The text discusses the planning fallacy, where business owners, lured by potential valuations, overlook the rigorous effort needed for substantial growth. It emphasizes that achieving a significant increase in company value requires realistic planning and commitment, supported by trusted advisors, rather than merely hoping for the best outcomes.
To ensure business growth, monitor stagnation signals like flat revenue and declining customer satisfaction. Evaluate competitor performance, customer feedback, and buying trends of top clients. Embrace modern technologies and leverage trade shows for innovation. Address hiring challenges and consider advisory support to identify and capitalize on untapped opportunities.
Business Goals Goals are typically focused on a particular outcome and so should be specific. It’s worth the time to get into the details. If you intend to increase the company’s cash flow, how will that be done? If it’s by boosting sales, what has to change to make that happen? You could add a new product… Continue reading Goals and Resolutions
With the help of her Exit Planning Advisor, Sarah has decided that selling to a third-party buyer would best accomplish all of her goals (financial, values-based, legacy). Quantifying her business and personal resources with a financial gap analysis has been helpful to Sarah in determining her departure date in six years. She now knows the current… Continue reading Strategic Exit Planning: Deal Momentum, Deal Fatigue, and Pre-Sale Due Diligence
Cash flow normalization is done with the intention of identifying Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) or Seller’s Discretionary Earnings (SDE). These differing measures are not interchangeable but are used by different classes of buyers for different categories of acquisition. Free cash flow is an important measure when calculating the value and price for any business. It is the amount theoretically available for servicing acquisition debt, working capital, return on investment for any cash outlay in the acquisition, and future expansion.
FPA Owner Transitions 