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For many entrepreneurs, the value of a business is directly linked to financial figures – especially revenue, EBITDA, and market multiples. These are, of course, important and provide an overview of the company’s past financial performance. However, to understand the true value of a business, we need to look at it from the perspective of buyers, beyond these traditional indicators.For a buyer, evaluating a business is not just about what has been achieved so far, but also about future potential. What risks are involved in acquiring this business? What factors make it a solid investment? What makes it attractive compared to other investment options in the market? These are the questions a buyer asks when analyzing an acquisition opportunity.In this equation, the factors contributing to a business’s value are essential. The 8 key factors outlined below, if understood and implemented correctly, can make the difference between an average business and an extremely valuable one.&nbsp;1. Financial performance is essential but not enoughOf course, strong financial performance – good profit margins, stable revenue, and healthy cash flow – is important. However, a buyer will not be impressed by past numbers alone. What they really want is a business that offers clear growth prospects. For example, a company that can demonstrate a recurring revenue model is much more attractive than one that relies solely on occasional projects.Financial performance is not just about how much you earn now, but also how easily the company will be able to generate revenue in the future. That’s why it’s important to have clear and transparent accounting and be able to show that there is an efficient system for managing costs and cash flow.&nbsp;2. EBITDA and multiples are just part of the storyMany focus on EBITDA and market multiples to evaluate a business’s value. However, these indicators are not enough to fully understand the potential of a company. EBITDA may reflect profitability, but it doesn’t account for the risks or the long-term structure of the business.The revenue or EBITDA multiple can vary greatly depending on the industry and economic context, and a buyer will look at many more factors than just these numbers. For example, if a business relies on a single client or an exclusive supplier, this may present significant risks, and buyers will assess these risks when determining its value.&nbsp;3. The key factor of the “Switzerland Structure”Buyers are interested in stability, and a business that depends on a single client, a single supplier, or a key employee can be a major risk. This is where the concept of the “Switzerland Structure” comes in. It refers to the idea that a business should operate efficiently and generate steady revenue without relying too heavily on a single entity.Imagine a business with a balanced structure – like Switzerland, which doesn’t rely on one partner or resource. Diversifying the client base, suppliers, and employees is a key element in increasing the value of a business. If your company can function well even without the direct involvement of a single supplier or employee, it becomes much more valuable.&nbsp;4. Growth PotentialBuyers don’t just acquire stable businesses, they also acquire businesses that offer long-term growth potential. They will want to see that there are opportunities to expand into new markets, new sectors, or through new products. For example, a company that can demonstrate easy expansion into a different geographic region or new market verticals will be much more attractive than one that has already reached its growth limit.If your business has a clear, realistic scalability plan that can be implemented quickly, you’ll definitely attract more buyers and, consequently, a higher offer.&nbsp;5. Market control and niche monopolyBuyers love monopolies, not just because they are profitable, but because they offer market control. If your business has a significant competitive advantage or even a monopoly in a niche, you’ll be able to set prices and achieve higher margins, which will lead to a higher valuation.Specializing in a niche may seem like a risky strategy at first, but in the long term, a company that dominates a small but profitable market segment is far more valuable than one that competes in a crowded market.&nbsp;6. Recurring revenue and financial stabilityRecurring revenue is one of the most powerful elements that can increase a business’s value. If you can show that your business generates stable income through long-term contracts or subscriptions, you’ll reduce uncertainty for a potential buyer. This means fewer risks and more financial stability, which enhances the attractiveness of your business in the long run.&nbsp;7. Customer satisfactionCustomer satisfaction is one of the strongest indicators of a business’s success. Buyers don’t just want a profitable business; they want a business that has a loyal customer base and a high chance of attracting new customers because of its reputation. Net Promoter Score (NPS) and positive testimonials are key elements that prove your business can maintain and grow long-term relationships with clients.&nbsp;8. Independence from the owner: the “Hub &amp; Spoke” modelAnother important factor in evaluating a business is the extent to which it can operate independently from the owner. Many buyers avoid businesses that rely too much on the direct involvement of the owner. If your business is a “Hub &amp; Spoke” model – meaning all decisions go through you – it will be much harder for a buyer to imagine how they could take over the business without a long adjustment period. It’s important to develop processes and invest in building a reliable management team to ensure business continuity without constant involvement from you. ConclusionIn conclusion, the value of a business cannot be reduced to its past financial performance or traditional indicators such as EBITDA and market multiples. A buyer will assess the business from a much broader perspective, focusing on factors that demonstrate stability, scalability, and growth potential. Creating a business that can operate efficiently without depending on a single client, supplier, or employee, with recurring revenue and high customer satisfaction, will attract buyers and significantly increase your business’s value.Therefore, when building your business, think about its future potential. A solid foundation, on which any buyer would want to build, is obviously attractive. By doing so, you’ll transform your business into a valuable asset capable of attracting interesting offers in the long run.

