One question worth $23 million—and could be worth even more to you

By: Bette Tomaszewicz on: May 7th, 2012 8 Comments

Two weeks ago at SuperConference I spoke about having an exit strategy…

So you could set yourself up to sell your business for millions…and millions…and millions.

During the question and answer period, one GKIC member said he had a billion dollar company interested in buying his $5 million revenue/year software company.

When I asked him why this company wanted to buy his company, he didn’t know.

Then, I asked him what he thought his company was worth. He told me he thought it was worth $7 Million.

After asking him a critical question, he was surprised to hear me say I thought his company was probably worth closer to $30 Million.

As I’ve mentioned before, as you build your company, a smart plan is to have an exit strategy. And part of having an exit strategy is knowing what your company is truly worth. So the one BIG question you always want to keep in mind is:

“Why would someone want to buy my company?”

Knowing the answer to this will help you correctly determine what your company is worth to a potential buyer.

Here are some of the top reasons a business might want to acquire your company:

Your customers: Dan Kennedy often talks about knowing your customer’s lifetime value. If you know this, some simple math will help you determine with high predictability the revenue that will occur. For example, if you know that the average lifetime value of your customer is $2,376 with an average of 2,000 customers, your customers would be worth $4,752,000.

Trade secrets, technology or know-how: Do you have a product or system for doing things that’s better than what the buyer currently has or that is the best available on the market? Acquiring a company for trade secrets, technology or know-how can give the buyer a competitive advantage. Plus by buying you, they eliminate a potential competitive threat.

Your marketing systems: We have hundreds and hundreds of GKIC members who talk about how the marketing systems they’ve learned from Dan and subsequently put into place, have made them virtually untouchable in their market space. One of the reasons for this, as cited by GKIC member and attorney, Ben Glass, is that it’s too difficult for others to duplicate. When you look at the time, money and know-how invested, your marketing systems can definitely be a driving factor in why a buyer would purchase your company. Therefore, this should definitely be considered when determining your worth.

On a side note, as it turns out, the reason the billion dollar company is interested in buying the aforementioned GKIC member’s software company is because of his marketing…and is why his company is worth $30 million instead of $7 million.

Recurring cash stream: Do you have continuity programs, subscriptions or long-term contracts? Recurring and/or predictable income streams are reasons a buyer might consider purchasing your company, especially if your rate of return is higher than what an investor can get on his money on an investment with similar risk. For example, if your company can reliably put $100,000 in the bank every month and your ROI is thirty percent, and the best return he can reliably expect in another investment with similar risk is only ten percent, then buying your company is a no-brainer financially.

Often companies are purchased for more than one of the reasons stated above, however regardless of the reason, it is crucial for you to know why a buyer is interested in purchasing your company. When you do, you’ll have a better understanding of what your company is truly worth and avoid undervaluing it or selling it below its true worth. Plus you’ll have the information you need to solicit other competitive offers, setting yourself up to get the best price possible for your company when it comes time to sell.

Want more insider information on how to leverage marketing and sales to improve your business?  Click here to claim your special free bonus of $633.91 worth of marketing materials.

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    Elizabeth Tomaszewicz (Bette T.) is GKIC’s CEO. During her career, Bette has raised over $150-Million in capital, steered mergers and acquisitions, at one point led the marriage of the two largest companies in the corporate training industry. She has been at the helm of teams as large as 400 sales and service professionals with corporate revenues exceeding $330-million. She has led product innovation, sales force development, countless joint ventures and strategic alliances, global expansion and distribution/marketing channel expansion, all reflected in new initiatives. Bette has hands-on experience at the small business level, creating companies from scratch and taking companies with only a couple million dollars in revenues and growing them exponentially.

    8 Responses

    1. Ken Ma says:


      I attended your exit strategy session and the marketer of the year day at SuperConferfence and I eye-witnessed many entrepreneurs don’t think about having an exit strategy when they start building their business.

      Thanks for the excellent article.

      To all entrepreneurs (me included), your biggest pay day is when your sell your company with a multiplier (x3, x5, x?? of your revenue/year).

    2. David Tomen says:

      Bette: Excellent advice in your article. It’s so easy to get lost in the day to day running of my businesses. And to forget that every single thing I’m doing should be influenced in some way ultimately by the best exit strategy.

      Thank you very much,

    3. my daughter is a teacher. she is interested in becoming a tutor. i told her there is a lady in gkic who is a very successful former teacher, now a tutor that she might contact, etc. my daughteris very interested in gkic marketing.
      thank you.

    4. What I love about reading this blog, is that the numbers you talk about are so high, it makes me realize that there really is no limit to what we can accomplish. One we reach a 6 figure income, we can strive for a 7 figure income, once we reach a 7 figure income we can teach others to do the same and then we are at 8 figures! There really is no limit, and we have to know our value and worth. That what this article meant to me. Thanks! I’m heading over to check out the GKIC Women’s Speaker hot seat now!

    5. ABOKI DUNIYA says:

      Your kind of effective teaching on pricing method is amazing and very encouraging. I learn a lesson pf boldness as an enterprenuer.

    6. I do not have the right funding to get started do not have any idea what it would cost. I have a made up website on Anthony Morrison’s Website called but have not set it up yet because I’m afraid I do not know what I’m getting into and failure is not an option.

    7. Constance J. Archer says:

      You know you have to think big. My history is about making a difference and making it happen. It has to happen I praying everyday that I get lucky and I find a pot of gold. I already started a scavenger on my website. My neice has to find my website and my business on line. I need to be paid per click.

    8. Baron von Raschke says:

      Have any of these “companies” that Bette T has run ever actually made operating profits? I think that (one of the many shit business she has pretended to run) was losing money hand over fist and vendors weren’t being paid when the company was sold. I would be surprised if the others made money under her leadership. It appears that her MO is to hype the company she “runs” so that it can be sold.The companies never seem to thrive as going concerns under her leadership. Self promotion, bullying and masquerading as a visionary seem to be her primary talents.

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