Follow-up to our earlier rriddle…

Follow-up to our earlier rriddle…

Two companies.
Same revenue.
Same profit.
One gets $3 Million one gets $6 Million

Why?
Buyers don’t pay you for your salary or your net income.
They pay you for what they believe will happen in the next five years.

The company that walked out with $6M had:
• Predictable, repeatable cash flow
• Lower customer concentration
• Systems that worked without the owner
• Cleaner financials and fewer “surprises”
• Lower perceived risk.

Lower perceived risk.  Remember that’swhat will move the buyer.

Profit measures performance in the past.
Value measures confidencefor the future.

If you’re running a business, the real questionisn’t:

“Am Iprofitable?”

It’s:

“Wouldsomeone else feel confident owning this business without me?”

That’s the difference between building a job and building an asset.

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