Gary Holt Blog

6 Business Valuation Determining Factors: Jumping into the Shark Tank

Posted by Andrea Hewett on Mon, May, 11, 2015 @ 09:05 AM

Manage, Market, and Measure Business Valuation

If you are a business professional, chances are that you’ve heard of Shark Tank. The rags-to-riches investors tell it like it is, pulling no punches, but also make dreams come true.

There are 6 things that the Shark Tank Investors look for before they will invest in a company:

  1. A Business Model that has Proven to Return Recurring Profitability
  2. Long Term Growth with the Potential of Longevity
  3. High Profitability of 20-30% or More
  4. Sale and Marketing in Place to ensure driving Continued Profitablity
  5. Is Management in Place to Maintain and Improve the Business Models Performance
  6. As Kevin O’Leary says: “The Three Most Important things for a Business are Cash Flow, Cash Flow, and Cash Flow!”

Free Cash Flow is a moving target that demands constant systems evaluations and innovation that keeps everyone focused on the right issues, helps see risks, and helps you separate winning systems from losing systems. As you can see, free cash flow and discounted cash flow try to work out the value of a company today based on the projections of how much money it will make in the future. The basic idea is that the value of any company is the sum of the cash flows that it produces in the future, discounted to the present at an appropriate rate. Increasing business valuation ideas are shown below:

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Topics: free cash flow, business strategy, exit strategy, exit strategy for a business, business valuation methods, cash flow, business success, valuation, business exit strategy, business valuation, company valuation, discounted cash flow