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How to Avoid Big Mistakes Sellers Make Before Selling Their Business

by Tyler Tysdal
January 28th 2021
00:01:59
Description

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mm Hey gang 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 before 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 gonna burn as in efficiently as possible. And what I mean by that is it's not going to your customer acquisition, cost is going to be the highest and you're not gonna add significantly to your bottom line. Now, most of the time when you sell your business, it's a multiple of earnings. So you want to optimize for earnings. And so let's say for example, you, you could build a new, a new revenue stream but you're not actually adding a lot of profits. Conversely, you can 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 business.

And ultimately it's these little tips and tricks that make the difference whether you stick the landing or not your business, 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 at Freedom Factory? We look forward to speaking with you.

How to Avoid Big Mistakes Sellers Make Before Selling Their Business
How to Avoid Big Mistakes Sellers Make Before Selling Their Business
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