PLAYING DOWN THE CHESSBOARDTM

The Magic Window

I was visiting with a business owner and friend this afternoon. His business is growing. He has been approached by buyers. He recognizes his personal strengths lie in the early stage and early growth period. He knows the current business “has legs.” He has additional ideas for new businesses. I drew this picture of the Magic Window, the phase where … Read More

Business Trajectory – Un-realized potential

What do each of the businesses represented in this doodle have in common? . . . un-realized potential. Many of the businesses we work with have long-term owners and fairly stable business dynamics.  This typically means the owner is living a decent life-style.  We find many businesses are steady and predictable which is often comforting to the owner.  Unfortunately, the … Read More

20 in 100 or 1 in 100?

The attached Venn diagram depicts the reality of business sales in the United States. I was recently reading a solicitation for a seminar “The secrets of Exit and Succession Planning.” It stated, “Of all the businesses that go on the market for sale each year in the U.S., only about 20% actually sell.” The pitch . . . attend and … Read More

“WHY NOT” and “HOW”

“Insanity: Doing the same thing over and over again and expecting different results.”  Albert Einstein I am often confronted by employees, mostly managers and supervisors, who can explain “WHY NOT.” “You have to understand . . . blah, blah, blah.” If you accept those explanations you are condemning yourself to Einstein’s definition of insanity. Force your managers to come to … Read More

Is Selling in My Best Economic Interest?

A client recently told me that his employees were concerned about my work on his behalf.  I was originally hired to help him navigate a sale of the business.  They were concerned that we were still pursuing a sale and the consequences for them.  (I will explain in another post why I told the banker who introduced us that the … Read More

Employees on the Fence

I was recently at a client speaking with the owner and the Marketing Manager.  We have been restructuring the company to position it for growth. The company had a number of homegrown managers and supervisors and a toxic culture had accumulated over a number of years.  Most of the employees kept their heads down to avoid conflict which resulted in … Read More

Work Less . . . Live More

I recently completed a valuation and business prospects analysis for a client who told me his goal was to spend more time investing and managing commercial real estate. As we wrapped up our discussion of the business analysis, I drew him this picture to encourage him to consider the notion that he could continue to enjoy the benefits of ownership … Read More

Valuation Method #1: Re-thinking Multiple of Earnings

One of the most common methods investment bankers and business brokers use to value companies is called the multiple of earnings approach.  They use past transaction data to arrive at a composite average “multiple” that they apply to businesses with similar revenue and earnings. Digging just below the surface, business owners should re-think the reliance they place on this method.  … Read More