Are you selling your business or thinking about selling your business?
You’ve mastered the entrepreneur life.
Where you are, right now, is what entrepreneurs dream about.
If you’re anything like me, you likely failed your way forward. You found out what didn’t work so you can focus on what worked.
Along the way, you found a massive problem affecting many people. The problem is so painful that people pay you to take their pain away.
You’ve mastered the art of being pain relief for your marketplace.
This is why you have a profitable company and why you’re now selling your business.
You’ve learned the nuances of your marketplace and what you need to do to be successful.
Easier said than done.
Selling your business is no different.
Want to be successful in selling your business and maximize your value?
Of course you do.
Know this. There are a different culture, language, and procedures for selling your business.
Most business owners never clue in and leave money on the table when selling their business. Lots of money.
And trust me, I should know.
Remember me? I was that kid who started his business right out of school with no money, experience or team.
Despite the odds, I created a 9-figure exit for my business.
But I invested two years of my life learning the ‘game’ before I even thought of selling my business.
What I learned shocked me.
But I’m glad I learned it.
When it comes to selling your business for the greatest value, you must master these five things.
What are these five things, you ask?
Keep reading to find out.
Take Care Of Your Business So You Can Take Care Of Business
It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently. – Warren Buffett
When it comes to selling your business, know that the process takes time. More time than you could ever imagine.
Accept the fact that time will no longer be yours when selling your business.
Where and how are you spending your time?
Investment bankers. Buyers. Accountants. Lawyers.
And I’m only starting.
Let’s not forget about presentations. Lots of presentations.
When it comes to selling your business think of it as your new start-up that demands all your time and attention.Click to tweet
The process of selling your business forces you to take your focus off your business.
What about your customers and employees, you ask?
I promised myself to keep the business front-and-center. No matter what.
I fought the good fight. And lost.
Selling your business will consume every fiber of you. It did for me.
And here’s the kicker. Despite your best intentions, there is never a guarantee that the sale will go through.
The point of selling your business is to hand over a thriving and successful business to the buyer.
How do you ensure you take care of business so you can take care of business?
That’s t our next topic.
Build The Right Team Before You Even Think Of Selling Your Business
Never doubt that a small group of thoughtful, committed people can change the world. Indeed. It is the only thing that ever has. – Margaret Mead
Your team is everything and the only thing.Your team is the deal maker or breaker when it comes to selling your business. Choose wisely.
Why is your team so important?
Think back to when you started your company. It took you years to master the art of running a successful business.
And you’re likely still learning.
When it comes to selling your business you don’t have the time to learn the nuances. And even if you did, you can’t do it all.
The right team saves you from making costly mistakes. And it’s your team that keeps you focused and frees up your time so you can maximize your value.
Still not convinced?
When it comes to your team, remember the African Proverb:
If you want to go fast, go alone. If you want to go far, go together.
My exit wouldn’t have been a 5-figure exit, let alone a 9-figure exit, had it not been for the team.
And reap the rewards. Big rewards
Who is this team, you ask?
Keep on reading to find out.
The Top 5 You Need For Your Team
Who are the magical five that you need for your team when selling your business?
If you’re thinking of not using an investment banker and selling your business on your own, good luck.
You’ll need it.
Take your passion and belief and channel this into building your team.
The right investment banker has the golden Rolodex to find your prospective buyers. And it’s that same investment banker who ensures you put your best foot forward.
Find an investment banker who specializes in your industry.
To maximize value, find a lawyer who specializes in mergers and acquisitions.
Follow the lead of Dorothy from the Wizard of Oz and know that you’re not in Kansas anymore.
You better believe you need top-notch accountants. And no, you don’t need one of the ‘Big 4 Accounting Firms,’ but you do need a sharp accountant.
While you’re at it, find a tax specialist and investment advisor well before the sale. After you receive your millions, expect Uncle Sam to be knocking at your door. Pronto. And you better be ready.
Last but not least is your management team. It’s your management team that is key to helping maximize your value.
A prospective buyer needs to know that there is life after you leave the company. If not, your value suffers. A lot.
As you think about your team, know this and know this well. Your team must work for you and not the buyer.
The only exception is your investment banker. For your investment banker, you’re a one-time transaction.
But prospective buyers for your company do many transactions with the investment banker. Follow the money.
That what your investment banker does. And this is why your investment banker has your interest in mind but is loyal to the buyers.
Next up is finding out what you don’t see, but your team does. Ignore at your peril.
Ignore what, you ask?
