How a Disciplined Approach to Growth Led to a $250 Million Sale – Yahoo Finance

What lessons can an entrepreneur learn from  Michel Lotito? AKA Monsieur Mangetout (Mr. Eat-It-All). Lotito had, let’s just say, unusual dining habits. His diet consisted of bicycles, TV sets, beds, shopping carts, skis, a coffin, multiple chandeliers, and in 1978—his greatest feat of all—a Cessna 150 aircraft.
I could make a joke about needing a cast-iron stomach, or a Pac-Man-like hunger to launch a business, but the real takeaways are twofold: First, Lotito kept the end goal in sight during every course of his dinner (propeller, engine, altimeter, etc.); and second, he comfortably took his time getting there. He didn’t finish chowing down on the Cessna, for example, until 1980. 
Every smart entrepreneur starts their business with the end in mind. As they infuse their heart and soul into the business, they maintain focus on growing its equity—knowing that it will take time and that they must break down each giant leap into smaller, more digestible steps. 
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Bob Eisiminger never ate a TV set, but he definitely has the drive and work ethic to realize an ambitious vision. The evolution of his company, Knight Point Systems, is a lesson in patient, calculated decision-making with a clear goal in sight. Knight Point Systems began life in 2005 as a value-added retailer (VAR), a company that sells technology products along with the set up and service required to get them up and running (the value-add). This approach fits neatly into the “Moneymaker to Moonshot” business model I often tout: It solves a problem that a large organization has, namely de-risking new technology. Bob’s market consisted primarily of agencies within the U.S. Department of Defense—a natural fit given his military background. 
Value-added retail isn’t a great way to build equity. Margins are low and they don’t improve much with scale—an absolute requirement to achieve a high multiple in a sale. But it helped Knight Point build a customer base and positive reputation. This meant that over the years, contracts got bigger—from single products to systems to end-to-end solutions. By 2017, the first year Bob joined the Birthing of Giants Fellowship Week, the company was handling yearslong managed services contracts, a far more profitable and scalable business model than VAR. It had also built a $1.2 billion backlog, making it a very attractive acquisition target. 
Bob’s Cessna 150 was understanding that it was time to sell, but he had a problem: His current recruiting process wasn’t bringing in talent fast enough to keep up with demand. So, just as Lotito broke his meal down part by part, Bob dismantled his business and rebuilt it from scratch. The decision saved Knight Point some $75,000 per month and improved the company’s long-term prospects—which in turn increased its value.
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In 2018, Bob returned for another Fellowship Week and set himself a goal: Sell the company within the year. Spoiler alert: He did just that, to the tune of $250 million. Bob finished his Cessna 150.
Are you working hard to build your company’s value? Are you taking the right steps—small and large— to make it happen?
Lewis Schiff runs the Birthing of Giants Fellowship Program, a one-week guided strategic planning process that’s attended by the owners of the fastest-growing companies in the world. He also runs Moonshots & Moneymakers: The Oxford Innovation Conference for American Entrepreneurs. 
Hear how Bob Eisiminger and other entrepreneurs built their companies from moneymakers to moonshots by signing up for Birthing of Giant’s free monthly video series, How I Did It.
The post How a Disciplined Approach to Growth Led to a $250 Million Sale appeared first on Worth.
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