Back to Blog

Selling your Time is Killing your Business Growth

As a business owner, your time is your most valuable asset. However, selling your time by billing clients hourly or daily can be a serious roadblock to growth. When customers rent your time instead of buying a result, your business model lacks leverage, making it difficult to scale without working harder or hiring more people....

How to Get Your Customers to Pay for New Ideas

There is never enough money to invest in developing products when you’re running a self-funded business. When you’re running your company out of cash flow, most of your resources go into selling your existing products and services, leaving little left over to fund your new product ideas.You could keep plugging away with your existing product or service lineup, but you will leave yourself exposed to competitors that dream up a better offering. The other option is to develop unique new offerin...

The Purest Way to Increase the Value of Your Business

Picture a magic slot machine. Each time you pull the arm, you make back a multiple of whatever you wagered. How much time would you devote to cranking that arm? When it comes to the value of your business, you can make many bets, but only one has a virtually guaranteed return. Most companies are valued on a multiple of earnings before interest, taxes, depreciation, and amortization (EBITDA), so every dollar of incremental profit you earn in the short term will translate into a multiple of t...

The Biggest Mistake most Founders make when trying to Replace Themselves

If your company becomes dependent on you, it may end up costing you down the road. The most valuable companies don’t rely on the owner’s involvement to succeed. However, finding extraordinary talent to replace yourself can be challenging....

3 Ways to Create a Valuable Culture Inside Your Business

Many factors drive your company’s value, but perhaps the most important is how your business would perform without you. To get your company to flourish when you’re not around, you need owner-like effort from your team. Inspiring owner-like effort comes from cultivating a vibrant culture inside your business. Here are three ways to get your employees to care as much as you do: ...

TAM vs Target

As you enter the fourth quarter of the year, you may be starting to think about your marketing plans for 2023. Terms like Total Addressable Market (TAM) and Target Market may surface in your planning, and you could be tempted to use them interchangeably. However, your TAM and your target market are related but slightly different. Treating them as synonyms may be a mistake. First, let’s understand the difference between the two terms. Your TAM is an estimate of the total size of the market fo...

Systematize Your Business (Without Making it Boring)

Have you ever noticed that you get some of your best ideas in the shower? Every morning, you’re stuck there for a few minutes doing something you’ve done since you were a child. Your mind knows it has a couple of minutes to think. Employees get the same mental holiday when you specialize and give them systems for routine tasks. ...

The Two Best Ways to Make your Company Special

Specializing in one product or service allows you to focus on delivering that thing better than everyone else. It enables you to hire (or train) specialists in your field, improving the quality of your work, which leads to happier customers. And satisfied customers buy again and refer their friends.That’s why specialists often grow faster even while they are spending less on marketing, leading to better profit margins and, ultimately, a more valuable company. Specializing in a specific product...

Starting vs. Growing a Business

Most company founders are good at the first stages of entrepreneurship. But in the phases that follow, they may only be average. Just because you have a knack for starting companies, doesn’t necessarily mean that those skills translate well into growing one. There are celebrated cases of founders who have successfully started and grown a business – Elon Musk and Bill Gates come to mind. There are, however, many more examples of entrepreneurs who perform well initially and then hold back thei...

One Tweak That Can (Instantly) Add Millions to The Value of Your Business

If you’re trying to figure out what your business might be worth, it’s helpful to consider what acquirers are paying for companies like yours these days.  A little internet research will probably reveal that a business like yours trades for a multiple of your pre-tax profit, which is Sellers Discretionary Earnings (SDE) for a small business and Earnings Before Interest Taxes, Depreciation and Amortization (EBITDA) for a slightly larger business. ...

Will This Be the Year You Seriously Drive Up the Value of Your Company?

If you have resolved to make your company more valuable this year, you may want to think hard about how your customers pay. If you have a transaction business model where customers pay once for what they buy, expect your company’s value to be a single-digit multiple of your Earnings Before Interest Taxes, Depreciation and Amortization (EBITDA).  If you have a recurring revenue model, by contrast, where customers subscribe and pay on an ongoing basis, you can expect your valuation to be a ...

5 Ways to Get Your Business to Run Without You

Some owners focus on growing their profits, while others are obsessed with sales goals. Have you ever considered making it your primary goal to set up your business so that it can thrive and grow without you?...

