25 May 10 Compelling Reasons You Need to Sell Your Business and 10 Tips to Get More for It
Build Your Business Then Sell It!
You can tell the best entrepreneurs from regular small business people. Real entrepreneurs treat their startup company as a phase in their lives and as an investment. They already have an exit strategy, often built into their business plan. This planning ahead is actually a big strategic asset which you’ll read about below and it could be worth millions to you later.
The unsettling truth, is that if you’re not carefully and strategic you could get 50% of what it’s worth or it may be worthless when you finally decide to sell.
Kevin Shorts’ book, Sell Your Business for an Outrageous Price says something you need to hear. The goal of businesses today is more toward building a money making machine and selling it for a big profit. The purpose of business isn’t personal identity, it’s to make money to pay bills and live the best lifestyle possible. If you’re a real estate agent, mortgage agent, music producer, auto insurance company or a solar energy company, the goal is not slavery to a mediocre daily routine. Increasingly it’s about doing what’s necessary to create a winner. In the IT and high tech sector, this is particularly so because the owner needs cash and investors want a good ROI.
Business isn’t like it used to be. It’s national and international with financiers and a host of advisers/consultants optimizing the business like it was a race car. They advise on products, branding, digital marketing and markets, instead of a mom and pop operation where there was a lot of personal connecting, rewarding engagement and satisfaction.
It’s different for most today and its good. A new attitude and philosophy about what business means to you, might help you enjoy serving clients, making more profit, and groom your business for eventual sale. If you’re healthy at 30 years of age, you’re likely going to live a long time. You’ll progress over the years and will develop new skills and passions and the business you started at 28 won’t be all that exciting when you’re 46 or 66. Hanging onto a business you don’t have 100% passion for is a risk.
Exit Strategies for Entrepreneurs
Increasingly, exit strategies are important topics for entrepreneurs. Rightfully so, since the goal is to sell the business — to get out and make a profit. They start with their goal of selling then build their strategy backwards to the present. Brilliant strategists, these new entrpreneurial wizards are. More millennial-aged entrepreneurs are into this, due to how they see the world and themselves. I pay attention to the younger generation because they see the future well. Why not follow them? They’ve created a new culture with a new vocabulary and values that we can relate to.
So you can see I’m writing more on entrepreneurial and investment type topics. Actually, this is a natural fit for me. I’ve learned that as important as passion, dedication, branding, progressiveness, learning, and production are, you can’t do anything without investors. Millennials know this too, and they’re not bashful about going to the internet to do crowd funding to get the funds. And perhaps crowdfunded investors are better investors?
They Became Very Wealthy
I’ve known two entrepreneurs who have made a fortune creating a business. One had full knowledge that they would sell it. I like that idea a lot and you might too. Why? Because despite whatever someone says about passion for a company and an industry, times changes. We change, the market and competition change, our circumstances change, and the economy changes. That’s a lot of change and we shouldn’t ever be so sure that we’ll remain passionate about it after we’ve succeeded past certain personal milestones. Those emotional drivers that we count on, even those inside of us, may not be there through the next 30 to 40 years. That’s why people end up in crisis situations where their cherished business becomes worthless and they’re left with nothing. Things change.
Other than change, creating a business and selling it is an excellent creative experience culminating in a super reward. I don’t think the reward has to be lounging around aimlessly in Costa Rica, California, the Caribbean or Florida. You can start up new projects that are close to your heart. Selling your business then is the step to a new pursuit that makes you even happier.
Here’s Michelle Seiler Tucker on how to get prepared to sell your business. She gets 40% more for her clients
Once you’re in business, you never know where your next adventure will come in. It could appear out of the blue and sometimes those are the most exciting opportunities because they almost seem like magic. Suddenly an offer appears that is perfectly matched to you.
Take a look at Richard Branson and all his exciting new ventures. What a fantastic life he’s had and continues. Do you think he regrets moving on from his original passion of music? He travels all over the world, his efforts are always appreciated even if they don’t create a new fortune. He can, as he says, do things just for the joy and opportunity to do them. He captures all the pleasure possible from his entrepreneurial efforts and he knows when it’s time to get out of a particular business and leave it to someone else with the passion to keep it successful.
Even Sir Richard doesn’t know what’s coming next, but you can be sure investors from around the world know him and will approach him when the time is right. Maybe the right time is now.
Whatever business you’re in currently, perhaps a car insurance brokerage, mortgage financing firm, solar power installation business, or water desalinization company, or real estate brokers, looking ahead to selling your business could be a goal that helps align and focus your efforts better. And you don’t have to do it all with the intent to get rich yourself. Your plan could benefit a lot of people.
