| You have assets that you can sell, but I'm here | | | | therefore, if your goal for 2008 is to grow the biz |
| to tell you that you aren't selling or buying "hard | | | | by 40%, then you could still decrease the value |
| assets". Heck, you can buy equipment anywhere, | | | | of the business, or even reduce it's profits. Most |
| anytime. You're really selling or buying "soft | | | | companies who make the Inc. 500 fastest |
| assets"; your ability to build a team, sell, market, | | | | growing companies lose money! In the two years |
| satisfy, create relationships, forge loyalties, make | | | | my companies would have made the Inc 500 list, |
| a profit and grow the business. | | | | we lost money. |
| In the Minnesota market, I would say that most | | | | Realize that businesses generally sell on multiples |
| businesses I've seen for sale are overpriced | | | | of earnings, which is much more complex than |
| because somewhere, someone is saying "my | | | | just profit! |
| company is worth one year's gross sales" Some | | | | The easiest way to think of this is to think about |
| of this is encouraged by business brokers who | | | | a risky investment. Let's say a company made |
| don't understand the green industry. They make a | | | | $50,000, but generated $75,000 in cash flow last |
| percentage off of the price of the sale, therefore, | | | | year. He's did $750,000 in sales. He's a Norwegian |
| they encourage high pricing. If you're going to use | | | | from Minnesota so he asks for 1 times yearly |
| outside help, stay away from the brokers, at | | | | revenue... This article may be reprinted as long as |
| least at first. | | | | the author information is included at all times. |
| Gross sales have little to do with the value, | | | | |