Keep on reading to find out.
Find And Fix Your Flaws Before Your Buyer Does (At Your Expense)
We all have a blind spot and it’s shaped exactly like us. – Juno Diaz
There’s nothing worse than a blind spot to reduce your value or even stop you from selling your business.
Your flaws are blind spots.
The only question is whether you or the prospective buyer will find your flaws first?Find and fix your flaws before your buyer does (At your own expense).
Here’s a quick story for you.
A few years before my 9-figure exit, a company approached me to explore a ‘partnership.’
In the world of selling your business, the word partnership is ‘code’ for buying your company.
I wasn’t ready to sell but realized the experience was valuable.
I made every rookie mistake that you could make. But that’s OK because I knew my outcome. And my outcome wasn’t to sell.
The experienced buyer presented me with a five-figure offer. To the buyer, I was a ‘country bumpkin’ who was prime for the taking.
Was it a waste of time?
Not a chance. Although there was no deal, prospective buyer gave me the gift of seeing most of my company’s flaws.
From that day forward my mission was to find the flaws and fix them.
It made for a better company and happier customers.
And a 9-figure exit.
Create The Highest Price Through Many Bids
To have one choice is no choice. To have two choices is a dilemma. And to have three choices offers new possibilities. – Virginia Satir
If I’ve learned nothing else in business, it’s these two things.
First, when it comes to negotiations, never be the first to suggest the price.
Second, when selling your business, you’ll get the highest price by having an auction.
What’s an auction?
An auction is every seller’s dream and every buyer’s nightmare.
The more companies that bid on your business, the higher the price.
How do you create an auction?
Your investment banker.
An auction is why the right investment banker is crucial and worth every dollar.
For a happy and successful life ensure you have at least three choices for every decision.Click to tweet
It’s strike one, two, and three when you deal with only one offer. The buyer calls the shots and knows it.
When you’re selling your business, and you have many buyers, you have leverage.
If one buyer doesn’t work out, you move on to the next.
The mere threat of moving on to the next buyer is often enough to get things moving.
Whatever you do and at all costs, ensure you have many offers when selling your business.
Know When And What To Say To Employees And Customers
Wise men speak because they have something to say; Fools because they have to say something. – Plato
When it comes to selling your business, most owners get it wrong. All wrong.
Chaos and fear results when you speak too early.
If you speak to late in the process, you create resentment and mistrust.
Knowing when and what to say to employees and customers makes all the difference.
As always, play to your strengths.
Employees are often excited about you selling your business.
Selling your business to a larger company opens up more advancement and opportunity.
Your A-players both know and crave this.
But timing is everything. And you better be sure you know how to simplify for success.
Having your management team on board and in-the-know is mandatory for any buyer.
Buyers will insist on speaking with your management team and customers.
A great investment advisor will help you through the communication process.
Whether you believe it or not, your management team has more credibility with the buyer than you do.
Afterall, you have the most to gain.
When your management team is on board and knows what’s in it for them, let the games begin.
It’s the same for your customers. Afterall, these are the people who got you to where you are.
After the sale, it’s important to speak with your customers. Share the vision. Paint the future.
Let your customers know what’s in it for them.
Once again, let’s turn to a wise African Proverb.
It takes a whole village to raise a child.
And it takes your team, employees and customers to sell your business for the largest value.
When it comes to selling your business, know that you have one chance to get it right.
Miss the opportunity and you may have to wait years for a second kick at the can, if ever.
In this article, I’ve shared the five cardinal sins to avoid when selling your business.
I was the kid who started his company right out of school with no money, team, or experience.
Despite the odds, I created a company that had a 9-figure exit.
What are the five things you must master when selling your business?
- Taking care of your business so you can take care of business.
- Build the right team.
- Find your flaws and fix them before your buyer does (at your expense).
- Create an auction with many bids.
- Knowing when and what to say to employees and customers.
Selling your business is the pinnacle of a long and challenging journey.
When done right, selling your business unlocks a floodgate of opportunities.
But only if you do it right.
Selling your business will be one of the most difficult things you’ll ever do. This is why your mindset before, during, and after the sale is everything.
Start by deprogramming yourself from the success myths you’ve come to believe.
Make the most of your opportunity and value by mastering each of the five areas I’ve revealed.
Put in the time now and you’ll thank me later.
And when in doubt, know this and know this well.
You already have everything it takes to unleash your success. You always have. It’s within you.
You can do it.
I know you can.
Here’s to you and your success.
Your Raving Fan,