Potential Partnerships
Do you know people leaving the corporate workplace, who are very good at what they do? But are they also good at running a business? Partnerships are about knowing how to bring 1+1 together to joyfully create not 2 but 4.
The problem that small business owners face when they want to raise money or sell their business is that the market often values it at a much lower price than they value it themselves.
Do you want to know WHY?
From an investor’s standpoint, there are 3 main drivers to valuation. That's why, your valuable SME with $1MM - $10MM in annual sales will be valued very significantly less, dollar for dollar, than another company with revenues of over $20MM a year, for the following 3 reasons:
- Risk: SME's can go from a great year to a terrible year just by the defection of two key clients or two key staff members. Bigger companies are much more resilient. So, SME's are more risky than big businesses. Therefore, investors will discount their value.
- Scalability: Some technology stocks receive amazing valuations, because their ability to scale makes them very attractive to investors. Most others are much harder to scale.
- Liquidity: Investing in an SME is a long term bet, and the odds are not great. If we put a million dollars into a more publicly traded stock, we can pull that money out again quickly, if we so desire. That's why an investor is prepared to pay a much higher price for that freedom.
Thus the problem with most SME's is that they are not part of a group that can help them grow (scale) and their stock is not being traded more publicly (liquidity).
The solution to fulfill all 3 above criteria is to bring one to two dozen companies from the same industry together, then place their stock in a holding company, and offer some of its stock to groups of small private investors.
Now being a part of a ‘big’ company, you could scale much more easily by working with your 'BRO-Cos', offering goods or services across markets to global clients.
Because your stock is regularly traded, you now have the liquidity and flexibility that retail and institutional investors desire. Thus, the value of your shares would multiply. Wouldn't that make all the difference for you and most other entrepreneurs?
F U T U R E of Potential Partnerships
As a networker, we Focus first on whether your company, as a Potential Partner SME, is a good fit, such as debt free, more than 10 people on the payroll, and whether you are a leader in your field of plenty similar or synergistic enterprises, that could benefit from collaboratively creating a major player.
We explain our vision and offer you a chance to be part of the group we are putting together, with ZERO risk to your company. You don't have to pay anything, you can pull out if you so desire, thus such a deal can be done on a handshake.
We also need to fully Understand your personal needs and wants. For some it is about global expansion opportunities, for others it is about joining a peer group of successful entrepreneurs who have a vested interest in their success, or for you it may be a pathway to a much more profitable exit.
Traction is about helping you feel sufficiently comfortable with the road-map and excited about the outcome, to be ready to sign a letter of intent and join the group.
By Uplifting, we use our experience with you to approach others with the same offer and the chance to join our group.
Then we Refine and leverage the credibility of the company owners who have agreed to come along until we complete our group. After all of that, we can offer stock to interested 3rd parties.
Building and listing this group is not really the end goal. The end goal is to use the tradeable stock all partners now have, to help their companies grow and Expand.
The use of more refined management and human capital tools, which we will provide exclusively to all partners involved, will properly prepare the group for the acquisition of or merger with other companies.
This is a much easier exercise with a tradeable stock, and through this collaboration as a team, we should be able to help our Partners multiply the value of their businesses.
The above contains excerpts from the book Progressive Partnerships.
