| At least once a week a dealer will ask me what I | | | | carriers, they diversify their business to the point of |
| think his business is worth. A business broker friend | | | | having very little leverage to negotiate or receive |
| of mine tells his clients that "your business is only | | | | additional support because they demonstrate no |
| worth whatsomeone else is willing to pay for it ... and | | | | loyalty in return. In most cases, we recommend that |
| that may be a whole lot less than you thought." | | | | dealers pare back the number of products and |
| Concerns over decreasing values of wireless | | | | carriers they representas a means to INCREASE their |
| businesses are real but don'thave to be cause for | | | | sales and profitability. |
| panic. Unfortunately, the days of getting multiples of | | | | Expenses |
| revenuewith a cursory glance of the balance sheet | | | | Are your expenses in line with revenues? A major |
| are gone. | | | | red flag goes up if yourtrend shows expenses |
| The failure of so many "dot-coms" has given new | | | | growing faster thanrevenues. This signals trouble to |
| meaning to the words, duediligence. The process has | | | | potential buyers. Look at your key expenses as a |
| become much more complicated and the | | | | percentage of revenues and compare them with the |
| computations much more intricate. The factors that | | | | last two years. Keeping fixed and variable expenses |
| now determine the overall "worth" of a business in | | | | in line is critical to business valuation. |
| today's climate reach well beyond the scope of the | | | | Revenue Areas |
| businesses' bottom line. | | | | Today, most buyers are interested inbusinesses that |
| Our organization doesn't sell businesses, but we do | | | | are growing. If your sales and margins have been |
| help them get ready to sell. The good news is that | | | | steadily increasing, you pass the first test. Next |
| there are steps you can take to dramatically increase | | | | comes alook at whether your manpower levels are |
| the value of your business. The criteria and questions | | | | appropriate and productive. Retention and experience |
| below represent a great exercise for all businesses, | | | | counts too, as expertise is valuable to both |
| regardless of whether they are considering looking | | | | customers and buyers of your business. What are |
| for a buyer or not. | | | | your "costs of sales" as a percentage of revenue? |
| We find that most businesses don't really know the | | | | There are a lot of things you can be doing to drive |
| answers to a lot of the questions, but some can | | | | sales up in your operation from providing sales |
| quickly double or halve the perceived value of their | | | | training to performing sales meetings. A management |
| business in the mind of a potential buyer by putting | | | | and motivation process similar to the popular CDI |
| some relatively simple practices into place. These | | | | Beat Your Best (TM) program demonstrates |
| items are critical to the overall health of the business. | | | | structure, measures results and adds value. |
| When someone asks usto help a business increase its | | | | Customer Base |
| net worth, we begin by looking at the following | | | | One of your most valuable assets isyour customer |
| areas: | | | | database. The number of "active" customers and the |
| Profit & Loss Statements | | | | average value of a relationship over time are key |
| Most financial analysts will look at the "quality" of | | | | ingredientsfor determining the "worth" of a business. |
| your data and "trends" overthe last two or three | | | | Thus, the business with processes and procedures |
| years to determine if your business is on the rise, or | | | | for maintaining and growing customers over time are |
| on the"demise." First they'll look at the bottom line to | | | | worth more. These are some of the most important |
| see if there is one. Then they'll lookfor trends, and | | | | criteria for determining a business's worth and we |
| most importantly, if your net profit as a percentage | | | | could certainly spend a lot more time on each |
| of revenue is rising or falling. The final test is to | | | | category and how to build it. Other items such as |
| determine if the percentage is healthy enough | | | | fixed assets, real estate, infrastructure and recurring |
| tomake a buy recommendation to a potential | | | | revenue streams are also important considerations. |
| purchaser. | | | | This outline will provide you with the basis for |
| Portfolio of Products and Services | | | | creating a written plan for improving each one of |
| Do you have a mix of products that makes sense | | | | these areas. Buyers today are a lot more critical |
| for your business? Is each category profitable? Some | | | | about the value they place on your business. The |
| dealers think they need to carry every wireless | | | | more you can do to impact each of these areas, the |
| carrier to be able to serve the needs of every | | | | more your business will be worth to a potential suitor. |
| customer that calls or walks in. This is more often | | | | As my friendsays: "Your business is worth exactly |
| than not a very unprofitable way for a dealer to go | | | | what someone else is willing to pay for it." Now that |
| to market. Instead of having an outstanding | | | | you have a better look at what someone else will |
| relationship with one or two manufacturers or | | | | see, "what's your business really worth? |