7 Important Things You Need To Know When Selling Your Business Selling your business may be the hardest challenge you have had to deal with as an entrepreneur. It’s lengthy,Read More
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]]>7 Important Things You Need To Know When Selling Your Business
Selling your business may be the hardest challenge you have had to deal with as an entrepreneur. It’s lengthy, and troubling, and even infuriating at times. And it gets worse if you think that the issues will be resolved once the deal is done. But this isn’t so. As an entrepreneur, you need to have a clear idea about how you will handle this phase.
Here are 7 important things you need to know when selling your business
Take your time to make the decision. Whether you are planning to sell your business to spend more time with your family or invest in a bigger venture, you need to think about your decision for a hundred times. Sometimes, the length and complications of the process disgusts the best entrepreneurs and makes them rethink their decision.
Keep your focus on the reason you want to sell in the first place; and plan ahead.
Detach from the business. Well, you have put in money, time and effort to make your business grow. But think it from the buyer’s perspective – would you buy a business where the owner needs to invest 20 hours a day to run the daily operations? Or, rather one where the owner has the freedom to take off days and go on holidays?
Make sure the business runs smoothly; even without you being part of its daily operations.
Appoint professionals for the task. If you haven’t handled a business sale before, you may have no clue about the process. And if you have, the same may yet be true. It involves legalities, figures, numbers, and an array of documents. And it’s impossible for you to handle it all without specialized knowledge and experience.
Appoint a legal professional as well as an accountant specializing in this particular field.
Learn how to deal with the stress. Appointing professionals isn’t going to help you with the stress. Your legal team will unearth problems you never knew even existed. Your accountant will ask for figures you never knew anyone required. And dealing with it all will often feel too exhausting.
Cultivate a positive attitude; always remember that the professionals are for your help.
Set a realistic value. Every entrepreneur thinks of their endeavor as the best in the market. And this reflects in the price you set when you decide to sell your business. The only problem is – the buyers may not have the same opinion about it. Well, it’s true that they want to buy your business, but they want to do it at a reasonable price.
If you think you are biased, opt for an objective opinion before you decide on it.
Be wary of debts and documents. If you have adequate time to plan before you sell your business, you have the window to get rid of any debts you have incurred. Otherwise, it will lower the amount you get after the sale. Also, pay attention to any documents you have signed in the past that adds to your liabilities.
Discuss every detail with your lawyer and accountant; and get their advice about these.
Assess your team’s capabilities. If you have put together a winning team, it will prove to be one of your assets when you sell. But if your team comprises of family members, who take their paycheck just because they are family, or of employees who will never find another opportunity, you are in trouble.
A buyer will evaluate the capabilities of your team; do it beforehand and take measures.
Selling your business is a big decision; you need to plan from the day you decide to do it.
Walk Away Wealthy by Mark Tepper – Listen to my interview with Mark here
Final Act of Ownership by Jerry Baltus – Listen to my interview with Jerry here
Sell Your Business For An Outrageous Price by Kevin Short – Listen to my interview with Kevin here
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]]>A summary of things you should know about Final Act of Ownership according to Jerry Baltus Introduction In this episode Jerry Baltus provides his expert opinion on exit planning whenRead More
The post A Preview of Final Act of Ownership with Jerry Baltus appeared first on The Entrepreneurs Library.
]]>In this episode Jerry Baltus provides his expert opinion on exit planning when it comes to selling your business. The difference with Final Act of Ownership is that Baltus focuses on small businesses and talks directly to business owners only. This book is less technical and is written to make it easier for a lay person to follow. Most business owners who read the book may not realize all the ends and outs of what it takes to sell the business and people only get one shot at this for the most part.
What I find is that other resources on this topic tend to be targeted at larger businesses and not so much at the smaller ones. My book is less technical and is written to make it easier for a lay person to follow. Most business owners who read the book may not realize all the ends and outs of what it takes to sell the business and people only get one shot at this for the most part. It’s meant to educate the owners not the professionals that might be involved.
The reader can skip through it and read different sections. I think it reads fine from beginning to end as well but there are tidbits of information throughout that if you were interested in a specific topic you would be able to read just that chapter and get a sense of it. I am also proud of the information in the book of the emotions of buying and selling which is a topic that is not often talked about.
The one lesson that I repeat through the book is this idea of not waiting until the last minute. Even when you start a new business, it’s important to be aware of the things that create value and begin working on those things immediately.
The book starts out talking about the emotions involved in buying and selling your business. We talked about the fears that a business owner might have in never having sold a business before and how to go about it. I think there are a lot of business owners who have the idea that their business has no value and there is sometimes a lack of trust among small business owners about some of the professionals that could really help. We deal with those emotions; we deal with the idea of the culture that the owner wants to maintain with the business so that a new buyer would be able to carry on the legacy that the owner has created.
The second chapter talks about the various types of buyers that you might look for and why certain types of buyers would be attracted to certain businesses. And how the buyer might impact the actual evaluation of the business or the price they would be willing to pay.
Chapter three talks about valuation and we talk about the numbers and what your business is worth on paper. I would like to stress that valuation is only skin deep, it’s important to know but it doesn’t necessarily determine the price. The price is always determined by what the buyer is willing to pay and what the seller is willing to sell the business for. Valuation is really helpful in terms of educating both the buyer and the seller in terms of where you are at.
Chapter four takes a different view of valuation and it’s based on a gentleman that I’ve come to know named John Warrillow who wrote a book called Built to Sell. John did a great job talking about the non-numerical factors that make up valuation and he created a tool called the sellability score which I find tremendously useful in educating businesses. We talk about the level of satisfaction that the customer has and the type of uniqueness that the business has in its market and the growth potential.
In Chapter five we talk about preparation for sale and having a strategic plan as you prepare your business for sale. The buyer might be interested in knowing what the seller’s viewpoint of the businesses future is so that they have a feeling that there is a future. One of the most important things is we try to educate people how you go about creating a list of target buyers for your business.
Chapter seven is short but it deals with putting a team together and not trying to do this all on your own.
“Before you think about selling your business, ask yourself if you’ve built a business that supports your life. If it does support your life, it probably can support someone else’s life too, so you have a sellable business. In the final act of ownership the business you’ve built may now be able to support the rest of your life as well. “- Jerry Baltus
I am located in Plymouth, Wisconsin. I have been a business coach for nearly eight years and have built my business around helping business owners be more successful in their business in a variety of ways. I am an avid reader and bicyclist too.
I really didn’t start out to write a book, I just wanted to write a white paper to support some of the work that I do in regards to exit planning with business owners. It grew as I realized that familiarity with all the aspects of selling a business just was not there. As I started to write I realized I had a lot to say on the subject and it grew in to a book.
Outwitting the Devil by Napoleon Hill
Buy Final Act of Ownership by Jerry Baltus on Amazon today
Visit Baltusgroup.Advicecoach.com for more information about the book and business coaching
Follow Jerry Baltus on Facebook and Twitter
Download the full transcript here
Listen on iTunes, Stitcher , and SoundCloud
Related books: Walk Away Wealthy by Mark Tepper | Sell Your Business For An Outrageous Price by Kevin Short | From Idea To Exit by Jeff Weber
Relevant advice and tips: 7 Important Things You Need To Know When Selling Your Business
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