Ratios are important!
Doctors in the developing world measure their progress not by the aggregate
number of children who die in childbirth but by the infant mortality rate, a
ratio of the number of births to deaths.
Similarly, baseball’s leadoff batters measure their “on-base percentage” –
the number of times they get on base as a percentage of the number of times they
get the chance to try.
Acquirers also like tracking ratios and the more ratios you can provide a
potential buyer, the more comfortable they will get with the idea of buying your
Better than the blunt measuring stick of an aggregate number, a ratio
expresses the relationship between two numbers, which gives them their power.
Here are some of the many ratios that an acquirer may look at when analyzing
1. Employees per square foot
2. Ratio of promoters and detractors
3. Sales per square foot
4. Revenue per employee
5. Customers per account manager
6. Prospects per visitor
7. Prospects to customers
Acquirers have a healthy appetite for data. The more data you can give them –
in the ratio format they’re used to examining – the more attractive your
business will be in their eyes.
Justification for Your Next Vacation
A recent survey by The Sellability Score found companies that would perform
well without their owner for a period of three months are 50 percent more likely
to get an offer to be acquired when compared to more owner-dependent businesses.
There is no better justification for taking a blissful, uninterrupted holiday
than to see how your company performs in your absence. The better your company
runs on autopilot, the more valuable it will be when you’re ready to sell.
To gauge your company’s ability to handle your absence, start by taking a
vacation. Leave your computer at home and switch off your mobile. Upon your
return, you’ll probably discover that your employees got resourceful and found
answers to a lot of the questions they would have asked you if you had been just
down the hall. That’s a good thing and a sign you should start planning an even
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
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 Sellability Score questionnaire. We looked at 5,364 businesses
and found that the average company that had received an overture from an
acquirer was offered 3.5 times their pre-tax profit. When we isolated just the
businesses that had a historical growth rate of 20 percent or greater, the
multiple offered improved to 4.3 times pre-tax profit, or about 20 percent more
than their slower growth counterparts.
However, the real bump in multiple came when we isolated just those companies
that claim to have a unique product or service for which they have a virtual
monopoly. The niche companies enjoyed average offers of 5.4 times pre-tax
profit, or roughly 50 percent more than the average companies, and fully 20
percent more than the fastest growth companies.
How "Sellable" Is Your Company?
Discover How to Spend Less Time
in Your Business and Enjoy More Freedom, All While Building an Asset You Can
Sell Down the Road
The Sellability Score Online
Take the 13-minute, 100% confidential assessment and we’ll perform a
detailed cat-scan of your business, revealing insights on…
• How sellable your business is right now based on dozens of key
• How you can immediately start reducing the number of hours you
spend in your business, while building an asset you can sell down the road.
• Overlooked areas of your business that can be more effectively
automated, delegated, and systemized – resulting in more freedom for you
right away, and making your business more attractive to potential buyers
when you’re ready to sell.
• Simple tweaks you can make in your business that will generate
more cash flow, free up more of your time, and increase the sellable value
of your business.
Should Be Working Less, Not More, If You Want to Sell Your Business Someday…
make the mistake of thinking they need to put in 80 hours a week year after year
if they’re going to build a business that someone will want to buy one day.
The truth is,
potential buyers are looking for businesses that can thrive without their
owners. After all, once they buy your business, you’ll no longer be available to
put in those 80-hour workweeks, right?
Sellability Score software will perform a detailed analysis of your business and
show you the steps you can start taking today to build a business that will
thrive without you. You can start spending less time in your business right
away, and enjoy the freedom you’re after sooner rather than later. At the same
time, you’ll be building a valuable asset that will continue to thrive and grow
well after your exit.
business analyzed now, and uncover the customized tweaks you can start making to
unlock more freedom in your business: