Here’s an interesting take on understanding the strategic value of your business.
Let's imagine for a moment that you're looking to sell your home.
Say you live in a nice three bedroom house in a nice suburb. So of course, you're looking at all the comparable properties to understand what your house is worth.
But imagine for a moment that you've got a Rembrandt in your attic.
Now, of course, if you didn't know it was there or you thought it was just some old painting, it would make no difference.
But when you know it's there, and you know what it's worth, it massively changes the value of that property.
It's a little bit the same with your business, there could be something that is of strategic value in your company that you haven't realised yet. And until you look at your business through the eyes of an acquirer, you may be missing those real nuggets of gold.
Strategic Business Value: How Dun and Bradstreet found a Rembrandt in Bobby Martin’s Business
Take for a moment Bobby Martin. He ran a market research company that was turning over about five to $6 million. Now, these businesses usually trade around about a one times revenue, so you would expect him to achieve a valuation around that level.
Fortunately, for Bobby, he sold his business for $26 million to Dun and Bradstreet!
And why is that? Because they found the one Rembrandt in his business that they were looking for. And in this case, it was recurring revenue.
So if you don't know what the Rembrandt is in your business, reach out and let's start a conversation. We'd love to help you discover what's going on and how that strategic value can be harnessed for yourselves.
At Exit Advisory Group we help entrepreneurs maximise company value and exit at the top of their game.
We do this by giving business owners the tools and strategies to design more profitable, efficient and enjoyable businesses to own - that are also less dependent on them. When they choose to exit, they are in the best position to unlock the wealth in their business and be rewarded for their hard work.
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