Making your company irresistible

You know the investment mantra: Buy low, sell high.   The same rule applies to the biggest investment a small-business owner is likely to make: his or her own business.

In investments on the stock market, chance plays a big part in how your investments go. No time has that been more evident than in the latter part of this decade, particularly in 2007 and 2008, when stock values plummeted.
As a business owner, you don’t want to leave the value of your company to chance. And you don’t have to.

financeMy white paper, “How to Increase the Value of Your Company: Benchmarking and Rules of Thumb to Prepare Your Company for a Profitable Sale,” explains how to maximize the value of your privately owned company by implementing a level of professionalism that will make it attractive to potential buyers who will see a thriving, well-run company poised for continued prosperity. They’ll see a winner.

It adheres to the same rules and principals you’ll find in my book, How to Sell Your Privately Owned Business, with additional focus on preparing your business and getting it in top working order before you offer it for sale.

It all starts with six ideas to implement professionalism, and finishes with a set of “rules of thumb” for public relations. In between you’ll find solid advice on implementing accounting procedures, operations and human resources policies. Those are all real-world issues that a growing company will encounter and which can produce unwelcome surprises if you’re not prepared.

These guidelines are applicable to the success of any business, but they are especially  crucial to selling your company for top dollar.
I’ll have more information about this paper in coming weeks.

Eric R. Voth is a serial entrepreneur, a private investor, consultant, and writer. He is author of How to Sell Your Privately Owned Company, a Basic Guide for Independent Business Owners, Baby Boomer’s Edition. Eric and his colleagues help a business Seller prepare and groom his or her company prior to offering it for sale or merger – then guide the owner through the actual process. He became involved in this field as a result of merging his own company in 1993.

Hot off the press

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Copies of How to Sell Your Privately Owned Company are available now!

The book is available in several formats, including traditional print and PDF formats (Read-only PDF or printer-enabled PDF formats both available).

We’re also offering free of charge sample sections of the book in downloadable form here.

Buying How to Sell Your Privately Owned Company also entitles you to two FREE bonus reports:  The Agenda for a Successful Sale or Merger … and What to Expect when Working with a Merger & Acquisition Professional.

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Twitter Envy

You’ve seen it before. For years you’ve nurtured your private company, watched it struggle and, if you’re talented enough and hardworking enough (and a little lucky), succeed. Then you see these overnight upstarts that seem to just take over the world. Think about Google. Or, more recently, Facebook or Twitter.

Robert Scoble’s blog speculates that Twitter “actually worth five to 10 billion dollars.”

No doubt you know of examples from within your industry.

It’s enough to give a small-business owner Twitter Envy.

But for every dot-com boom there are hundreds of busts – remember the spectacular dot-com collapse of 10 years ago?  Of course the lingering effects of this Great Recession are still fresh in our minds.

This speculation of mind-numbing “market value” numbers brings a point for you, the small-business owner. By all means, you want to put a dollar value on your business, but there’s a right way to do that and you want to be careful not to get too caught up in speculation. After all, nobody knows if Twitter is actually making any money at this point (it almost certainly is not – yet).

I’m inclined to agree with this comment on The Industry Standard by Fred Wilson: “On one hand, I think the transparency into the world of private investments is good. Entrepreneurs benefit from having their companies discussed and valued in ‘the market.’

“But I think all the focus on what a company is worth can be bad. These companies are private for a reason. Most of them aren’t mature enough to be public companies. They often don’t have full management teams and some don’t even have revenues. The focus inside these companies needs to be on building the company, the product, and the business. And endless discussions about what their company is worth can be terribly distracting.

“I saw this in action back in the late ’90s when a bunch of our portfolio companies went public before they were ready. The employees spent too much time focused on the stock price and too little time focused on the business. Many employees starting counting their net worth in stock that was not liquid and eventually was worth pennies on the dollar of what they thought it was worth.”

Chances are your company will never go public. So dreams of exploding like Twitter or any Wall Street IPO will remain just dreams. But as you contemplate plans for the future such as selling your company, you need to have an idea of what your company is actually worth. Which brings us to my book, How to Sell Your Privately Owned Company, Baby Boomer’s Edition.

Chapter 3 – Putting a Price Tag on Your Business – offers a comprehensive guide to setting the right price for your business, a price that will be fair to you and attractive to potential buyers.

Eric R. Voth has been a successful business owner and seller since the 1970s. Among other enterprises, he is currently owner of ERV Productions Inc., and author of How to Sell Your Privately Owned Company.