Site Buying Method

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Chart: The Cost of Buying Private Companies

Many people think buying a business is expensive. But, actually, the typical private company sells at a low price.

According to BIZCOMPS, Business Valuation’s data base of private company sales, the median price of the 12,022 companies sold since 1995 on which Business Valuation has data was $166,000, less than half of one year’s revenue. As the chart below shows, only 5.8 percent of private businesses sold for more than $1 million. Nearly two-thirds sold for less than $250,000.

Why does it cost so little to purchase the typical private company? Do people undervalue small private businesses? Or does the low median price reflect the low value of a typical small company?

Share of Private Companies Selling at Different Prices

Created from data from the BIZCOMPS database.

From Small Business Trends

Chart: The Cost of Buying Private Companies

View full post on Small Business News, Tips, Advice – Small Business Trends

Make Money Buying and Selling Gold

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Your eBay® Buying And Selling Guides

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Make Money Buying & Selling Cell Phones

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The Complete Carpet Buying Guide Ebook

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Make Money Buying Debt

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Get better at buying

There’s incessant pressure on B2B sellers to get better at it. The boss wants the sales force to figure out how to approach, educate, close and support big companies and get them to buy their products and services.

But what about the big companies (not to mention the smaller ones) that are doing the buying? Ruth Stevens reports that the typical company with more than 1,000 employees has, on average, 21 different people involved in each sale of over $25,000.

Having made sales (when I was younger and more foolish) to ten of the thirty biggest companies in the country, I can testify that 21 might be an understatement. The typical big company’s org chart is a mystery, the process is a mystery and there never seems to be an end to the roster of meetings and people. It’s almost as though these companies don’t want to buy anything.

Of course, the salesperson isn’t the enemy, and buying from them isn’t charity. The transaction happens because it benefits both sides, yet the byzantine maze, lack of information and endless circle is a real barrier to success for both sides.

First, this is screamingly inefficient. Second, it drives away the great opportunities, leaving the companies with no one but the sales-focused, uber-patient companies willing to put up with 21 different people and a million meetings.

If you want to increase productivity and discover new opportunities, you’re going to need better vendors. One way to do that is to streamline your buying process and let the folks selling to you know how it works. They’re not the enemy. In fact, they’re your best source for off-the-shelf improvements and innovation you can start using tomorrow.

Whoever buys the best, wins.

Your purchasing department shouldn’t be a backwater… it ought to be an engine of innovation for the rest of the organization.

I’d start by reaching out to companies that might be able to help your company. Give them an org chart. Give them an overview of the best way to sell to you. Issue a newsletter outlining regular news about successful sales and how they were made. Reward your employees when they help a new vendor make a sale that really benefits you. Hassle your employees if they hassle or lie to your vendors.

If a vendor asks, “are you serious about buying from us,” the answer should either be, “yes,” or perhaps, “no, thank you.” But we’re all too busy for power games.

View full post on Seth’s Blog

Buying an education or buying a brand?

It’s reported that student debt in the USA is approaching a trillion dollars, five times what it was ten years ago.

Are those in debt buying more education or are they seeking better branding in the form of coveted diplomas?

Does a $40,000 a year education that comes with an elite degree deliver ten times the education of a cheaper but no less rigorous self-generated approach assembled from less famous institutions and free or inexpensive resources?

If not, then the money is actually being spent on the value of the degree, on the doors it will open and the jobs it will snag. If this marketing strategy works big, it pays for itself in no time.

A marketing tactic might move the dial, but that doesn’t mean it’s always worth the money.

The question is whether a trillion dollars is the right amount for individuals to spend marketing themselves. What would happen if people spent it building up a work history instead? On becoming smarter, more flexible, more self-sufficient and yes, able to take more risk because they owe less money…

There’s no doubt that we need smarter and more motivated people in our organizations. I’m not sure we need them to be better labeled or more accredited.

View full post on Seth’s Blog