Quick Summary ⚡️
1. The key to creating a valuable business is to create a business model that can operate without the founder’s constant involvement.
2. A business is only sellable if it has a recurring revenue stream, predictable cash flow, and a scalable business model.
3. Building a business with the goal of selling it requires a different mindset than building a business to keep and grow.
4. To make your business attractive to potential buyers, you need to have a clear value proposition, strong brand, and a unique competitive advantage.
5. To create a recurring revenue stream, you need to have a product or service that is in demand and has a large addressable market.
6. To achieve predictable cash flow, you need to have a predictable and recurring revenue stream and a business model that is scalable and sustainable.
7. To increase the value of your business, you need to focus on creating a company culture that fosters innovation and growth, and that attracts and retains top talent.
8. To maximize your return on investment, you need to plan ahead and think about the exit strategy while building your business.
9. To ensure that your business is attractive to potential buyers, you need to focus on improving the financial performance, streamlining processes, and reducing risk.
10. Finally, to increase the chances of success, you need to work with experienced advisors and experts who can help you navigate the complexities of selling a business.
Other Details ℹ️
February 1st 2010
According to John Warrillow, the number one mistake entrepreneurs make is to build a business that relies too heavily on them. Thus, when the time comes to sell, buyers aren’t confident that the company-even if it’s profitable-can stand on its own. To illustrate this, Warrillow introduces us to a fictional small business owner named Alex who is struggling to sell his advertising agency. Alex turns to Ted, an entrepreneur and old family friend, who encourages Alex to pursue three criteria to make his business sellable: * Teachable: focus on products and services that you can teach employees to deliver. * Valuable: avoid price wars by specialising in doing one thing better than anyone else. * Repeatable: generate recurring revenue by engineering products that customers have to repurchase often.
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