The value of a business: why financial performance alone is not enough

In a world where complex challenges often seem insurmountable, a few leaders have demonstrated in recent years that transformative change is not only possible but achievable in a remarkably short time. From addressing social issues like gang violence to revitalizing national economies, these leaders embody the essential principle of leadership, which states that while ideas drive innovation, execution transforms reality.Their stories serve as action plans, showing how determination, courage, and effective execution can bring remarkable results in politics, business, and beyond.<h3>1. Nayib Bukele – The “Revolutionary” from El Salvador</h3>El Salvador, once synonymous with gang violence, has undergone a dramatic transformation under the leadership of President Nayib Bukele. Through his controversial but undeniably effective policies, Bukele addressed a seemingly insurmountable problem: the gangs’ control over communities.His administration implemented unprecedented measures, including deploying military forces and large-scale incarcerations, which led to a significant drop in crime. As <a data-mce-href="https://www.lawfaremedia.org/article/bukele-has-defeated-el-salvadors-gangs-now-how-and-what-does-it-mean-region" href="https://www.lawfaremedia.org/article/bukele-has-defeated-el-salvadors-gangs-now-how-and-what-does-it-mean-region" target="_blank" rel="noopener">Lawfare Media</a> emphasizes, this crackdown not only improved public safety but also restored citizens’ trust in their government’s ability to enforce order. However, critics point out the potential human rights implications, highlighting the balance needed when taking radical measures.<h3>2. Javier Milei – Economic revitalization in Argentina</h3>Few countries have experienced economic turmoil as persistent as Argentina. Decades of mismanagement, inflation, and fiscal deficits left citizens disillusioned. Enter Javier Milei, a libertarian economist who became president and wasted no time in implementing large-scale reforms.Milei’s strategies, based on economic discipline, include reducing government spending, eliminating subsidies, and promoting a market-based approach. In just one year, these measures yielded extraordinary results. According to the <a data-mce-href="https://www.freiheit.org/one-year-javier-mileis-economic-policy" href="https://www.freiheit.org/one-year-javier-mileis-economic-policy" target="_blank" rel="noopener">Friedrich Naumann Foundation</a>, Argentina recorded its first financial surplus in 14 years, marking a historic shift. <a data-mce-href="https://www.reuters.com/world/americas/argentina-logs-first-financial-surplus-14-years-2024-2025-01-17/" href="https://www.reuters.com/world/americas/argentina-logs-first-financial-surplus-14-years-2024-2025-01-17/" target="_blank" rel="noopener">Reuters</a> details how these reforms reduced inflation and increased investor confidence.What makes Milei’s leadership remarkable is his ability to challenge deeply entrenched norms while maintaining public support—a crucial trait for leaders who seek to drive transformative change.<h3>3. Elon Musk and Vivek Ramaswamy – Reinventing fiscal efficiency in the U.S.?</h3>Elon Musk and Vivek Ramaswamy have increasingly become advocates for reforming inefficient financial systems, proposing bold approaches to reduce waste and improve government accountability. Their focus is on streamlining processes and addressing long-standing inefficiencies that burden taxpayers and hinder economic growth.As <a data-mce-href="https://www.bbc.com/news/articles/c5y86vv0wneo" href="https://www.bbc.com/news/articles/c5y86vv0wneo" target="_blank" rel="noopener">BBC</a> highlights, Musk has been vocal about the importance of rethinking traditional frameworks for managing public funds. He emphasizes the need for transparent and efficient systems that minimize waste while maximizing taxpayer value. Similarly, Ramaswamy has supported fiscal policies aimed at eliminating inefficiencies and promoting responsibility in public spending.While their approaches are ambitious and aimed at a global stage, the principles behind their ideas—accountability, innovation, and strategic execution—are universally applicable. Their commitment to transforming outdated systems into models of efficiency offers valuable lessons for leaders worldwide, whether in government, business, or beyond.I know, the U.S.A. is not Argentina or El Salvador, but it represents a much more complicated and complex economic, political, and military environment. Whether they will eventually have the courage to implement their bold policy in a country like the U.S., whether they will have the right context to do so, or whether they will succeed, remains to be seen in the coming years. But the idea is already here!<h3>Leadership lessons: From politics to business</h3>The common thread in these stories is a leadership style based on bold vision and disciplined execution. As a consultant and business advisor, I see these principles resonating not only in government but also in organizations of all sizes. Here are some essential lessons for leaders in all fields:1. Determination and Commitment: Success requires unwavering focus, even in the face of opposition. Leaders like Bukele and Milei faced criticism but stayed true to their vision.2. Building Competent Teams: No leader succeeds alone. These case studies highlight the importance of surrounding yourself with experts who can turn strategy into action.3. The Courage to Take Unpopular Actions: Transformative change often involves making tough decisions. Whether it’s cutting subsidies or fighting powerful gangs, these leaders prioritized long-term goals over short-term approval.4. Discipline and Precision in Execution: Vision without execution is just ideology, and “Ideas are great, but execution is king”. These leaders didn’t just theorize—they acted decisively.<h3>A plan for leadership</h3>Whether in politics, business, or any other field, the formula for transformative leadership remains the same: vision, courage, and execution. Bukele, Milei, Musk, and Ramaswamy remind us that no problem is too big when leaders are willing to challenge norms, innovate, and execute relentlessly.In our roles as business advisors and consultants, we must adopt this mindset, helping our clients not only develop bold strategies but also implement them effectively. After all, the true measure of leadership lies not just in ideas but in their impact on the world, isn't it ?

