Playing In The Big Leagues
by, Feb 6th, 2012 at 05:21 PM (416 Views)
I was watching a seminar for entreprenuers that happened to be full of people with small businesses.
I realized that I'm doing myself a huge service by staying in school since some of these people already have businesses yet don't know the difference between common and preferred stock. This program cost $10!
I can't believe that!
So anyways, someone came on stage in the seminar who has experience taking companies public. He explained the benefits and down sides of going public.
He talked about getting investors.
But what I'm most interested in at the moment is when he said "Build a businesses as the product it's self. Begin a relationship with the people you plan to sell to in the future so that when the time is right you'll already have a relationship with them."
I was blown away.
If I build a business with a buyer in mind from the start, I'll not only be building a business to make money, but I'll have an exit strategy. I'll also have an easier time selling it if I continually nourish potential buyer connections throughout the growth period.
He also said that companies with high profit margins and growth rates are worth more than companies with lower profit margins and growth rates.
What I mean is that two companies like google and yahoo can be very similar and earn the same amount each year. But since google has a higher profit margin and growth rate it's valued at something like 4-5 times what it's revenues are.
I really don't understand all this fully although I definitely want to save this to dig deeper later on.