Calling all entrepreneurs, I have an announcement: you suck at selling your business.
It hurts me to say this as much as it hurts you to hear it.
Most entrepreneurs sell their business when they receive an unsolicited offer.
Everything about an unsolicited offer is wrong. All wrong.
Yes, an unsolicited offer saves time. But you lose money. A lot of money.
How do I know?
I was that kid who started his business out of school with no money, success, or team. Failure was my new best friend. All day. Every day.
My grit kept me in the game long enough to become an “overnight” success thirteen years later with a 9-figure exit.
But my 9-figure exit almost didn’t happen. The first offer to buy my business was a 7-figure offer from a smart and sophisticated buyer.
The prospective buyer was a wolf dressed in sheep’s clothing.
My saving grace was knowing I wasn’t ready to sell my business. Instead, I looked at the unsolicited offer as a way to find my blind spots and learn.
And learn I did.
After turning down my 7-figure offer, I obsessed on mastering the art of selling a business.
What I learned shocked me.
The truth is you will always suck at selling your business until you know five things.
What are these five things?
You Suck At Selling Your Business Until You Have A Chief Exit Advisor On Your Team
Life is the sum of all your choices – Albert Camus
You suck at selling your business until you have a Chief Exit Advisor on your team.
What’s a Chief Exit Advisor, you ask?
A Chief Exit Advisor has one agenda: to look after your best interests when selling your company.
What about my exit team, you ask, won’t they protect me?
While you’ll need an exit team to crush it and win, your exit team focuses on two things.
First, looking after themselves. Second, ensuring the deal gets done, even at the expense of value.
A Chief Exit Advisor helps you dominate and win when it comes to selling your company.
Entrepreneurs build a massive business when they solve a painful problem.
Know this and know this well.
Building a successful business is a different skill set than selling your business.
A Chief Exit Advisor knows everything you don’t know about selling a business.
As a result, A Chief Exit Advisor protects you from yourself.
Most entrepreneurs make seven deadly mistakes when selling their business.
Buyers know these mistakes and also pray and hope you’ll make them.
Every mistake you make takes money out of your pocket and puts it right into your buyer’s pocket.
Your Chief Exit Advisor will reveal a secret every investment banker doesn’t want you to know.
What’s the secret, you ask?
Keep reading to find out.
You Don’t Know The Secret Your Investment Banker Doesn’t Want You To Know
Knowledge is power – Francis Bacon
You suck at selling your business until you know the big secret your investment banker is hiding.
What’s the secret?
Your investment banker’s best friend is your future buyer.
Like yourself, your investment banker is in business to be in business.
You, my Rockstar entrepreneur, are a one-time transaction for your investment banker.
Even if you defy the odds by creating and selling another company, you have a total of two transactions.
Your future buyer will have many transactions with your investment banker.
And it’s your future buyer who keeps the lights on and provides a great living for your investment banker.
What does this mean for you?
Know this and know this well.
Avoid any situation where your investment banker has to choose between you and the buyer.
If your investment banker has to choose, you’ll lose. Every time.
Now you know.
Does this mean you shouldn’t hire an investment banker?
Not a chance.
It’s the opposite. You will dominate and win when you know how to choose an investment banker.
But wait, there’s more.
You suck at selling your business until you know three more things.
What are the three things?
There’s only one way to find out. Keep reading.
When Your Business Model Sucks You Suck At Selling Your Business
Good design can’t fix broken business models – Jeffrey Veen
You suck at selling your business because your business model sucks.
The great news is that when you figure out a business model that works, your company and profits soar.
And higher profits lead to a higher valuation.
My EdTech went from ‘zero’ to ‘hero’ once I implemented two things:
1. Recurring revenue through a subscription-based model
2. Revenue sharing
It wasn’t a coincidence that my EdTech was living the life of a Cockroach startup with its business model. Cockroach startups represent what entrepreneurship is all about.
A subscription-based model does two things for your business. First, you have predictability with cash flow. With a good degree of accuracy, you’ll know how much revenue to expect each month.
A subscription-based model also means you’ve created traction with customers. In other words, you’ve given your customers a reason to want to come back and do business.
