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Year: 2017

6 Reasons Not To Diversify Your Business

How does the blender manufacturer Vitamix get away with charging $700 for a blender when reputable companies such as KitchenAid make blenders for less than half of that?

 

It is because Vitamix specializes in one thing, and they do it better than anyone else.

 

WhatsApp was just a messaging platform before Facebook acquired them for $19 billion US. Go Pro produces the best helmet mounted video cameras in the world. These companies stand out because they poured all of their limited resources into one big bet.

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Posted in Business Planning, Value Builder

How Much Goodwill Do You Have in Your Company?

The term “goodwill” is often used in conversation as a subjective description of how much your customers like your business.

However, in valuing a business, there is nothing subjective about the definition of goodwill. It is the difference between what someone is willing to pay for your company minus the value of your hard assets.

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Posted in Business Planning, Value Builder

5 Reasons Now Might Be The Right Time To Sell

Are you trying to time the sale of your business so that you exit when both your business and the economy are peaking?

 

While your goal to build the value of your company is admirable, here are five reasons why you may want to sell sooner than you might have planned:

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Posted in Business Planning, Planning, Value Builder

Is the Year You Really Increase the Value of Your Company?

If you have resolved to make your company more valuable in 2017, you may want to think hard about how your customers pay.

If you have a transactional business model where customers pay only once for their purchase, expect your company’s value to be a single-digit multiple of your pre-tax profit.

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Posted in Business Planning, Value Builder

Why Now Is the Riskiest Time to Own Your Business

Most people think of starting a business as risky, but unless you invest a significant amount of start-up cash in your venture, you’re not really risking much other than your time.

That changes if you’re lucky enough to get your business off the ground. As your company grows, you start to risk more and more of your wealth because the business you’ve built is actually worth something. The longer you hang on to it, the more you have to lose.

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Posted in Value Builder

3 Surprising Reasons To Offer A Subscription

You can now buy a subscription for most consumer products from dog food to flowers. Music subscription services are booming as our appetite to buy tracks is replaced by our willingness to rent access to them. Starbucks now even offers coffee on subscription.

Why are so many companies switching to a subscription business model? The main reason is that recurring revenue increases the value of your business, but there are some other, less obvious, benefits to add a subscription offering to your business.

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Posted in Business Planning, Planning, Value Builder

Growth vs. Value: Not all revenue is created equal

When you put together next year’s financial plan, 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.

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Posted in Business Planning, Value Builder

Six ways to profit from your vacation this summer

Summer is here, and although it may seem strange, now may be the perfect time to increase the value of your company.

 

The most valuable companies are the ones that can run independently of their owner. A buyer will pay a premium for a company that runs on autopilot and levy a steep discount for a business that is dependent on its owner.

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Posted in Business Planning, Value Builder

Cash Flow Questionnaire

Gravity Consulting Cash Flow Questionnaire

Posted in Cash