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BUSINESS VALUATION

Musings on business value, sale preparation, sale negotiations, sale structure.

Recognise your Rs

Recognise – Regroup – Refocus

  • When you started your business…
  • When you bought your business…
  • When you gravitated into your business…

Your business got to where it is today, for the most part, because you worked at it.

Nazier Ebrahim’s success is a product of planning and hard work. He knew he would sell his business one day. He needed to do so because if he didn’t, then his heirs would. He joked that he would prefer to enjoy the sale proceeds. “Rather I get myself a fast car, than this lot do”. He gestured towards an array of piercings and tattoos on his crotch fruit with their doting faces sitting at the table.

But the sale of a business is seldom as easy or as quick as selling a home. A business is a living thing. It is moody; varying between brooding depression and excitable growth.

Nazier’s business had been through ups and downs through its years. His success was the product of the tenacity with which he had directed the business.

“Direction” is what it says. The director recognises a problem. (You do it all the time.) And then by drawing on his own experience, he regroups and refocuses. Then he moves on to the next opportunity, threat, or just daily grind. Rinse and repeat.

“Rinse and repeat” is automated as standard operating procedures evolve. It takes time to create workable automation.

Successful automation makes up growing value in businesses because they become more stable. But successful automation also makes the business more profitable because stuff just happens. When the stability and profitability come together, value accelerates; driven by the complementary forces. (Which is why we avoid using simple multipliers to set prices for businesses.)

Nazier recognised that there is no point to reinventing existing automation. This is particularly the case where the system can be rented off the shelf.

So Nazier joined CSuite to make sure that his exit from his business would be smooth and cost-effective.

He recognised the problem and the solution. He has left the regrouping and the refocusing to a system which already works.

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