to understand that a client who has had an exceptional experience with your product or service is naturally going to look to you to help them fulfill their other needs with additional products. They now trust you, and are happy with the relationship they have with you. You should take advantage of their trust and make an offer for another product/service immediately after their initial purchase, and schedule frequent campaigns to offer more to your client base.

The cost to you if you fail to act…

When your customers recognize that you provide them with value, they will continue to purchase from you. But, you can’t assume they will just call you up and ask you to sell them something. You have to make the effort to ask for their order.

So are you doing that?

Do you know how to do that?

Are you aware that all of this can be put on auto-pilot, and requires no further action on your part whatsoever?

This is easy to do and in most cases… costs you nothing except a little time to set it up.

How can you learn to develop these critical skills?

We’ll show you how. We’ll help you to develop these skills quickly and easily through our E-Learning Marketing System™ Coaching Program. In fact, we want to share our expertise with you and demonstrate our expertise.

For example, how would you like to fire the clients you hate to work with… and instead, build a successful business by hand selecting the type of clients you want to work with? With the help of our E-Learning Marketing System, we can help you quickly grasp this critical business fundamental and immediately apply its power to help you build your business to record heights. Listen to this exclusive webinar and we’ll unlock our vault to this proprietary members-only information.

To take a Test Drive on our system visit http://increaserevenueandprofits.com/guidedtour

To your success,

Tom Flowers

P.S. Please remember that at any time you feel ready and qualified to move forward and acquire the professional help that can enable you to build the business of your dreams, just click here and check out our E-Learning Marketing System™. It’s helping small business owners just like you get the answers and the help they need to build the business they have always wanted.

We created the E-Learning Marketing System™ with the perfect combination of online resources, tools and support to get you out of any financial distress you’re presently experiencing… help you get laser-focused on your highest income-producing activities… and help you develop and then apply the fundamentals that build multimillion dollar businesses. click here to see for yourself.

The True Value Of Sticky Customers

Posted by & filed under Build Business Value, Building Business Value, Business Owner, Business Valuation, Exit Planning, Seller Articles, Seller FAQ, Selling a Business, Valuation.

 

Can you exit your business if you’re in a declining industry?

The answers – according to CJ Whelan, who co-founded Adigo, a teleconferencing business, is yes — on one condition: you must have sticky customers.
In the absence of an innovative product, acquirers may still buy your business if you can prove you have a loyal customer base that is likely to keep buying years into the future. Adigo enjoyed churn rates of less than 5% per year, so easily attracted three competing offers.

In this episode, you’ll learn:

• Why happy customers could be your most strategic asset
• What churn is and how it impacts your value
• The one thing that makes a business attractive to multiple buyers

Listen Now

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If you’re interested in improving the value of your business, take our questionnaire or contact Colonial Business Brokerage today at 443-982-7332.

 

WP Curve Get Acquired By Go Daddy

Posted by & filed under Build Business Value, Building Business Value, Business Growth, Business Owner, Business Valuation, Exit Planning, Seller Articles, Seller FAQ, Selling a Business.

In 2013, Alex McClafferty co-founded WP Curve, a company that provided IT support for people with a WordPress site.

McClafferty and his partner stitched together a network of contract support professionals in developing countries and quickly grew the company. They hired a few managers, and by the beginning of 2016, McClafferty was already looking for an exit.

He wrote his goal down on an index card that hung in his office:

  1. All-cash offer
  2. Sell to a 3rd party

He asked around to see what his company might be worth and was disappointed by the initial estimates. Then internet giant GoDaddy approached McClafferty, indicating they wanted to grow their WordPress business and saw WP Curve as a perfect fit. In this episode you’ll discover:

  • The quirky visualization trick McClafferty used to get his employees to provide support customers could understand
  • “Outside In vs. Inside Out” thinking and how it can be the secret to winning the attention of a strategic acquirer
  • What an “attached rate” is and why it’s important to buyers
  • Two surprising reasons big companies buy little ones
  • How to avoid falling victim to the fishing trick
  • The biggest mistake first-time sellers make in dealing with corporate development professionals
  • Why non-linear scale matters

Listen now

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If you’re interested in improving the value of your business, take our questionnaire or contact Colonial Business Brokerage today at 443-982-7332.

The Secret To Great Marketing

Posted by & filed under Business Growth, Business Owner, Marketing, Small Business Marketing.

Previously, we discussed the purpose of marketing… to help facilitate your prospects’ decision-making process.

I also said there were two additional ways to view marketing’s purpose in simpler terms…

enter the conversation taking place in the head of your prospect
answer the number one question on your prospect’s mind… at just the right time

I then asked you to evaluate your marketing based on those critical criteria.