From vision to victory: leadership lessons from bold global reformers

The IT industry in Romania, which has long been an essential driver of the national economy, has been facing significant changes over the past few years. Known for its rapid growth and ability to attract foreign investments, this sector now faces challenges related to fiscal changes, rising wages, and the loss of competitiveness in pricing.<h3>Evolution of the IT sector: a retrospective view</h3>According to the National Institute of Statistics (INS), the IT&amp;C sector contributed approximately 7% to Romania’s GDP in 2022, generating revenues of over 15.5 billion euros. Growth was driven by international demand for outsourcing services and software development. Also, according to a <a data-mce-href="https://www.revistabiz.ro/angajatii-romani-din-it-printre-cei-mai-competitivi-si-bine-pregatiti-din-regiune/" href="https://www.revistabiz.ro/angajatii-romani-din-it-printre-cei-mai-competitivi-si-bine-pregatiti-din-regiune/" target="_blank" rel="noopener">report from ANIS</a>, the number of IT specialists in Romania exceeded 220,000, with the majority involved in outsourcing projects for Western European and North American markets.However, starting in 2023, several significant changes have put pressure on the sector:1. Fiscal Changes: The elimination of the income tax exemption for IT employees has increased operational costs.2. Outsourcing Market Stagnation: Rising wages and service price increases have reduced Romania’s competitiveness compared to other Central and Eastern European (CEE) countries like Poland and Bulgaria.3. Globalized Labor Market: IT specialists in Romania can now work remotely for companies from all over the world, increasing labor mobility but reducing loyalty to local employers.<h3>IT services that have performed and those that have lost relevance</h3>In the past, outsourcing and software development were the main growth drivers for the IT sector:• IT Outsourcing: According to INS data, in 2020, over 60% of the IT sector’s revenue came from outsourcing. International clients appreciated the low costs and quality of services offered by Romanian firms.• Team Augmentation: Hiring dedicated teams for external clients was a widely used model, allowing companies to offer flexible and scalable services.Currently, these services have lost some of their relevance due to rising salaries and fiscal pressure. Additionally, many companies are facing difficulties in differentiating themselves from local and regional competitors.On the other hand, a few emerging technological niches have gained traction:• AI and Machine Learning-Based Solutions: Investment in R&amp;D for developing innovative products has grown significantly.• Cybersecurity: More and more companies are specializing in cybersecurity services, given the rise in cyberattacks.• Cloud Services: The demand for cloud migration and management continues to grow, making it a profitable niche.<h3>Key challenges for IT companies in Romania</h3>• Loss of Competitiveness in Pricing: Average salaries in the IT sector have exceeded 2,000 euros net per month, making outsourcing less attractive.• Talent Loss Risk: International companies offer higher salaries and remote opportunities, attracting Romanian specialists.• Excessive Dependence on Outsourcing: Most companies rely on outsourcing contracts, making them vulnerable in the face of a global economic slowdown.<h3>Solutions for survival and growth</h3>I see some solutions for the mid and long-term revitalization of the competitiveness of local IT companies, like:• Development of Proprietary Products: Companies should invest in creating software products and proprietary solutions that can generate recurring revenue. Successful examples include SaaS platforms and mobile applications developed by Romanian start-ups.• Specialization in Technological Niches: Focusing on areas such as AI, blockchain, or cybersecurity can add value and differentiate Romanian firms from CEE competitors.• Investment in R&amp;D: According to <a data-mce-href="https://ec.europa.eu/eurostat/statistics-explained/index.php?title=R%26D_expenditure" href="https://ec.europa.eu/eurostat/statistics-explained/index.php?title=R%26D_expenditure" target="_blank" rel="noopener">Eurostat</a>, firms that allocate budgets for research and development are more likely to survive economic shocks.• International Collaborations: Partnerships with universities and business accelerators can facilitate access to new markets and technologies.• Building a Strong Brand: Companies need a clear identity and strong differentiators to attract clients who prioritize quality, not just cost.• Adoption of a Hybrid Business Model: Combining outsourcing with the development of proprietary products and premium services can ensure long-term sustainability. <h3>Conclusion</h3>The IT sector in Romania still has the potential to remain competitive in a constantly changing global context, but it can no longer continue with the strategies of recent years. Instead, it must adopt a new strategy based at least on: diversifying offers, investing in innovation, and developing proprietary products.Only through this approach will Romanian companies be able to overcome the current challenges, withstand increasing competition, and contribute significantly to the national economy, despite the fragile and often unpredictable economic and fiscal context.

