Carlos SavaFinancial, strategy, and investment professional
Bio

Former investment banker (insurance, software, IT services, government contracting verticals). Founder and portfolio manager of investment advisory business. Advisor to entrepreneurs and small businesses. My mission is to add value and create wealth. CFA charterholder and CPA.



Recent Answers


There are some good answers and they included core ideas: define your ideal/typical customer, articulate a value proposition versus the competition, and so on.
What I did not see is a budget and decision process for understanding which options are feasible. Developing a set of KPIs to measure effectiveness. Understanding a timeline for initiatives and results. The first month of new ads, a new sale representative could yield very little. What is step two if it does not work. Poor plans will talk about Facebook and Google ads, but they won't have the average spending per category, will not put it in the context of the gross profit per sale. The budget and KPIs are just as important as the messages.


There are a couple of strategy and product questions that need to be addressed before considering paths forward for revenue generation. I've only taken a cursory look at your website.
Who are the most common end users and what is their purpose? Does offering packages or bundles make sense? That would be a simple upsell. E.g. One report $99, five reports $350.
Who in organizations are buying these reports? Strictly salespeople?
Is enterprise partnerships a path to pursue? If the target is international salespeople - is salesforce.com a logical partner? Do you have the ability and experience for enterprise level partnership agreements?
What makes sense for you to give up financially per sale? Does paying an internal salesperson on a primarily high commission percentage make sense and is it feasible?
Could you white label this to an Owler type competitor (assuming they are one) or become the horsepower behind a similar product. Don't give away all of your secret sauce but that type of agreement can be a huge step up rather than a salesperson knocking on doors and delivering steady but noticeable and profitable results.
While not necessarily an answer - I hope this outlines considerations and tradeoffs and isn't just telling you SEO techniques.


There are a few considerations and here is a general framework for this type of valuation exercise.
1. Who is the end user and for what purpose? The level of detail and sophistication needed, skewing to the high or the low side, and as a comparison to what situation? Is the transaction a sale to a competitor, an immediate liquidation, etc.?
2. A strong set of current data, information, and projections is needed. Sometimes private companies need help in getting to the point where there is a strong enough information base to begin.
2a. Information about the industry, competition, product positioning in consumers and retailers minds
3. Then different valuation methods will be applied. Discounted cash flow analysis, comparable transactions, common sense, control premiums, comparable companies, and then sometimes reality. The valuation can often come from the best offer on the table.


I think Rob Toth's answer is spot on. Bankers do not often give feedback in a candid and constructive fashion, so there may be marketing or business concerns that you are unaware of. It is uncomfortable and challenging to keep the mandate after telling someone they have an "ugly child".
Bankers should be willing to share their outreach list so it should give you a better sense of how broad or targeted the marketing has been. While you have retained a professional to manage the process, the best outcomes often require collaboration and involved sellers.


One thing that is missing from other answers is cash vs accrual accounting. Cash accounting is typically only done by small businesses and ones that do not have the same timing challenges as a SaaS company. The largest difference is the cash received from a customer and the deferred revenue created. As a simple example... You have one customer who pays you $1 million on July 1 for 12 months of service. Let's further assume your operating expenses and cash paid for this 12 months of service is $700k (ratable monthly). As a cash payer would record in year 1, the taxable income of $650k and a loss of $350k in year 2. An accrual tax payer would have taxable income of $150k in both years. There are other financial statement impacts, from converting from cash and accrual accounting methods.
Taxes are assessed at 3 levels: federal, state, and municipal. We will disregard employment and sales taxes for these purposes. Broadly speaking, you will not have to pay full double taxation in two countries. The taxes paid to the foreign country will receive a credit or a deduction by your home country. Secondly, international sales can involve transfer pricing to a subsidiary which will impact the profitability in the foreign country. This is the point where you will want to consult a tax professional who is familiar with your product and the tax regulations of the countries you are doing business with.


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