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Growth vs. Value: not all revenue is created equally

When you look ahead to next year, will your growth come from selling more to your existing customers or finding new customers for your existing products and services? The answer may have a profound impact on the value of your business. Take a look at the research coming from a recent analysis of owners who completed their Value Builder Score questionnaire. We looked at 5,364 businesses and found that the average company that had received...

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One Hidden Thing That Drives Your Company’s Value

You already know that your company’s revenue and profits play a big role in how much your business is worth. Do you also know the role cash flow plays in your valuation? Cash vs. Profits Cash flow is different than profits in that it measures the cash coming in and out of your business rather than an accounting interpretation of your profit and loss. For example, if you charge $10,000 upfront for a service that...

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What’s so special about the million-dollar mark?

If you're wondering when is the right time to sell your business, you may want to wait until your company is generating $1 million in earnings before interest, taxes, depreciation, and amortization (EBITDA). The million-dollar mark is a tipping point at which the number of buyers interested in acquiring your business goes up dramatically. The more interested buyers you have, the better multiple of earnings you will command. Since businesses are often valued on a...

Benchmarking Tools, Growing your Business, Scale your Business, Selling your Business

Why fire trucks always back in

Have you ever noticed that fire trucks always back into the fire hall? Why don’t they just pull into their parking spot snout-forward like the rest of us? Backing in at the end of a shift saves them time when they have to get to a fire. They back in to be ready; whether the call comes in 5 minutes or 5 days, they are prepared to pull out as quickly as possible. Like the...

Selling your Business, Valuebuilder

Subscribers Make Your Company More Valuable

Why are Amazon, Apple and many of the most promising Silicon Valley start-ups leveraging a subscription business model? Subscribers not only provide steady revenue; they make your company more valuable in the eyes of an acquirer. In a traditional business, customers buy your product or service once and may or may not choose to buy again; but in a subscription business, you have "automatic” customers who have agreed to purchase from you on an ongoing...