The IT sector in Romania at the beginning of 2025: current challenges and future strategies

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Have you ever considered that knowing too much about your company’s product or service could be a disadvantage? Sometimes, not being a technical expert can help you avoid a common trap many founders fall into.&nbsp;Carrie Kelsch, who founded A Plus Garage Doors in 2005, had no experience in garage door repair. Instead of seeing that as a disadvantage, she turned it into an edge by focusing on growth, leadership, and building a high-performing team rather than getting stuck in the technical side of the business.&nbsp;“I didn’t, and I still don’t, know how to fix a garage door,” she says. Instead, Carrie leaned on her team to handle operations so she could dedicate her energy to marketing and growth. This approach reflects the advice in Michael Gerber’s The E-Myth Revisited: to work on your business, not in it.&nbsp;<h3>Not getting taken advantage of&nbsp;</h3>You might worry that if you don’t understand the technical side of your business, employees or vendors could take advantage of you by claiming tasks take longer or cost more than they actually do. To address this, consider tying key employees’ compensation to your company’s long-term success.&nbsp;&nbsp;One powerful strategy is implementing phantom equity. This gives employees a stake in the financial upside of your business without transferring actual ownership. It ensures their decisions are aligned with your goals and motivates them to contribute to the growth of your company.&nbsp;&nbsp;Carrie used a similar approach, rewarding loyal team members with phantom shares. This gave her team a sense of ownership and accountability, which helped her retain top talent. With her team handling the delivery of their service and aligned to the company’s success, Carrie was free to focus on growth.&nbsp;<h3>A transformative exit&nbsp;</h3>In 2024 Carrie sold a majority stake of A Plus Garage Doors to Guild Garage Group, a private equity-backed roll-up in the home services space. Guild valued her business at approximately $70 million, recognizing the strong financial foundation and brand she had built.&nbsp;This deal allowed Carrie to take significant capital off the table while keeping a stake in the company’s future growth. It’s proof that you don’t have to master every technical detail to build a business worth millions.&nbsp;&nbsp;Carrie’s journey shows that you don’t need to be a technical expert to succeed. By focusing on growth, empowering your team, and aligning incentives with performance, you can build a valuable asset that attracts buyers or investors. Working on your business—not in it—frees you to focus on the big picture, turning what might seem like a disadvantage into a competitive edge.&nbsp;&nbsp;Your business is more than the product or service it offers. It’s a system, a brand, and, ultimately, an asset. Sometimes the less you know about how the sausage is made, the better.&nbsp;

