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 Walk Away Wealthy according to Mark Tepper Introduction In this episode Mark Tepper with Strategic Wealth Partners shares his book Walk AwayRead More
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]]>In this episode Mark Tepper with Strategic Wealth Partners shares his book Walk Away Wealthy. This book is the perfect fit for entrepreneurs or business owners looking for an exit strategy for their business plan. This is a book that is specific to building wealth for entrepreneurs and will focus on both the liquid and the illiquid investments. As an entrepreneur this is really the only book you need to read on wealth management.
This is a book that is specific to building wealth for entrepreneurs. It will focus on both the liquid and the illiquid investments and as an entrepreneur this is really the only book you need to read on wealth management because it covers both sides of the equation.
I would recommend reading it from beginning to end. It’s broken up in to three different sections and chronologically set up to be read that way.
Planning is a process, not an event. The longer you wait to get started, the less money you’re ultimately going to get for your business. Begin your financial and exit plan as soon as possible and continue to revise it along the way.
There are three main sections in the book; building value, monetizing value and preserving value. We have twelve different secrets that you need to know if you really want to have the most financially successful life as an entrepreneur.
Secret #1 is creating your exit plan before you need it. What this chapter talks about is there is a misconception that you don’t need to focus on your exit plan until you are ready to sell and the fact is you should begin working on your exit plan the day you start your company. Even if you are a startup you need to start focusing on what you are eventually going to get out of that business. The only reason you should be going into a business is to hopefully one day sell it at a substantial profit.
Secret #2 is knowing the value of your business. One of the biggest issues that entrepreneurs have is they are emotionally attached to their businesses and because of that they over value their company. We talk about how evaluations are calculated and how to go about determining your valuation without costing an arm and leg.
Secret #3 is value is more than cash flow. Earning is important but there are two parts of the valuation equation which is earnings times a multiple. The multiple is going to be determined based on how risky a company is in the eyes of the acquirer. The most risky the company appears to be, the lower the multiple, therefore the company is not worth as much. The less risky it is, the higher the multiple. This chapter focuses on how to increase the multiple.
Secret #4 is how to make yourself expendable and it talks about how to remove yourself from the operations of the business. You need to build a business that can stand on its own and we talk about how to do that.
We then hop into the monetizing section of the book and the first secret there is selling is your best exit option. If you are looking for the best financial reward, the best way you can go about doing that is by selling to a third party. We talk about how complicated that process can be but we also try to explain it so that there’s no curve balls if and when you do decide to go through that process.
The next secret in that section is if you can’t or won’t sell, consider an internal transfer. An internal transfer would be possibly selling to your family members, your key employee or your management team. Unfortunately, if you decide to go that path, you are not going to get the same financial payday. We are going to tell you how to go about doing that in the most efficient manner possible.
The next secret is to never sell your business yourself. In our experience a good investment banker is worth their weight in gold. They are typically able to get you significantly more money than what their commission cost you. What we do in this section is we talk about how complicated the process can be, how you can screw it up if you try to do it alone and we map out exactly how investment bankers get paid. There is more to a good deal than a sale price. This chapter is all about what are the other terms of the deal that you need to pay close attention to.
The last section of the book is preserving value. The first secret there is having a financial adviser create your personal financial plan. What we focus on is to do it now, don’t wait until after the sale. The next secret is plan for the unexpected and make sure you are covered if anything happens. The secret after that is to not bet your retirement on starting another successful business. We talk about ways to protect you from starting another business, losing all your money and then having to go and find a job because that puts you in a pretty awful situation.
The last secret is to find something to fill the void after your liquidity event. Identify what it is that you’re really passionate about prior to selling your business and pursue those passions after.
There is a term that I refer to that kind of summarizes the purpose of the book and that term is irreversible financial mistake.
“Once you sell your business you can’t give the money back and start growing it again, it’s a done deal; it’s time for you to move on.”
I own a wealth management firm called Strategic Wealth Partners based out of Cleveland Ohio. Our focus is on working with entrepreneurs and taking care of their wealth management needs.
I am married and have three kids who are seven, almost five and almost three.
The majority of my clients are entrepreneurs and entrepreneurs tend to have very unique wealth management situations. Entrepreneurs need to focus on building and growing both their liquid investments but also their illiquid wealth, growing that is just as important, if not more. What we found is on average about 80% of entrepreneurs net worth is tied up in his or her illiquid business. And additionally most entrepreneurs are only going to sale that business one time and that is going to be the most significant financial event of their life. We really wanted to put together a book that looked at both sides of the wealth management equation.
The E-Myth by Michael Gerber
Buy Walk Away Wealthy by Mark Tepper on Amazon today
Visit SWPconnect.com to email, call, or learn more about Mark
Follow Mark Tepper on Twitter
Download the full transcript here
Listen on iTunes, Stitcher , and SoundCloud
Related books: Final Act of Ownership by Jerry Baltus | From Idea To Exit by Jeff Weber | Sell Your Business For An Outrageous Price by Kevin Short
Relevant advice and tips: 7 Important Things You Need To Know When Selling Your Business
What did you like and not like about this episode? Fill out this one minute survey here.
