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