The power of working on, not in, your business

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A lot of companies are tempted to resell other people’s products and services as a quick path to hitting their next revenue milestone. While this approach might boost your top line, it often comes at the cost of your company’s long-term value. Acquirers aren't just looking for companies that generate revenue—they usually want businesses that bring something unique to the table, something they can't easily replicate.<h3>Finding a quiet corner of the market</h3>In the early days, Luke Peters sold portable air conditioners and thermostats online. When he made a sale, he’d head to a local industrial supply store, buy the unit, and ship it to his customer. He added no value and operated as a thinly veiled reseller with razor-thin margins.But Luke began thinking more strategically about his business. Instead of competing in crowded categories like air conditioners, he found a quiet, underserved corner of the HVAC market: portable beer and wine fridges. That’s when he started to build his own brand, NewAir. By focusing on this niche, Luke didn’t have to battle the big players like Whirlpool in traditional appliance categories. Instead, he carved out a segment where NewAir could dominate and create a brand that stood out.This strategic shift allowed him to build a brand that was recognized for delivering products that were easy to ship, fun to own, and specifically appealing to a target audience. By owning his niche, Luke unlocked a path to profitability and business value that wasn't dependent on thin reseller margins.<h3>The value of a brand</h3>In The Value Builder System™, product or brand differentiation is referred to as Monopoly Control—the ability to dominate a niche with an offering so unique that competitors can’t easily replicate it. Achieving Monopoly Control boosts your company’s value in three key ways:1. &nbsp; &nbsp; Commanding higher pricesDifferentiated products deliver unique value, making it easier to charge premium prices. Luke transitioned from reselling low-margin portable air conditioners to the relatively untapped market of premium bar and wine fridges. This shift raised his gross margin and net profitability—two of the most critical metrics in valuing a company.2. &nbsp; &nbsp; Increasing customer loyaltyWhen customers see your product as distinct, they are less likely to switch to competitors. Luke’s products weren’t just functional; they delivered an experience, fostering emotional connections that encouraged repeat purchases and stabilized revenue.3. &nbsp; &nbsp; Acquirers pay a premium for differentiated brandsWhen acquirers evaluate your company, they’re making a “build vs. buy” decision. They’re asking, “Should we buy this business or simply compete with it?” Acquirers pay top dollar when they conclude that replicating your point of differentiation would be too costly and time-consuming.<h3>Lasko acquires Luke’s $80 Million business</h3>By finding an underserved niche and building NewAir around it, Luke Peters grew the company into a business generating $80 million in annual revenue. His success culminated in NewAir being acquired by Lasko Products in 2021, marking a significant milestone in his journey from reseller to brand builder.

From reseller to brand builder: Luke Peters’ $80M success

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In the early days of Airbnb, co-founder Brian Chesky went to surprising lengths to gather customer feedback. He would stay with Airbnb hosts to experience the platform as they did, asking detailed questions about their needs and frustrations. Chesky’s commitment to listening wasn’t just about making improvements—it was about truly understanding the customer experience in a way few founders do.Sara Blakely, the founder of Spanx, took a similar approach. In the early days of her business, Blakely would personally visit department stores to watch customers try on her shapewear and listen to their feedback. She also spoke directly with store employees to learn what worked and what didn’t.As Spanx grew, Blakely continued reading customer emails and social media comments to stay connected to their needs. When women began asking for more than just shapewear—like leggings and bras—Blakely expanded her product line in response, fueling Spanx’s growth. Her hands-on approach to capturing feedback helped Spanx evolve into a billion-dollar brand.It’s not just giant companies like Airbnb and Spanx that benefit from this kind of founder obsession with customer feedback. Small business owners can unlock tremendous value by taking the same approach.<h3>William Brown’s journey: from $50 to seven figures</h3>William Brown’s story shows how the Listening &amp; Leveling approach can directly increase business value. Brown began with a simple $50 Word document designed to teach beginners how to trade online. What set him apart was his commitment to listening to customer feedback and using it to continually improve.When customers asked, “What broker do you use?” or “How do I navigate the market?”, Brown didn’t just answer—he adapted his product to better meet their needs. Over time, his offering evolved into a full-fledged educational program with videos, coaching, and additional resources. This not only enhanced the product but transformed Brown’s business, WB Trading, into a far more valuable asset.By responding to feedback, Brown’s product improved and so did its perceived value. This allowed him to raise prices from $50 to $2,000, significantly boosting profitability. His focus on continuous improvement also deepened customer loyalty, reducing churn and driving long-term value in his business.Through these strategies, William didn’t just build a better product—he built a more valuable business, leading to a seven-figure exit.<h3>Applying listening &amp; leveling to your business</h3>How can you apply the Listening &amp; Leveling approach to grow your business?<ul><li>Open feedback channels: Actively seek customer insights through surveys, follow-up emails, or direct outreach. These insights reveal opportunities to refine your offering and build customer loyalty.</li><li>Act on feedback: Quickly implement changes based on what you learn. As your product improves, you can increase prices and boost retention, directly enhancing your business’s value.</li></ul>No matter how big your business becomes, you’re never too big to listen to your customers. Whether you’re building a billion-dollar empire like Sara Blakely or fine-tuning a niche product like William Brown, customer feedback is the key to staying relevant, evolving your offering, and maximizing your company’s value.

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The value of a business: why financial performance alone ...

From vision to victory: leadership lessons from bold glob...

The IT sector in Romania at the beginning of 2025: curren...

The power of working on, not in, your business

From reseller to brand builder: Luke Peters’ $80M success

Listening & leveling: how customer feedback turned a $50 ...