Hidden Value Drivers: Unlocking Mid-Market Potential (Part 2 of 3)

Welcome back to another edition of The Wise Exit!

In today's edition, you'll learn:

• Part 2 of 3: How customer relationships and recurring revenue can supercharge your business value.

• The top 6 M&A deal killers (and how to avoid them).

• Is that 'eye-popping' offer to buy your business too good to be true?

Let's dive in...

Hidden Value Drivers: Unlocking Mid-Market Potential (Part 2 of 3)

Last week, we discussed how IP can be your secret weapon. This week, we're exploring customer relationships and recurring revenue.

Why Should You Care?

Here's why: strong customer relationships and recurring revenue are like rocket fuel for your company's worth.

The Magic Numbers: Key Metrics to Watch.

1. Customer Lifetime Value (CLV): How much revenue a customer brings over their entire relationship with you.

2. Customer Acquisition Cost (CAC): What it costs to get a new customer on board.

3. Net Promoter Score (NPS): How likely your customers are to rave about you to their friends.

These aren't just fancy acronyms to throw around at meetings. They're your crystal ball for predicting future cash flow – buyers love that certainty.

Turbocharging Your Customer Relationships.

Ready to take your customer relationships from "meh" to "wow"? Here are 3 ways:

1. Roll out the red carpet with customer success programs. Make your customers feel like VIPs.

2. Cook up some loyalty initiatives. Think of frequent flyer miles for your business.

3. Switch to a subscription model. It's like Netflix but for your products or services.

Real-World Example: The Candela Story.

Let's talk about Candela, a company that sells fancy fat-zapping machines to doctors. They used to sell their UltraShape Power® device as a one-time thing. But they got smart and shook things up:

1. They went digital: Not just hardware, but software too.

2. They introduced a subscription model: Instead of a significant upfront cost, doctors could now pay as they go.

3. They added extra goodies: Ongoing support, updates, you name it.

The result?

More predictable revenue, happier customers, and a more valuable business than ever.

Remember, predictable revenue is king. So, start building those relationships and watch your business value skyrocket.

Featured Blog 📰

Ever wonder why some M&A deals crash and burn? It's not always about the money.

Our blog post breaks down the top 6 M&A deal killers that can derail even the most promising business sale. From accounting hiccups to employee departure, we've got the inside scoop on what can go wrong – and how to avoid it.

Check out "The Top 6 M&A Deal Killers of Any Business Sale Process" and give yourself the knowledge to close the deal.

Read the full post here: https://exitwise.com/blog/top-6-m-and-a-deal-killers

M&A Tips from Brian Dukes 💡

Is that 'eye-popping' offer to buy your business too good to be true?

Maybe. Let me explain.

You've decided to exit your business, so you create a CIM and market your company to potential buyers.

You start receiving Indications of Interest (IOI), and one offer blows you away.

It's time to pop the champagne. Right? Not so fast. Because if one valuation is much larger than the others, it could be a red flag.

Here are 5 questions to ask the buyer BEFORE you waste a bunch of time on a deal that doesn't close:

Read the full post on LinkedIn.

Tune in next Wednesday for the final part of our Hidden Value Drivers series, and have a great rest of the week.

Best,

Brian Dukes