Yet, you wont’ do it unless you begin designing your business to capture marketshare and begin to grow. That’s a sizable order although as I mentioned, I’ve known and worked for others who have done it. They were in some strange industries, not my cup of tea, but I respect what they’ve done and what it took. They had a passion for those businesses or propped up a modest passion for the business and made the right decisions to grow it.
Have a Bunch of Fun Business Parties
As I spoke about in a previous post on hyperacceleration in business, designing for growth and having the courage to grow fast are actually insurance against failure. Focus, dedication to the business, not a hobby, and being sensitive to the need for change, including exiting the business. And there are times during these journeys, when at their peak when you need to sell it.
I also know another business person who is still very good at his service repair business, but unfortunately his business is solely him. It’s been a fantastic business for him, but he can’t sell it. I’m going to help him do that though because his brand, dedication, service, reputation, and customer list are worth it. We’ll need a website, social presence, and to hire a technician skilled and younger who can manage the products and services of his business, and handle the new opportunities as well (product sales). And his business doesn’t have to be local. We could franchise it in other cities and make an absolute fortune.
The opportunities are here. We just need to bring entrepreneurs together with marketers and investors and crazy good things could happen.
Things only happen when you bring things together, and given that everyone is busy with their thing, you need to bring them together now, fast, while you’ve got the opportunity. When they’re all together, such as at a party, the chemistry happens. A party then, is a classic example of hyperacceleration, and parties have been happening a long time.
Networking is yet another example of hyperacceleration. Linkedin offers you a chance to connect with a tiny portion of your connections (unless you pay them lots of money). Money opens doors and greases those connections.
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10 Compelling Reasons Why You Should Build Your Business for Eventual Sale
- the purpose of a business is to make money
- you don’t have the skills, resources or connections to take it to the top
- it creates an open minded mindset for investment, deals, and buyers
- it keeps you focused on building a value generating machine
- it keeps you from stagnating and wasting your precious life
- it attracts better business partners, customers, lenders and investors
- it allows you to progress with your life
- you could become very wealthy as others have
- it will give you resources to begin a new business you are more passionate about
- it gives you a breather where you and your spouse can travel and experience life fully because life is about more than working and paying bills
Selling Your Business Needs to be Planned and Prepared For
Tips on Preparing your Business for Sale
- understand precisely why your business is succeeding right now
- understand precisely why your business is going to continue succeeding right through the next 5 to 10 years
- identify areas of your business that need shoring up and fixing
- review your brand and adjust where necessary to appear to the investor’s value and preferences — they’re your real customers now
- get your financial and tax statements from the past 5 years ready and prepared for review
- review any legal, regulatory, licenses, asset and debt issues you’ll be grilled on
- review ownership of brand trademarks, urls, and clientele that your business can’t survive without
- explain how you will transition with respect to major clients who will bolt if you’re not there anymore
- review all contracts with customers/clients and discuss your intentions with them
- Prepare your presale improvement plan — juice it up and polish it for maximum impact.
You can also head to a variety of websites that will fill in all the details of a business sale and the exit strategy. I’ve probably missed some major points here, but the major compelling concept here is what I wanted to get across to you.
Big Picture: that preparing your business for sale in 10 years or so, is a powerful strategy for making it succeed and keeping you from stagnating with your life.
I like this tip on asking for a higher selling price for your business (this should be part of your preparation strategy so you can convince them and negotiate for more)
Business Vision — Breaking Inertia – Trump or Clinton
Quite a few entrepreneurs are super at visualizing and launching a new business. It takes a special person to overcome inertia and create a new company. These are exciting times and the mental gymnastics and emotional poise required to be a successful entrepreneur are high. But once these businesses are off ground and into the maturation phase, they’re no longer fun and full of possibilities. Donald Trump is one of those people who can move mountains with money or branding power. He marries a lot of women yet doesn’t hang onto any of them. He lives for the joy of creation, not the pain of administration.
The US election (Trump vs Clinton) really highlights the intense conflict between creating new or managing the old. Trump is all about creating a new America, with the entrepreneurial ability to make something out of nothing. Hillary Clinton on the other hand likes the daily administration and diplomacy of a “steady as she goes” ship. The bombastic Trump doesn’t hide the truth and the supercilious Clinton never tells it.
There’s no doubt you’re the Trump kind because you’re still reading a post about growth, business and selling. Good luck with your networking and business partying, connecting with ideas people, managers and top investors. Eventually, the right people will appear, probably all at the same time! You’ll be multi-tasking.
You might find thse articles helpful too:
- How and when to sell your business: https://www.entrepreneur.com/article/251622
- Planning to Sell Your Business: http://business.financialpost.com/entrepreneur/planning-to-sell-your-business-prepare-for-the-expected-and-unexpected
- How To Sell To Small Businesses (Infographic) https://www.biznessapps.com/blog/how-to-sell-to-small-businesses/
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