Tuesday, June 16, 2020

Big Errors Sellers Make Before Selling Their Business

Today's episode of the podcast, Robert Hirsch from Freedom Factory, discusses "Big Errors Sellers Make Before Promoting Your business."

Listen to the podcast, watch the video, or read the transcript below.

Additional Videos From Freedom Factory

How to Buy a Business When You Don't Have the Cash

What Are the Types of Company Buyers?

Transcript of Podcast

Robert Hirsch business broker from Freedom Factory

Hey guys! Robert from Freedom Factory here, and I want to talk about something that comes up a lot when we start working with new sellers, and usually it sounds something like this, should I start a new revenue stream? Should I add a new channel? Should I build an affiliate program prior to I sell? And while this sounds like a good idea on the surface, in reality, not so much. And the reason for that is twofold. One, when you start a new revenue stream, it's going to burn as inefficiently as possible. And what I mean by that is your customer acquisition cost is going to be the highest and you're not going to add significantly to your bottom line.

Now, most of the time when you sell your company, it's a multiple of earnings. So you want to optimize for earnings. And so let's say for example you could build a new revenue stream, but you're not actually adding a lot of profits. Conversely, you could spend that same time taking your existing revenue stream and for example, let's say you can find an extra $200,000 in profitability through cost cutting on that.

Now that $200,000 in earnings, not only did you make that the first time, but if you sell for five times earnings, that's going to be another million dollars in revenue, or another million dollars in valuation to your company. And ultimately it's these little tips and tricks that make the difference whether you stick the landing or not, you're a company you've worked for years on, and it's the most important asset that you have.

And frankly, sticking the landing is just as important as building and creating a great company. If you have questions about this or anything else, why don't you give us a call it Freedom Factory. We look forward to speaking with you soon.

Thank you so much for watching. Please like and subscribe and we'll see you soon.

Contact Freedom Factory

Freedom Factory

5500 Greenwood Plaza Blvd., Ste 230

Greenwood Village, CO 80111

Phone: 844-MAX-VALUE (844-629-8258)

https://www.freedomfactory.com/

https://g.page/freedom-factory-denver

Also, Follow Freedom Factory here

Best Business Brokers - video portfolio

Follow us on Twitter

Find us on Facebook.com

Connect on Linkedin

Youtube Channel

Available on Youtube:

Managing Partners

Learn more about the managing partners, Tyler Tysdal, and Robert Hirsch.

About Tyler Tysdal

Listen here