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Redtail Capital - Unlocking Business Value

 

Your Exit GoalsBusiness Exit OptionsBuilding Business ValueBusiness Exit ProcessWhy Choose Redtail Capital?

Considerations

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 business.

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 your company:

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 longer vacation.

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 services?

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 Assessment Tool

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 sellability factors.

•  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.

Why You Should Be Working Less, Not More, If You Want to Sell Your Business Someday…

Many people 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?

The 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.

Get your business analyzed now, and uncover the customized tweaks you can start making to unlock more freedom in your business: