When it comes to your liquidity event, do you know how to maximize your enterprise value?
Most business owners should know how to maximize enterprise value but don’t.
After all, you have one chance to get it right, and you better make it count.
Conventional wisdom has you believe that the liquidity event creates enterprise value. Conventional wisdom is wrong.
The enterprise value at your liquidity event is like looking in a rearview mirror. Instead, enterprise value is from the preparation done years before your liquidity event.
Yes, you read that right. Your enterprise value comes from the depth and quality of your preparation.
Whether you have a liquidity event in a year or ten years, your preparation is what determines value.
Who am I, and how do I know?
I was that kid who started his eLearning company right out of school with no money, experience, or team. I failed forward every day. My saving grace was my grit and determination, which had me stay in the game to create a successful company.
With success came a 7-figure offer based on 3-times EBITDA. Something didn’t feel right. I said “no” to the 7-figure offer and “yes” to mastering the art and science of a liquidity event.
Two years later, I said “yes” to a 9-figure offer based on 13-times EBITDA.
My enterprise value increased 10X despite having the same company, people, and service.
What made the difference?
I created a 9-step road map to prepare my company for a liquidity event. The 9-step road map gave me the certainty to capture the maximum value.
Each of the 9-steps is crucial for preparation and increasing enterprise value. Within the 9-steps are five important preparation strategies.
Do you know the first of the preparation strategies to increase enterprise value?
How A Thriving Culture Leads To A Thriving Enterprise Value
Culture eats strategy for breakfast – Peter Drucker
When it comes to your enterprise value, show me your company culture, and I’ll tell you your future.
Read and prosper from “Company Culture: Why You Need It To Achieve Massive Success.”
Your company culture is as unique as a fingerprint. Your competition can copy everything you do except for your culture.
Enterprise value is as much art as it is science. A thriving company culture leads to a thriving enterprise value.
Your company culture is as essential to a strategic buyer as it is to a financial buyer or family office.
Your company culture is an indicator of:
- The strength of your company vision and mission
- Ensuring everyone in your company is on the same page
- Helping to attract and keep the best talent
- How you differentiate your company from competitors
- Creating more profits
In other words, your company culture is your secret sauce for success in the marketplace.
Money buys many things, but money cannot buy a thriving culture.
Your company culture creates a feedback loop as follows.
A thriving culture has employees happy and motivated.
Happy and motivated employees lead to happy customers.
Happy customers become raving fans and make your employees happy.
Think of your culture as the oxygen your business needs to thrive.
Your future buyer knows what your business did yesterday and today. Your buyer needs to know that your company continues to perform tomorrow.
A thriving company culture is an indicator of a bright future.
During your liquidity event, your mission is to communicate your thriving company culture. Don’t be shy.
You’ll also need a thriving company culture for your next preparation strategy.
Do you know what it is?
Leveraging X-Factors To Insanely Increase The Value Of Your Business
Big doors swing on little hinges – W. Clement Stone
Step two of the 9-steps is all about X-Factors to insanely increase enterprise value.
One of the many X-Factors is the future growth of your business.
Remember, your future buyer knows what you did yesterday and today. Your future buyer wants to know what you’re capable of tomorrow and beyond.
What do you think buyers prefer:
A company that’s squeezed out every penny of profit, or a business with growth potential?
Buyers will increase your enterprise value when you have an enormous upside.
How do you create more growth?
Go back to the beginning of when you started your company. At that time, you found a problem you were passionate about solving. The problem was painful for many people who were happy to pay you to take their pain away.
Most business owners stop solving new problems when their businesses are thriving.
Part of your preparation is exploring how you can solve new problems for customers.
Your goal is to put yourself out of business with your new solution by creating a market disruption.
When you create a market disruption, your revenues and profits soar. Keep your profitable company forever, or sell it tomorrow. You choose, and either choice is a great one.
The bottom line is the bottom line. Communicate how you’ll grow to your future buyer and watch your enterprise value rise.
Speaking of buyers, do you know what you must do before saying, “I do?”
Why You Must Know More About Your Future Buyers Than You Do About You
You won’t learn if you think you already know everything – Robert Kiyosaki
Maximize your enterprise value by knowing more about your buyer than you do about you.
Most business owners make two costly mistakes:
- Only caring if the buyer’s check clears the bank.
- Believing the enterprise establishes itself during the liquidity event.
Your future buyer will buy your company to solve a painful problem.
Spend your time and effort getting to know everything that you can about your future buyer. Along the way, you’ll uncover the motivations of the interested buyers.
Once you know why a buyer wants to buy your company, you can craft your message and strategy. The more you prove how you can solve a buyer’s problem, the higher your enterprise value.
