There may come a time that you want to bring investors into your business. You may want investors to provide money, or expertise, or a combination of the two. Yes, you will need a business plan, but the process always begins with a conversation. This article is about that conversation. Having participated in hundreds of them, I have noticed that investors want five questions answered early, before they put a lot of time into detailed analysis of your offer. It is highly unlikely that they will even look at your business plan, let alone invest in your business, until you have answered the five questions...

VALUATIONMartin HollandApril 27, 2017BUYERS, INVESTORS, BUSINESS PLAN, EQUITY, RISKComment

How to Think Like Business Buyers

The value (price, if we’re selling) of a business is what a willing buyer and seller agree it to be. However, assuming both parties are informed and rational, the value of most small businesses is calculated by multiplying annual profit times a “multiple.” The multiple is a number that reflects buyer confidence and often falls between one and seven. So, for example, a business with annual profit of $100,000 at a multiple of two would be worth $200,000.

VALUATIONMartin HollandMarch 27, 2017EBITDA, MULTIPLE, BUYERS, SELLERS, DEPRECIATION, AMORITIZATION, PROFIT Comments

How to Change Reality

“Are you sitting down?”

It was our new regional salesman, Frank, talking to a customer on the phone.

“I’ve got pricing for you, and I just want to be sure you’re sitting down when I tell you.”

I was in Georgia to find out why Frank was struggling, and it was apparent. The quote was for a small commercial job, but Frank thought $10,000 was a lot of money. It showed.

GUIDANCEMartin HollandMarch 24, 2017REALITY, BELIEFS, SELF TALK, ENVIRONMENT, SKILLS, VALUES, PAIN, PLEASUREComment

The Most Important Number in Business

“What would it take to double your profit?” I was talking to Brent, a contractor. We had rearranged his income statement, and his margins were visible for the first time.

“What do you mean?” he asked.

“I mean, based on last year, how much more would you have to sell to double your net profit?”