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- Jul 24, 2007
- 4,228
- 19,297
I read the title of this post
https://www.thefastlaneforum.com/community/threads/examples-of-adding-value-in-a-business.65660/
My thoughts went immediately to "Adding Value" in such a way as to increase the worth of the company. What I found in there was useful information but not what I was hoping for.
The techniques sound like they may add value by increasing the bottom line of profitability. That has never really been a tactic that I have liked to use though.
I started off looking for cashflow. Still want it but it has always seemed to be an illusion.
Increasing the value of a company is where the real money is at.
This started many years ago. I had a fourplex and it was hauling in a healthy $700/month or so of cashflow. I loved it. But there was this book that had a process in it that defined the value play. It outlined how to buy at a discount and sell at a higher amount. I sold this business and made a tidy sum of $100K for the profit alone.
How long would it take for the monthly cashflow to catch that number?
The next step was to buy another. Sold that for a profit of $250K. This cycle took less than 4 years. In the meantime, more were started.
Many instances had zero or even negative cashflow at the start. The business had to be remade into a profitable company. I was happy to sell to the cashflow seekers though.
This same process can be applied to many businesses. Most of the time, people shy away from failing businesses. For a good reason.... they are risky. Risky if you don't know how to turn them around.
Don't get me wrong either. Cashflow is nice. But I want a couple hundred K/year or more for it to be worth the time and effort. This can be accomplished much more easily if you have the funds to buy a bigger business.
https://www.thefastlaneforum.com/community/threads/examples-of-adding-value-in-a-business.65660/
My thoughts went immediately to "Adding Value" in such a way as to increase the worth of the company. What I found in there was useful information but not what I was hoping for.
The techniques sound like they may add value by increasing the bottom line of profitability. That has never really been a tactic that I have liked to use though.
I started off looking for cashflow. Still want it but it has always seemed to be an illusion.
Increasing the value of a company is where the real money is at.
This started many years ago. I had a fourplex and it was hauling in a healthy $700/month or so of cashflow. I loved it. But there was this book that had a process in it that defined the value play. It outlined how to buy at a discount and sell at a higher amount. I sold this business and made a tidy sum of $100K for the profit alone.
How long would it take for the monthly cashflow to catch that number?
The next step was to buy another. Sold that for a profit of $250K. This cycle took less than 4 years. In the meantime, more were started.
Many instances had zero or even negative cashflow at the start. The business had to be remade into a profitable company. I was happy to sell to the cashflow seekers though.
This same process can be applied to many businesses. Most of the time, people shy away from failing businesses. For a good reason.... they are risky. Risky if you don't know how to turn them around.
Don't get me wrong either. Cashflow is nice. But I want a couple hundred K/year or more for it to be worth the time and effort. This can be accomplished much more easily if you have the funds to buy a bigger business.
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