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]]>Latest Books For Entrepreneurs in July 2014 The Entrepreneurs Library presents the latest books for entrepreneurs in July 2014. These books are brand new to the market and the authorsRead More
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]]>Latest Books For Entrepreneurs in July 2014
The Entrepreneurs Library presents the latest books for entrepreneurs in July 2014. These books are brand new to the market and the authors are in line to share their insights with me. Stay tuned for the release of these great episodes coming soon.
Pitching and Closing by Alexander Taub and Ellen DaSilva
Pitching & Closing gives you concrete action steps for mastering the specific skill set today’s business-development professionals need to define their roles and meet revenue expectations. Written in practical terms by playmakers at Twitter and SocialRank, this A-to-Z guide walks you through forging relationships, pitching a company’s product, building a network, sourcing deals, making rejection positive, and staying cool while closing large deals. Firsthand accounts from business development executives across many industries, from tech to television to finance, bring to life such topics as:
“This book is a must-read for anyone in the business of transforming professional relationships into powerful strategic partnerships.” — Adam Bain, President of Global Revenue at Twitter
Learn more about Alex Taub | Buy Pitching and Closing on Amazon
Startup Mixology by Frank Gruber
Startup Mixology is first and foremost a book about turning your ideas into action. From the cofounder of media company Tech Cocktail, a veteran entrepreneur and investor who was named one of the most connected people in tech, this book covers the basic “ingredients” of winning entrepreneurship. No abstract theories here — it shows you how to tackle everything from idea generation to launch to marketing to funding and how to start getting things done.
Once you’ve taken that first step, the journey has only begun. Startup Mixology tells it like it is — and it’s not easy! You’ll learn about the harsh reality of starting up: what happens when you offend your customers, get no attention, or run out of money. These are the stories you don’t always hear in the media.
“Frank Gruber’s Startup Mixology is a clear and thoughtful distillation of what it takes to take an idea and turn it into a business. I encourage entrepreneurs of all backgrounds to read this book and apply its lessons.” —Steve Case, Chairman and CEO, Revolution, Cofounder, AOL, and Chairman, Case Foundation
Learn more about Frank Gruber | Buy Startup Mixology on Amazon
How to Succeed in 12 Months by Serena Star Leonard
How to Succeed in 12 Months: Creating a Life You Love is your ultimate guide to turning your dreams into reality. Author Serena Star-Leonard is living the dream herself, having practiced what she preaches. In the book, she shares the secrets behind figuring out the steps that will get you the life you’ve always wanted, and taking those steps in leaps and bounds. It’s not a get-rich-quick scheme, but a one-year plan to stepping out of your rut and into your most fulfilling life. Star-Leonard provides a roadmap to:
Learn more about Serena Star-Leonard | Buy How to Succeed in 12 Months on Amazon
Walk Away Wealthy by Mark Tepper
In Walk Away Wealthy, Mark Tepper–a leading authority on wealth management and financial planning for entrepreneurs–shows you how to build a strong exit plan, an absolute requirement if you hope to get the full value from a sale. Tepper’s twelve secrets debunk myths and deliver practical advice as he walks you through what most people don’t know (or refuse to believe) about the process of planning their exit. And although it’s best to start planning the exit as early as possible, the book also delivers advice for those who may have waited too long and feel lost in the face of a rapidly approaching sale.
Selling the business you worked so hard to build can be a confusing and intimidating proposition. Let Mark Tepper clear away the misconceptions, steer you clear of common mistakes, and help you walk away wealthy!
“Walk Away Wealthy is loaded with practical ideas you can use to maximize the value of your business – to yourself and to the person you sell it to.” – Brian Tracy, Author of Now, Build A Great Business
Learn more about Mark Tepper | Buy Walk Away Wealthy on Amazon
The Responsible Entrepreneur by Carol Sanford
The Responsible Entrepreneur offers a blueprint for this new kind of business leadership, describing the means by which any entrepreneur can pursue a higher order of work. In it, Carol Sanford, one of the most trusted names in responsible business development, brings her vast expertise in helping executives and corporations to the entrepreneur looking to launch and scale a venture. She maps this journey through four archetypes:
For entrepreneurs seeking to pursue world-changing results, or impact investors looking to align their capital with their values, The Responsible Entrepreneur provides the frameworks to build a business and to evaluate and direct investments to create the greatest benefit for all stakeholders.
“Carol Sanford has produced a profound but simple framework for understanding and unleashing entrepreneurial talent. Offering unique insight into four types of entrepreneurship and the domains in which they provide the most leverage, The Responsible Entrepreneur will feed the entrepreneurial spirit and catalyze it toward more meaningful impact in the world.” — Lara Lee, SVP, customer experience design, Lowe’s Home Improvement, and former VP, Harley-Davidson
Learn more about Carol Sanford | Buy The Responsible Entrepreneur on Amazon
What are you reading this month? Feel free to comment below or engage with me on Facebook and Twitter.
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