In our 90-day Deep Wealth Experience, step three of our 9-step road map focuses on your future buyer. Knowing the motivations of a buyer gives you half the picture.
The other half is determining if there is a cultural fit. The buyer with the highest offer may not be the best buyer for your business.
Now that you’ve captured the buyers’ imagination, it’s time for you to decide which buyer has the best fit.
How do you determine which buyer has the best cultural fit?
The Deep Wealth Experience teaches you how to run a reverse RFP process. At the end of the process, you’ll know which buyer has the best cultural fit.
Spending the time and effort to know your future buyer goes a long way to increase your enterprise value.
Catapult Your Enterprise Value By Discovering The Hidden Rembrandts In Your Attic
Share your unique talents with the world, and you unlock the door to fulfillment and success. – Jeffrey Feldberg
Do you want to catapult your enterprise value?
Discover the hidden Rembrandts in your attic and share them with the world.
A fatal mistake most business owners make is assuming they’re the same as the competition.
Step eight of the Deep Wealth Experience focuses on helping you find your deep wealth.
Success is not an accident. Every successful company is world-class in certain areas. Most business owners take for granted what makes their businesses successful.
Your business is doing something unique that makes it world-class. Identify what you’re world-class in, and you’ve found a hidden Rembrandt in your attic.
It’s your hidden Rembrandts that make your liquidity more appealing. In the process, you’ll also increase your enterprise value.
As the saying goes, ‘if you can’t beat them, buy them.’
If your future buyers could do what you are already doing, they wouldn’t buy your company.
Sharing your Rembrandts with your future buyer also demonstrates your strategic fit.
Most business owners assume that a strategic buyer looks for a strategic fit. The truth is all buyers look for a strategic fit. Regardless of the buyer, a strong strategic fit leads to a higher enterprise value.
Yet another reason to know your future buyer better than you know yourself.
The takeaway is to find your hidden Rembrandts in the closet and take this to the world. You’ll have a better company for it, and along the way, you increase your enterprise value.
Next up is the one area that will make or break your liquidity event.
Skyrocket Your Enterprise Value When You Have The Right Story And Negotiating Capability
Tell me a fact, and I’ll learn. Tell me a truth, and I’ll believe. But tell me a story, and it will live in my heart forever – Ed Sabol
How do you skyrocket your enterprise value heading into your liquidity event?
- Craft a compelling story about your business
- Tell the story
- Negotiate the story
With the help of the Deep Wealth Experience, you craft the story. Next, you assemble the people and platform to tell the story. Executive team members each share parts of the story.
It’s vital that your company knows the same big picture. Your employees and customers hear the same story.
Your Cracker Jack negotiators have that story that as negotiations take place.
You are the world’s expert on your business. You have the answers but don’t know the questions to ask.
The 9-step road map highlights where your business has been and where it’s going. Through the 9-step road map, you identify the next steps that welcome growth. The 9-step road map helps you create your category to dominate and win.
Your story is not fiction. You have the facts and data woven into your story to support your point of view.
Your advisory team has a track record of success in liquidity events. The 9-step road map arms you with the knowledge of how to select the right advisors.
All too often, business owners drop the ball in negotiations and accept a less than the ideal offer.
As the saying goes, when the team works, the dream works. Your advisory team leads the way in negotiations to help you capture the maximum value.
The goal of an exit or liquidity event is to maximize your enterprise value.
Most business owners make fatal mistakes heading into and during the liquidity event. The result is a lower enterprise value.
In other words, business owners leave money on the deal table for the benefit of the buyer.
In my liquidity event journey, I said “no” to a 7-figure offer and “yes” to mastering the art of preparation.
My journey had me create a 9-step road map of preparation, and at the same time, say “yes” to a 9-figure offer.
Had I accepted the first offer I would have left most of my enterprise value on the deal table.
The 9-steps gave me the certainty to capture the maximum enterprise value.
Most business owners aren’t as fortunate. Today my mission is helping business owners level the playing field. The 90-day Deep Wealth Experience, grounded in the 9-step road map, is how I help business owners.
Maximizing enterprise value is as much art as it is science. Preparation is the glue and rocket fuel that maximizes your enterprise value.
The best time to prepare was years ago. The next best time is today. Whether your liquidity event is in one year or ten years, the time to prepare is today.
While you can’t time the market, you can time when you go to market. Preparation creates choices. Keep your profitable business forever, or sell it tomorrow. Either way, you win.
You have one chance to get it right on your liquidity event. Make your liquidity event count through preparation. Preparation gives you the certainty to capture the maximum enterprise value.
You can do it. I know you can.
Here’s to you and your success.
Your Raving Fan,