How did your marketing stack up?

I then offered to give you a hand with that evaluation using my Conversion Equation Evaluator that has the power to predict the future success of your marketing… both from a results and a financial standpoint.

Today, let’s discuss the three critical fundamentals of marketing that were highlighted in the video I asked you to watch.

Click here if you haven’t watched it yet.

The three fundamentals of marketing are…

  1. have something good to say
  2. say it well
  3. say it often

Let’s explore that first fundamental today… have something good to say.

This fundamental is neglected by virtually EVERY business owner on the planet.

To have something good to say means that your business MUST be unique when compared to all the others who sell what you sell.

You must be different… there must be something that separates your business from all of your competition.

Remember several emails ago I mentioned that most businesses all look and say the EXACT same things?

When businesses copy each other, it forces those businesses into price competition, because price then becomes the ONLY differentiator for prospects to consider.

It becomes the ONLY value proposition left to the prospects.

Any business that determines it isn’t unique MUST innovate so it does become unique.

Domino’s Pizza did this back in 1971.

Domino’s became a billion dollar behemoth in an overcrowded market back then.

Did Domino’s make the best pizza? Not even close!

Did they offer comfortable in-house dining like ALL pizza places did back in those days? No way!

Did they offer the largest selection on their menu? NO… they offered the exact same pizza as ALL of their competitors!

They dominated by having something good to say that was radically different back then when compared to ALL the other pizza franchises… fresh hot pizza delivered to you in 30 minutes or less!

But then Domino’s had to innovate in order to make good on that promise.

They specifically targeted hungry college kids living in crowded dorms (densely populated where few had transportation).

Domino’s went to small shopping centers located nearby the various college campuses and rented small storefronts just big enough to accommodate a pizza oven and a preparation counter.

One kid made the pizzas while another delivered them.

The result – Domino’s became a billion dollar behemoth in an overcrowded market.

You can do the EXACT same thing with your business.

And if you do, you will be well on your way to dominating your market, just like Domino’s did.

Next week, let’s discuss fundamental #2, say it well.

See you then.

Tom Flowers

P.S. Also remember, to determine how likely your marketing is to convert, simply fill out my Conversion Equation Evaluator.

This evaluator has the unprecedented ability to predict the future success of any marketing collateral you develop… as well as predict whether that marketing will be profitable or not. And, it’s 100% free to use!

After calculating your marketing conversion level, I can show you exactly what to do with your website and marketing collateral that could double or triple the number of prospects who respond to your marketing.

Just schedule a complimentary meeting with me.

The Backstory Behind E&J Gallo’s Acquisition of Barefoot Cellars

Posted by & filed under Build Business Value, Building Business Value, Business Owner, Business Valuation, Exit Planning, Seller Articles, Seller FAQ, Selling a Business.

Michael Houlihan and Bonnie Harvey built Barefoot Cellars to sales of more than 600,000 cases of wine per year when they got the attention of E&J Gallo, America’s largest winemaker.

Gallo was impressed with how quickly a $7 bottle of Barefoot moved off retailers’ shelves and were intrigued by Barefoot’s use of grassroots sponsorship to grow a national brand. Rather than compete with Barefoot, Gallo decided to buy the business. In this episode, you’ll learn:

  • Why the best goals are often set for you
  • How to use distributors to win the attention of an acquirer
  • The difference between a vanity and a strategic buyer
  • The single most important thing you need to do before you put your business up for sale
  • How to create a silent auction for your company

Listen now

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If you’re interested in improving the value of your business, take our questionnaire or contact Colonial Business Brokerage today at 443-982-7332.

Tackling Growth Delusions When Buying a Business

Posted by & filed under Business Owner, Buyer Articles, Buyer FAQ, Buying a Business.

There is no doubt about it, it can be exciting to buy a new business.  However, in the process, it is very important that you don’t become unrealistic about future growth.  Keep in mind that in the vast majority of cases, if a business is poised to quickly grow substantially, the seller would be far less interested in selling. 

Richard Parker’s recent article for Forbes entitled “Don’t Be Delusional About Growth When Buying a Business” seeks to instill a smart degree of caution into prospective buyers.  Parker notes that when evaluating a business and talking to the owner, many buyers come away with a sense that enormous growth is just “sitting there” waiting to be seized.  In particular, Parker cautions those buyers who are buying into an industry that they know nothing about; those individuals should be very careful. 

When buying into an industry where one has no familiarity, there can be a range of problems.  The opportunities that you see may not have been tapped into by the existing owner for a range of reasons.  You couldn’t possibly guess what these reasons might be without more of a knowledge base.  Since you are an outsider, you likely lack the proper perspective and understanding.  In turn, this means you may see growth opportunities that may not exist, as the seller may have already tried and failed.  Summed up another way, until you actually own the business and are running it on a day to day basis, you simply can’t make a proper assessment of how best to grow that business.

The seductive lure of growth shouldn’t be the determining factor when you are looking for a business.  A far more important and ultimately reliable factor is stability.  The real question, the foundation of whether or not a business is a good purchase option, is whether or not the business will maintain its revenue and profit levels once you’ve signed on the dotted line and taken over.  You want to be sure that the business doesn’t have to grow to remain viable.

As Parker points out, the majority of small business buyers will buy in a sector where they don’t have much experience, and that is fine.  What is not fine is assuming that you can greatly grow the business.  Of course, if new buyers can achieve that goal, that is great and certainly icing on the cake.  But don’t depend on that growth.

In the end, everyone has some ideas that work and some that don’t.  You may take over a business and, thanks to having a different perspective than the previous owner, are able to find ways to make that business grow.  But realize that many of your ideas for growing the business may fail completely. 

A professional business broker will be able to help you determine what business is best for you.  A business broker will help keep you focused on what matters most and steer you clear of the mistakes that buyers frequently make when buying a business.

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Whether you are looking to exit your privately held business, represent an acquisition-minded corporation, value your business, or are personally interested in owning or building value in your own company or franchise, Colonial Business Brokerage offers the professional services that successfully bring buyers and sellers together.

Copyright: Business Brokerage Press, Inc.

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Avoiding The Commoditization Rat Race To The Bottom

Posted by & filed under Build Business Value, Building Business Value, Business Owner, Exit Planning, Seller Articles, Seller FAQ, Selling a Business, Valuation, Value Builder System™.

Jean-Eric Plamondon was in the scrap metal business where the stereotypical operator is a shady character buying metal by the ton with a blow torch in one hand and a wad of cash in the other.
Plamondon decided he wanted to do scrap metal differently and discovered farmers were keen to clean up their land. Plamondon offered a full-service clean up wherein a crew would tidy up a farm and dispose of all of the excess waste — including the valuable scrap metal. Plamondon got so good that he was buying farmers’ metal for as little as $3 a ton and was turning around and selling it to a smelter for more than $100 a ton.
It was a license to print money, which is why, when Jean-Eric decided to get out, he was able to sell the business to his employees. In this episode, you’ll discover:
• How to re-position your company to eliminate competitors
• Where to go for advice when you feel overwhelmed
• Why possession is 9/10ths of the law in any negotiation
• The difference between a justice system and a legal system and what this means for your relationship with partners
• How to systematize your business
• What a vendor take-back is and what it means to the value of your company

Listen now

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If you’re interested in improving the value of your business, take our questionnaire or contact Colonial Business Brokerage today at 443-982-7332.

Want Your Marketing To Work… EVERY TIME!

Posted by & filed under Business Growth, Business Owner, Marketing, Small Business Marketing.

 

I hope you found the time to watch the marketing video I sent you last week.
It contains revolutionary information about marketing that may have a dramatic impact on your business moving forward.
Click here  if you haven’t watched it yet.

And if you did watch it, I deeply apologize about the fact that you will NEVER look at the FedEx logo the same way again 🙂

Today, I want to emphasize a few of the major points the video made, such as the actual purpose of marketing.

The video said it’s supposed to help facilitate your prospects’ decision-making process.

Remember last week I said that prospects shop value… NOT price.

I emphasized the fact that prospects are always looking for the best deal!

Well, that’s the purpose of marketing… to help prospects determine who is really offering them the best deal.

That’s “facilitating their decision-making process.”

But those are really big words, so think of the purpose of marketing in simpler terms.

It’s entering the conversation taking place in the head of your prospect.

Or here’s another way to look at it… marketing’s job is to answer the number one question on your prospect’s mind… at just the right time.

Now, compare your current marketing to this standard and see if it meets these critical criteria.

Look at your website and see if it does this.

For 99.9% of business today, it doesn’t even come close!

To determine how likely your marketing is to convert, simply fill out my Conversion Equation Evaluator

Once completed, you will know with 100% certainty whether your current marketing will be successful at converting prospects and closing more sales for your business… AND whether your current marketing will actually make you money or not!

If your marketing fails the evaluation process, you will know WHY… and you will know EXACTLY what to do to correct it so it never fails again.

After calculating your marketing conversion level, I can show you exactly what to do with your website and marketing collateral that could double or triple the number of prospects who respond to your marketing.

Just schedule a complimentary meeting with me.

Next week, let’s discuss the 3 fundamentals of marketing that will enable your business to begin to dominate your entire market while out-selling your competition.

Have a great week!