Think Spotify, Netflix, or Amazon Prime.
Revenue sharing is the rocket fuel for your company’s success and prosperity. Convincing customers to share revenue with your company is difficult.
To achieve revenue sharing, solve a large and painful problem for customers.
My EdTech, as an example, solved the problem of ‘filling the seats’ for online degree programs. By taking all the risk and showing a system that works, universities agreed to share the revenue.
Online students, the universities, and my EdTech were all big winners.
Read and prosper from my article, Why Your Business Models Sucks And What You Need To Do About It.
You may suck at selling your business because your business model sucks today, tomorrow is a new day.
You Suck At Selling Your Business Because You Don’t Have A Virtual Data Room Before Selling
When opportunity comes it is too late to prepare – John Wooden
A virtual data room contains all the information needed for a buyer to decide to buy your company.
Assembling your virtual data room is time-consuming, expensive, and painful.
Most entrepreneurs have their investment banker assemble the virtual data room.
But know this. When you don’t create your virtual data on your own, you suck at selling your business.
Want to know another secret above investment bankers they don’t want you to know?
Every skeleton in the closet that your investment banker finds has you guilty. Forever.
The concept of ‘innocent until proven guilty’ doesn’t exist.
In your investment banker’s mind, every issue discovered lowers the company value.
Forget what you hear about company value having no emotion, and instead, is a number in a spreadsheet.
People buy on emotion first and justify value with logic afterward.
How do you not suck at selling your company?
Create your virtual data room first, before starting the selling process.
Yes, this is a painful, costly, and time-consuming exercise, but it’s worth its weight in gold.
The process forces you to find and fix issues on your terms and time.
You’ll not only have a better company, but you’ll also impress the heck out of investment bankers.
Before you bolt off and prepare your virtual data room, you need to know one more thing. It’s a big ‘thing’ and an important one.
What is this one last ‘thing’?
What You Don’t Know Can Blow Up Company Value When It Comes To Business Blind Spots
We all have a blind spot and it’s shaped exactly like us – Junot Diaz
You suck at selling your business because you don’t know your business blind spots.
And when it comes to selling your business, ignorance is anything but bliss.
Think of it his way. The more blind spots you find and remove, you make your company more profitable and healthier.
Read and prosper from my article Conquer And Win When You Know How To Increase The Value Of Your Business.
My EdTech stumbled upon a huge business blind spot when I asked a customer one simple question.
I asked, “what keeps you up at nights?”
The customer told me that it was more difficult than ever before to fill the seats with new students.
My EdTech, Embanet, was born from solving an industry blind spot of keeping the seats filled.
The new blind spot of filling the seats allowed me to put Embanet out business and replace it with Embanet II.
Embanet II unlocked the power of revenue sharing and skyrocketed company value.
Blind spots are a blessing in disguise.
Your mission, if you choose to accept it, is to find and remove as many blind spots as possible.
Some blind spots will lead to new offerings and opportunities.
But whatever you do, know this and know this well.
You suck at selling your company until you find and remove as many blind spots as you can.
Your customers and employees will thank you as you’ll have a stronger and better company.
I have both good and bad news for you.
The bad news is that you suck at selling your company.
The great news is that you can do five specific things that are like rocket fuel for your company’s profits.
Higher profits give you a higher value and a stronger company that can stand the test of time.
I should know. I was that kid right out of school who started his company with no money, experience, or team.
A defining moment for both my company and myself was receiving an unsolicited offer to buy my EdTech.
I didn’t know it at the time, but I was dealing with a wolf in sheep’s clothing. I said ‘no’ to a 7-figure offer so that I could say ‘yes’ to a different buyer with a 9-figure offer two years later.
How do I go from 7-figures to 9-figures with my exit?
First, I understand that it’s all too easy to suck at selling your business when you don’t know what you don’t know.
Second, it became my obsession to master the art of selling a business. I immersed myself in the merger and acquisition world.
There are five specific things that when done right, will have you not suck at selling your business.
The great news is you have everything you need and prosper, right now.
What are you waiting for?
Here’s to you and your success!
Your BIGGEST Raving Fan,