Long before selling their businesses, owners start thinking: “What’s my business worth?” Or, if they are a buyer, “How much should I pay?” Bankers like to talk about the value of publicly listed companies based on their stock prices and some reasonable “premiums” above those prices. There is nothing wrong with this approach – but what is the right premium, if any, and how do you figure it out?
In the early 1970s, I attended what the Marine Corps calls “The Basic School” or “TBS”. That’s where newly minted Marine Corps officers learn how to lead men in ground combat. I learned a lot at TBS as well as over the next decade that I served on active duty: war fighting leadership; field skills and more. But TBS is also where I learned about one of the most important elements of successful negotiating. It is a lesson that has never left me.