Last week James Harden declared, “Houston has a problem,” and within days had decided to take his talents – and $40 million dollar contract – to Brooklyn.
While reflecting on how it might feel to earn over $500,000 per game, I was startled to overhear the EPSN sportscaster noting that if you tabulated the salaries of 12 other Houston players and COMBINED them, they would still be less than Harden’s paycheck – reminding me once again that NBA contracts aren’t necessarily fair – and haven’t been for decades.
Don’t believe me? Then consider this. While playing for the Chicago Bulls during the 1995-1996 season, Michael Jordan was the 32nd highest-paid player in the NBA. That’s right, the greatest basketball player of all time was paid LESS than the two Danny’s that year – with Danny Ferry making nearly a million more than Jordan and Danny Manny earning almost DOUBLE during the 1995-1996 season.
Was it “fair” for Michael Jordan (who won 6 NBA titles from 1991 – 1998 and was NBA Finals MVP each time) to also earn significantly less than A.C. Green and Sam Bowie? No, no it wasn’t – but that’s the thing with deals – there’s no promise they’ll be fair, and even the best can get the short end of the stick.
The Dreamriver Group specializes in helping business owners successfully navigate the exiting process AND GET A FAIR OFFER by focusing on the one thing that sophisticated buyers consistently PAY MORE for – VALUE.
After analyzing more than 55,000 businesses, our partners at The Value Builder System™ have discovered that companies with a Value Builder Score of 90+ (out of a possible 100) are receiving offers that represent a multiple of pre-tax profit which is TWICE that of an average-scoring business.
In addition, companies achieving a score of 90+ are also more than twice as likely to have received a written acquisition offer in the past 12 months compared to the average-scoring business. (Translation: More offers means more leverage. More leverage means more control. More control means better terms. And better terms means more money and an exit process that respects you, your family, and your company).
When an elite athlete is heading into a “Contract Year,” they make every effort to maximize their stats, tangible contributions, and overall performance to ensure potential suitors will fully appreciate their unique value, and ideally start a bidding war with other teams vying for their services.
Whether business owner or basketball player the concept is the same. Dreamriver partners with business owners to focus on the 8 key factors that drive valuation in the eyes of buyers, and works to make each of these factors as strong as possible. When done correctly, these integrated financial and strategic considerations will build to a crescendo, resulting in multiple offers at desirable multiples.
You only exit your company once, and while there’s no guarantee you’ll get a “fair” price from the market, there are specific proven steps you can take NOW to ensure you’re maximizing the value of your business by focusing on those priorities most important to potential buyers.