Posts tagged with: sell
Sell your company while things are going really well.
Makes sense. Sounds straightforward enough.
In this context, ‘well’ is a metric of success that will make ideal buyers take notice. What would make your ideal buyer/acquirer take notice? It could be any and all of the following:
- Number of users on your ‘app’
- Viral growth
- New channels you are opening
- Market monopoly opportunity
- Recurring revenue streams
- Happy customers
- Caliber of channel partners
- Growing diverse client base
- Penetration of the marketplace
- Operational excellence
- Strong leadership
- Strong corporate culture
- Achieving revenue, profit margin,
and growth goals
- Measurable value drivers
- Strong forecasts
- Reduced risk
- Maximizing value
- Do you run your business on metrics that can be measured or do you run your business from personal experience?
- Do you hit your goals for the business? Is your business a showplace to be proud of?
- What more could you do so that your ideal buyer starts to take interest in your business?
Timing an External Sales Process
So when is the right time to consider selling the business? When should you launch an external sale process?
First, get clear on your exit criteria. If you don’t know your criteria that would make you say yes to a deal, start there. It’s time for thoughtful consideration of your exit criteria, dreams and goals in terms of:
Second, monetize what you built. To sell well, you should secure:
- the business
- your team
- your family and
- your finances
before starting the transaction process.
Third, determine the best timing before committing to the transaction process.
- What’s the best timing for you personally – 3 years from now, or 3 decades from now?
- What’s the best timing for the business – is it already a turnkey operation, do you have a successor groomed, is the business at or approaching its peak?
- What’s happening in your market – is the market expanding, is it consolidating, are there opportunities your company is in a position to leverage?
Changes and Challenges
Pay attention to personal and family factors, which impact us all. Any number of changes and challenges from retirement, health, or family obligations can compel a sale, even if, those same challenges (e.g., conflicts, litigation, shareholder diversity, disability, etc.) can reduce the value of the business or make the business un-saleable!
You Can’t Sell Well In A Vacuum
In addition to attracting your ideal buyer/acquirer, you also must prepare:
- your company
- your team
- your family and
- your finances
or you won’t be in a position to sell well.
That preparation, planning and forethought takes time, commitment, focus and resources to position your business to sell well. That’s time you can’t be tied to day-to-day operations of the business. It’s imperative that your team can shine hitting your numbers independent of you at the helm. It’s time you need to focus on the strategic imperatives of an ideal transaction and your successful transition.
To Sell Well, Surround Yourself With A Team
It takes a team of experts around you to get all the pieces done and done right. You want all-star specialists around you. Do not accept ‘dabblers’ in any role on that team. Check out the whitepaper: How to Manage a Gaggle of Advisors to Build Your All-Star Exit Team.
The lead-time investment in pre-transaction/pre-transition planning will pay handsome dividends when you sell well to your ideal buyer/acquirer.
Irrefutable statistical evidence confirms that business owners are not prepared for the current market window to sell a business 2013 – 2018.
To take advantage of this sellers window, business owners need to get started formalizing a strong business foundation (e.g., strategic planning, contingency planning, succession planning, transition planning) at the same time as they balance accelerating growth and optimizing value in the business itself.
The research to date suggests that most business owners do not believe this strategic effort is important for them, their company, their team or their family’s future. Just to recap:
- In a 2008 research report entitled Business Transition/ Succession, research by ROCG Americas LLC confirmed that CEOs lack urgency because of the belief that “we can always do it tomorrow – a general feeling of invulnerability.” Survey participants’ No. 1 excuse for not having a written plan is still the same in 2013.
- In the Canadian Federation of Independent Business (CFIB) survey in 2005, “the No. 1 reason given for not having a written plan was that it was too early to plan. This reply was head and shoulders above every other reason given.” Yet, this feeling is contradicted by the facts which show that time is not necessarily on the side of the selling owner.
- Findings by the Mutual Survey of American Family Business in 2007 confirmed the statistical lethargy: “Almost a third have no plans to retire, ever; and another third report that retirement is more than 11 years away. Since the medium age of the current leaders is 51, this means that many people plan to die in office.”
- PricewaterhouseCoopers states in its 2007 report on Canadian businesses succession plans that owners over age 50 “seem unwilling to seriously look into options to transition ownership before they are forced, by age or illness, to give up the business.”
- A full 34% of the CEOs over age 60 in the ROCG 2008 study felt that it was still too early for them to plan their exit!
This “feet first” plan of going out with their boots on (providing no liquidity event, no succession planning, and no future for employees when they close the business) is prevalent. Not planning for the inevitable is equally absurd and irresponsible. And yet this is what 95% of all business owners do.
They are murdering their business. And it is totally preventable.
Change does not come easy or fast. To truly maximize the value of your business and walk away with the highest returns, you need to commit to a 2-5 year timeline that gives you the leverage you can’t get after a trigger event (health, family requirement, corporate or market changes, etc) precipitates your exit.
It’s never too early or too late to plan your exit. Our team at This Way Out Group LLC will take away the fear and frustration and facilitate the exit process and timeline with you.
Most entrepreneurs know they can make a good income running their business day-to-day, but SOME OWNERS INSTINCTIVELY know that their real payday will come only when they exit the business, most likely by selling the business.
That’s when they can access
multiple millions of dollars from their business.
- Is this something you have thought about?
- Do you want your business to produce a multi-million dollar windfall?
- Do you think it’s possible for your business to fund a multi-million dollar reinvention for you?
- Do you know how much your business is worth right now?
