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Selling your business? Find the emotional buyer

Berkonomics

Most investment bankers will coach you into helping them find you a strategic buyer, knowing that such sales are quicker, often less focused upon the small warts of a business, and yield higher prices than financial sales. The price negotiated is not at all the critical factor in the emotional sale. And the emotional buyer.

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Why not share your liquidity success with those who got you there?

Berkonomics

Some companies, especially those financed by angel or VC investors, have good, formal stock option plans with properly priced options set to reward all employees and managers in the event of a corporate sale. I found myself in such a situation upon a sale of my computer software company. And a lack of plans for others.

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Defend you pricing against the competition!    

Berkonomics

There are exceptions, based upon cost of sales. Here are a few examples to help you [Email readers, continue here…] Wal-Mart is known for lowest prices, often for identical merchandise found in other stores for more. Companies that compete on price rarely compete against others who emphasize service or quality.

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“Where there’s mystery, there’s margin.”   

Berkonomics

Here’s a phrase I created in the early 1980’s to describe what I clearly saw as the last chance to make high margins on the sale of computer hardware to businesses. Even with the usual discount of 10%, the margins on hardware were high, especially when applied to prices that exceeded $30,000 per sale.

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Take advantage of the good times to build stakeholder loyalty.

Berkonomics

Email readers, continue here…] Sometimes a secondary fund-raising effort leads to a lower valuation than the last. And it is that disconnected employee, usually one or more of the better performers, that starts looking for a job when times look bad for a company. Investor loyalty is most tenuous of all.

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The Berkus Method: Valuing an Early-Stage Investment

Berkonomics

The universal truth about projections And in my opinion, all those ten methods fail to take into account the universal truth about the early-stages of growth – that less than one in a thousand startups meet or exceed their projected revenues in the periods planned.

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Know your four “P’s” to build business in a new year!    

Berkonomics

Email readers, continue here…] The second P is for productivity. For example: Hire a great sales person then fail to support him or her with a good marketing effort or a properly priced quality product, and that person will be set up to fail, and for reasons you might have fixed. Enough said.