Grow Your Business Without Giving Up Equity
Ever wondered how private equity investors grow their portfolio companies? Their goal is simple yet ambitious: triple the value of a small business in 3–5 years before selling it to a strategic buyer or another private equity fund. Why the rush? Their investors expect a hefty 15–20% annual return on their money. So, what do […]
Should You Grow Your Business or Stay Small?
Most business owners talk about growing their companies. In fact, Bank of America’s 2024 Business Owner Report shows that 87% of medium-sized businesses expect to grow. But here’s the catch: many business owners don’t truly want growth. What they actually want is a good income and a balanced lifestyle. And guess what? There’s nothing wrong […]
Be Your Own Private Equity Firm
As a young investment banker, I grew up inspired by the legendary leverage buyout (LBO) stories of the 1980s. One of my favorites was Barbarians at the Gate, which chronicled the 1989 bidding war for RJR Nabisco. The deal ended when Kohlberg Kravis Roberts & Co. (KKR) “won” with a staggering $31 billion bid —nearly […]
Four Ways for Selling Your Strategy to Potential Investors
Following last week’s blog on “Fixing Your Financials”, Selling Your Strategy is the second of five grooming strategies. You should execute as many of these as you can when preparing your Buyable Business for an equity harvesting transaction. Selling Your Strategy is made up of seven tactics, the four of which are the subject of […]
Fixing Your Financials to Make Your Business Buyable
In my upcoming book, that I will reveal soon, there is a chapter about grooming a business for sale including 5 strategies. The first of these I call: Fixing Your Financials. Here are the four areas to focus on to cover this strategy. Provide Three Years of Financials The financial statements are the first and […]
Grooming Your Business
Here is a real-life story about what grooming your business looks like. János Gréczi is the quintessential self-made entrepreneur. He started importing apparel and nonalcoholic beverages after the fall of the Iron Curtain, and over time he developed the latter concern into a full-fledged beverage distribution business. Later he invested in production equipment using government […]
Three Ways to Build a Business
I believe there are three ways to grow a company. Each is valid and a fit for a different type of entrepreneur. Each has the potential to make a business buyable. Let’s look at each approach in turn. Build Your Business by Buying a Franchise The first approach is the “franchise prototype way,” advocated by […]
Are You Building a Buyable Business?
As you may have guessed a “Buyable business” is a company that others find valuable and would want to buy. Doesn’t that seem redundant? Why should anyone want to build an “unbuyable’ business? Why would they want a business that does not come across as valuable and desirable to others? Who would want to own […]
