Bump up the value: Secrets that can fetch biggest price for you business

The Economic Times 9th Feb 2013

Here are some secrets that can fetch you the biggest price for the smallest slice.

Dream Team

The ideal management consists of people who have been part of successful mega-deals, have depth in your industry, and worked together as a team. Sadly, there's no such group. But some get close. Tap them.

Board Seats

Ensure a majority of board consists of outsiders. Try and attract some well-known luminaries without cash, and build on their reputations to benefit your own valuation.

Clever Affiliations

Part of the concept in both Dream Team and Board Seats is to build value by affiliation. The concept can be extended to contract, outsourcing, and joint venture deals.

Solve a Problem

Whatever the product or service you offer, it must solve some human problem that is not solved better elsewhere.

Know Your Rivals

To prove that your solution is the best, you must also expose the failings of the competitive solutions available in market.

Spiffy Testimonials

If you have customers, showcase them. It helps to put a face on real-world problems solved for real people.

Intellectual Property

To maximise valuation, you need to anchor down the intellectual property — via patents, trade secrets, and noncompete clauses.

Wide and Deep

Investors want to see a whole family of products for today and beyond. But they also want each product to be robust. So, focus on your best product.

Be Honest

Unlike selling a second-hand car, a company's valuation is best maximised with honest disclosures.

Financial Stuff

When you do your projections, go out 5 years, then cut it back to 3 and compare them. If the three-year projection is almost as good, just show the three years, otherwise five.

Deal Structure

Depending on your goals, sometimes deal structure can be traded off against a higher valuation. Properly done, both sides can stand to benefit, and the valuation zooms.

Business Plan

There is no one standard outline for a business plan. Each has to be tailored to the qualities of each company. Have a plan with all the key information.

(Source: harvardcapital.com)

Stanford University - Don't be carried away by looks!!!!!!!!!!!!

True Story A lady in a faded gingham dress and her husband, dressed in a homespun threadbare suit, stepped off the train in Boston and walked timidly without an appointment into the Harvard University President's outer office. The secretary could tell in a moment that such backwoods, country hicks had no business at Harvard and probably didn't even deserve to be in Cambridge. She frowned. "We want to see the President," the man said softly. "He'll be busy all day," the secretary snapped. "We'll wait," the lady replied. For hours, the secretary ignored them, hoping that the couple would finally become discouraged and go away. They didn't and the secretary grew frustrated and finally decided to disturb the President, even though it was a chore she always regretted. "Maybe if they just see you for a few minutes, they'll leave," she told him. He sighed in exasperation and nodded. Someone of his importance obviously didn't have the time to spend with them, but he detested gingham dresses and homespun suits cluttering up his outer office. The President, stern-faced with dignity, strutted toward the couple. The lady told him, "We had a son who attended Harvard for one year. He loved Harvard. He was happy here. But about a year ago, he was accidentally killed. And my husband and I would like to erect a memorial to him, somewhere on campus." The President wasn't touched, he was shocked. "Madam," he said gruffly. "We can't put up a statue for every person who attended Harvard and died. If we did, this place would look like a cemetery." "Oh, no," the lady explained quickly. "We don't want to erect a statue. We thought we would like to give a building to Harvard." The president rolled his eyes. He glanced at the gingham dress and homespun suit, then exclaimed, "A building! Do you have any earthly idea how much a building costs? We have over seven and a half million dollars in the physical plant at Harvard." For a moment the lady was silent. The president was pleased. He could get rid of them now. And the lady turned to her husband and said quietly, "Is that all it costs to start a university? Why don't we just start our own?" Her husband nodded. The President's face wilted in confusion and bewilderment. And Mr. and Mrs. Leland Stanford walked away, traveling to Palo Alto, California where they established the university that bears their name, a memorial to a son that Harvard no longer cared about. You can easily judge the character of others by how they treat those who can do nothing for them or to them. Malcolm Forbes