Posts tagged with: buy your business
“You will never make as much money
running a business as selling a business!”
T. Harv Eker
You’re a business owner. Suppose you were a prospective buyer. Would you buy your business? If you were ever going to buy a business, would you want that business to be dependent on one person, or for one person to be the key to every client, every contract and all the financials? What if that one key person were the owner who is preparing to sell the business and get out? Does that make the business more or less attractive to you as an investment opportunity? I doubt it.
Instead, buyers want to know what they are buying. Buyers are looking for three things: current profits, proof or projections that those profits will continue, as well as potential growth in the foreseeable future.
They want to buy a solid, proven systematized money-making machine that consistently produces income and is self-sustaining without lots of change, supervision, or risk.
Whether you verbalize it to anyone or not, every business owner launches his or her business with the intention at some point to be able to cash out.
No one goes into business to go broke. No one goes into business to be able to pay more taxes. The purpose of a business is to make money.
So when is an entrepreneur supposed to make money (or make back everything you’ve invested in building your business)?
The best way to maximize the money you make from the business is to build it as quickly as possible to the point where it is saleable to your ideal buyer. I know, you don’t hear this from your banker, advisors or in any course on starting or building your business.
To make the most money when you sell, plan your exit from the outset. That means make every strategic decision to grow the business with your future ideal buyer in mind. You want to systematize your business to make it buyer ready and buyer attractive on your timeline.
Think about what your buyer wants when they are ready to buy your business.
Design and build out your business to keep clients engaged with your brand, your team and the company, rather than keeping them tied to your personally. That way you will build the value in the business itself, independent of your daily presence.
When you grow and build out your business with your buyer in mind, you will gain greater leverage when negotiating the sale to your ideal buyer.