Business Service Offerings and Liquidity | business services

“Being all things to all people” sounds good, but in most cases it reduces the liquidity of a business. Business liquidity encompasses the number of prospective buyers, the business valuation, and the amount of time required to market the then close the deal.o The most liquid scenario is a co-located web hosting client base, with no data center, offices, or employees, and only one owner/decision maker. This type of business can be under contract to be sold within 48 hours. (Post ‘Letter of Intent’ due diligence, contract preparation, integration plans etc. all take a bit of time.)o The least liquid scenario is a web hosting company, which offers design services, has offices, a data center, and offers related services such as access, marketing services etc.Valuation Difference:
Something I have seen many times is the owner/decision maker on the sell side has heard web hosting company valuation formulas and wants to apply that formula to his company. Inevitably the owner is disappointed when the offer comes up short in their mind, and passes on what actually is a fair valuation.Design Services:The decision to staff up and start offering web design services to complement the pure play hosting recurring revenue is a huge decision with regards to the effect on business liquidity. Of course design services can be a natural fit with hosting clients by helping to reduce client churn and up selling existing clients. However, the value of the revenue and cash flow generated from one-time design jobs is no where near the value of the recurring hosting revenue and cash flow.Negatives of design departments when it comes time to sell:o From the buyer’s perspective, acquiring the entire company and keeping the design efforts going is risky. It’s 50/50 whether the key design people will stick around after closing … regardless what they or the seller states. In addition, if you have to replace key people, the new staff will not have the relationships with the client base.o From the buyer’s perspective, acquiring the entire company then canceling the design efforts is usually a risky decision as well. There are offices to deal with in addition to staff which needs to be let go … both time consuming and detrimental to the existing client base.o My estimate is for every 20 buyers of a pure play hosting company, there are only 1-2 buyers for hosting design shop combo’s.Internet Data Center:Investing in an IDC may increase the value of the entire company by an enormous amount over time, but definitely reduces the liquidity in the short run. Typically smaller web host co-locate in the beginning, then at a later date acquire their own data center. In turn, the company will then offer space to other smaller host hence creating yet another service offering.Owning an underutilized data center reduces the number of one type of buyer … the “cash flow buyer”, yet invites a new category of buyer, the “asset and cash flow buyer”. The later buyer is looking to both grow through acquisitions and make the swap from co-location to owning the data center. The less remaining capacity of the data center, the more of a cash flow type deal it will be, hence usually more liquid.

DDGS Tests to Ensure Quality Feed For Livestock and Poultry | livestock

With the price of corn steadily rising, other means in which to feed the nations’ two and four legged food sources are being pursued. Corn, once considered the unquestioned king of all eatable crops, has grown unpopular over the years as a human food product as both unnecessary and expensive to produce.These days, it costs more to produce and refine corn than it can even sell for as food in the first place. Switching to producing ethanol based products is seen as both more cost effective and environmentally friendly.DDGS stands for Distillers Dried Grains with Solubles. It’s a by-product of the distillation process. As ethanol production has grown increasingly popular, DDGS have become an efficient, effective way to feed the nations livestock and poultry. It is an effective way to cut back on waste.Worries over the quality and nutrient values leave many resistant to it, preventing it from becoming the nation’s primary source of animal feed. Sold primarily as a protein source, it accounts for about 15 to 20 percent of a cow’s diet. As prices for DDGS fall, more studies are being done to determine just how much of a cow’s diet can be replaced.Each animal differs when it comes to diet and many of the studies have been focused on pigs, which leaves dairy farmers and livestock producers hesitant to fully embrace this new trend. As DDGS can slowly lose its nutritional value over time, there are also concerns about its actual cost effectiveness.The economics concerning cost effectiveness related to feed prices is determined primarily by three main factors. Feed prices, the cost of changing out feeds, and the overall difference in feed performance are all heavily taken into account before any drastic changes are made. In most cases, animals have taken favorably to their new diets, with few problems. Other farmers worry though about the catastrophic outcomes should their own animals not make the switch so conveniently.So far, the switch to DDGS has done little to affect the favor and substances of the nation’s animals as they are consumed by the public. Taste, texture and flavor all rated equally to those animals that were fed other diets. For the most part, nutrients remained equal among all the animals in relation to other feeds.Among other worries, many Americans are concerned about the things they put in bodies. Many swear they can taste the difference between grass-grazed cattle and feed based cattle, and can explain how farmed salmon is different from open sea versions.Many ranchers are worried that adding DDGS will cause a barely informed public to raise unnecessary concerns about the differences of how their burgers taste. Informing the masses of change can be an expensive, tricky and sometimes futile situation.A fickle meat-consuming public can lead to drastic drops in the meat market. Teaching and informing an already confused public about what DDGS actually is, is a task many in the meat industry would rather not face. With the push to increase ethanol in the U.S., Americans might just not have a choice.