95% of all business owners do not have an exit plan – because most owners don’t know what their business is worth. As a result, most owners are walking away with only 50-70% of what their business is worth.
Sadly, most owners and entrepreneurs fail to achieve their dream and get out the way they want to just because of a lack of planning, and forethought. It’s totally preventable.
Those CEOs who invest the time, effort and expertise to plan their exit and make their business appealing to buyers are among the 5% who achieve their dream and the lifestyle it offers.
To discuss how you can be among the 5%, call or email me. Let’s explore strategies to identify what will work best for you.
If you cannot execute a plan now to achieve these objectives, you can’t afford to wait. Call today.
Think of the most successful business leaders you know. They are never idle. They don’t stand still. They are always moving forward. They don’t look for problems and opportunities just from one angle. They keep moving and view their business from all directions. They see the shadows and explore what’s hidden in those shadows. To accelerate growth and maximize value, they seek out and find new solutions and get meaningful, life-changing results that their competition never will. In every decision they make, they are always asking; “is this decision taking me closer or pulling me away from my long-term plan to sell/scale or find a successor.”
Obviously, there’s much more to learn and much more that can be achieved to make your business a wealth producing machine that allows you to transition to your reinvention, fulfill promises and walk away with the financial freedom to live the life of your dreams.
I can help you get there faster, sooner. I can make the job easier, and far more enriching for you if you’re interested in my personal assistance.
When was the last time you thought about how to cash out of your business?
Is it a topic you avoid? Do you only think about it when you are at the end of your rope after a really bad day? Is it a black hole you know nothing about?
Or do you include the long-term impact/implications in every decision you make? And tie every short-term decision and strategy to where you want to end up so you can cashout?
HARVEST YOUR WEALTH gives you the foundation for all those decisions in bitesize pieces so you can start planning early, to get out on your terms and on your timeline.
It’s never too early or too late to plan your exit. But you must make a plan and start executing on it now if you intend to cash out of your business to cash in those plans for reinvention (what comes next).
Start here, http://harvest-your-wealth.com
HARVEST YOUR WEALTH is for business owners who need to start thinking about how to sell, scale or pass on a business to successors. It’s not for advisors, transaction experts or buyers and their agents. It’s for you, the business owner who has put their life, spirit and soul into the business.
It’s only when you cash out of your business, that you can begin to cash in on the future of your dreams. To pursue that reinvention, you must have a plan to get out with the maximum value you can achieve for your business.
Quick, simple and cheap will shortchange you when selling a business.
Are You Ready To Sell Your Business?
Is Your Business Ready To Be Sold?
Are you ready to sell your business? Is your business ready to be sold?
These are not the same question although the answers must be consistent.
Have you thought about the former but assumed the latter to be true?
Are you prepared to let go of your business, to get out now? Physically? Logistically? Financially? Emotionally? That’s a series of discussions right there that you must address before you can sell your company. Those are questions you will address as your team, your broker and your family ask them.
But What About The Business Itself?
What have you done to make the business buyer ready or buyer attractive?
What have you done to prepare the business not just you for this transition? You’re transitioning to your next adventure, venture or avocation. Your business will transition to new ownership in a financial or strategic sale. These transitions can be easy or very tough.
Exit transitions for you the owner can be easy when you have a detailed plan for your next adventure, avocation or indeed a new business – something to look forward to, something to plan for on your terms. Your exit transition can be tough when you ignore what comes next, leave your reinvention as a black hole that will magically fill itself in or don’t communicate with the most important people in your life about how this transition will impact them.
For the business itself, these same issues arise. Allowing the business and your team to transition smoothly and successfully to new ownership is your responsibility. Indeed, that successful smooth transfer is a key to the value a buyer will pay for. To make the business transition easy, you must prepare the business to be an attractive asset for the buyer. In the next post, we’ll list eight questions to consider to ensure an easy and profitable sale when you exit the business.
A Fundraising Campaign to publish Exit Essentials – How to Get Out on exit planning for entrepreneurs who want to sell, scale or pass on their business to a successor in the next 3-5 years.
I am launching a campaign to raise funds on Indiegogo.com, to publish my second book: Exit Essentials – How To Get Out. Exit Essentials is about exit planning for entrepreneurs like you. Exit Essentials educates and prepares business owners to be able to monetize their business when they plan to get out, instead of simply shuttering the business and walking away. Exit Essentials reveals the secrets the transaction experts want entrepreneurs to know before selling a business, but no one tells them.
In Exit Essentials, I introduce the 95% of all entrepreneurs and business owners who do not have an exit plan for their business; to the decisions, options and opportunities they need to know about years before they decide to get out of their business.
“[Exiting small business] owners are preparing for the deal of a lifetime with possibly zero experience.” – (MorganStanley SmithBarney publication, 2011) [via Blackbridge Newsletter 2011]
They think they’ll be able to sell when they want for what they want with no lead-time or preparation of the business, the team or the business owner. That’s a diet of hope and promises that will satisfy no one.
“Because of a lack of pre-planning, most business owners are leaving up to 50% of the value of their business on the table when they exit. This situation is totally preventable.“
Exit Essentials should be required reading for all business owners in order to take control and achieve their goals in the business and beyond.
Every donation at http://indiegogo.com/exit-essentials is important to get this book published and distributed. To thank donors in tangible, measurable ways, I’m offering some big perks. In addition, supporters of this fundraiser will be able to get the book Exit Essentials and other rewards first.
I need your support to get Exit Essentials published fast, so owners like you will be prepared for the coming sellers’ market. Thank you very much.