How to Create a Recurring Revenue Model That Appeals to Customers

Have you struggled to identify a recurring revenue model that will work in your business? If so, you’re not alone.  Most owners understand the benefits of recurring revenue, such as predictable cash flow and an increase in their company’s valuation, but struggle with where to start. Just changing your pricing from a one-time transaction to a smaller, recurring fee does not make a sticky subscription model.  The first step of creating a recurring revenue model for your business has ...

3 Things Wealthy Business Owners Do Differently

Much is made of analyzing the personality traits of successful entrepreneurs. Some appear outgoing. Others are introverts. Some lean right, others left. Some are flashy. Others are monk-like with their money. Their diversity can lead one to the conclusion that there are no common personality traits among successful founders.  Rather than trying to understand who they are, let’s look at what they do. ...

3 Ways to Flip Repeat Customers into Subscribers

Repeat business drives the value of your company. There are two types of customers, which are sporadic customers and customers who buy regularly.  Turning regular customers into repeatable, predicable buyers increases revenue and profitability....

Six Power Ratios to Start Tracking Now

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...

One Counterintuitive Strategy Led to this $380 Million Payday

When David Perry started his video game company, he filled a dartboard in his office with the names of companies he thought would want to buy his company, Gaikai, one day....

3 Things to Consider When You Hit “The Freedom Point”

When was the last time you calculated the percentage of your net worth tied to your company’s value?...

3 Ways to Get Your Life Back

How’s your workload these days?If the pandemic has forced you back into the weeds of your business, you’re not alone. Many owners are again doing tasks they haven’t done in years because they have had to lay off front-line staff or their employees have fallen ill or are caring for someone in need.Being back in the middle of things is neither healthy for you nor your business long term. Personally, it’s a recipe for burnout, and professionally, your business will be less valuable with you...

The Most Critical Factor in Achieving Your Goals May Surprise You

Whatever time of year you put on your calendar for planning, setting goals is an important part of managing a successful business. Perhaps you came out of a difficult year, like we've had during the pandemic, and managing new priorities is part of your survival. Perhaps you’re going to create a recurring revenue stream or finally hire that general manager. Or maybe you’ve decided to start preparing for an exit. Whatever your goals are, the most important thing you can do now is write down y...

3 Ways to Re-Invent Yourself in a Crisis

During a crisis, key decision making is vital to the success of your business. Leaders know that making the right decisions in normal circumstances can be challenging enough, but in unprecedented times when information, time, and resources are limited, it can feel almost impossible. When you have incomplete or imperfect information, lose focus, feel rushed because you are busy putting out 'fires', or don't have the means to respond to the situation, you can feel pressured to make decisions out o...

Why the Future of Your Business Is Critical to Its Value

As a business owner, you’re likely proud of the results you’ve achieved in the past, but when it comes to the value of your business, your future is critical. That’s why your growth potential is one of eight factors that drive the value of your business....

4 Reasons Why It’s Better to Own a Big Chunk of a Small Company

Is it better to own a big chunk of a small business or a minority stake in a big company?  It’s one of the fundamental questions all owners must wrestle with. Owning a relatively small slice of a big pie has worked out well for both Elon Musk and Jeff Bezos, who recently traded places on the list of the world’s richest person. Musk still owns around 20% of Tesla, and Bezos controls about 10% of Amazon, so they both have chosen to sell most of their company to fund their ambitions. The s...

One Way To Decide When To Sell

How do you know the right time to sell your company?  One answer to this age-old question is that the time to sell is when someone else is willing to invest more in your business than you are. When you start a business, nobody is willing to invest in its success more than you. You’ve already worked a 40-hour week by Wednesday and, if you’re like most founders, you’ve invested a big chunk of your liquid assets to get your business going....

The Hidden Dangers of Cross-Selling

You've likely heard the adage that it is far easier to cross-sell an existing customer a new product than it is to find a new customer. And if your goal is to grow at all costs, then cross-selling makes sense.  However, all of that sales growth may not do much for the value of your company. If you cross-sell your existing customers too much stuff, it could make your business far less valuable. When you cross-sell a customer so many things that they begin to account for more than 15–3...