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 Sell Your Business for an Outrageous Price according to Kevin Short: Introduction In this episode Kevin Short shares his book, Sell YourRead More
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]]>In this episode Kevin Short shares his book, Sell Your Business For An Outrageous Price. In his book, Short unveils over 5 years of research in selling businesses combined with over 25 years of experience in mergers and acquisitions. Unlike other books that teach you how to sell your business, this book takes you one step further to prepare business owners like you in getting more than twice what your business is worth. Sell Your Business For An Outrageous Price is the perfect book for business owners looking to sell their organization that are making between 10 and 100 million dollars in revenue.
Nobody to our knowledge has written a book about how to get an outrageous price for your business. There are a lot of books out there about how to sell your company but nothing out there with the recipe of how to prepare yourself to see if you can get more than twice the average.
I would recommend reading it from start to finish because it builds as you read along.
Making sure that the seller always has their antenna up when looking for the right buyer.
There are four pillars to this whole concept in the book. In the first pillar Kevin starts with Michael Porters theory of competitive advantage and competitive theory. You must figure out if there is something that you’re doing that would be attractive to a large buyer.
The second pillar talks about having a very well qualified large buyer. You will not be able to get an outrageous price from a private equity group or a financial buyer. At the end of the day paying 10 or 20 million is not a big deal to a multi-billion dollar corporation. You must do your homework and research as to properly identify these qualified buyers. It is also important to develop a good strategy that will get the attention of these buyers. Ideally you want to entice the buyer to approach you about buying your company.
The third pillar is the seller. The seller must be prepared to in a way play poker with the professional buyer. When messing with this amount of money, it’s not going to be easy and the seller must be prepared for the competitive fight.
The fourth pillar is about having the right professional team to make this happen. If you don’t have the right investment banker and attorney you will have a hard time making this happen. Make sure that your attorney trusts the investment banker and is ok with going along with this. If everyone is not on the same page the buyer will realize that.
“Don’t get sucked in by the buyers’ speech.” – Kevin Short
I am the Managing Partner and CEO of Clayton Capital Partners. I have been in investment banking, specializing in mergers and acquisitions, for 25 years. I’m married and a father of four girls who keep me busy all of the time.
I’ve done hundreds of deals in my M&A career and about 10 years ago I began to see this phenomenon of taking a company to market, expecting to get a 5 multiple of earnings and someone bids a 10 multiple. This made me wonder why one computer would be able to rationalize paying twice as much than the average multiple. About five years ago I started researching this information and started writing this book.
The E-Myth by Michael Gerber
Competitive Advantage by Michael Porter
Negotiauctions by Guhan Subramanian
Buy Sell Your Business for an Outrageous Price by Kevin Short on Amazon today
Visit ThinkOutrageous.com to learn more about Kevin and his book
Follow Kevin Short on Twitter
For questions contact Kevin by phone at 314-725-9939
Download the full transcript here
Listen on iTunes, Stitcher , and SoundCloud
Related books: Walk Away Wealthy by Mark Tepper | The Final Act of Ownership by Jerry Baltus | Show Me The Money by Alan Barrell
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 September 2014 The Entrepreneurs Library presents the latest books for entrepreneurs in September 2014. These books are brand new to the market and the authorsRead More
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]]>Latest Books for Entrepreneurs in September 2014
The Entrepreneurs Library presents the latest books for entrepreneurs in September 2014. These books are brand new to the market and the authors are in line to share their insights with me. Stay tuned this month for the release of the interviews with these great books and the authors.
The Seven Levels of Communication by Michael J Maher
The Seven Levels of Communication tells the entertaining and educational story of Rick Masters, who is suffering from a down economy when he meets a mortgage professional who has built a successful business without advertising or personal promotion. Skeptical, he agrees to accompany her to a conference to learn more about her mysterious methods.
Rick soon learns that the rewards for implementing these strategies are far greater than he had ever imagined. In seeking success, he finds significance. This heartwarming tale of Rick’s trials and triumphs describes the exact strategies that helped him evolve from the Ego Era to the Generosity Generation.
This book is about so much more than referrals. This is about building a business that not only feeds your family, but also feeds your soul.
Learn more about Michael J Maher | Buy The Seven Levels of Communication on Amazon
Invent, Reinvent, Thrive by Lloyd Shefsky
Invent Reinvent Thrive offers all the answers you need to get your business where you want it to be. You’ll learn exactly where new and multi-generational business owners fall short and miss incredible opportunities, why they fail to take the plunge or innovate–and how you can rework, revitalize, and reinvent your business not just to avoid the most common perils but to lead your business to the apex of your industry.
In Invent Reinvent Thrive Kellogg School of Management Professor Lloyd Shefsky provides the inspiration and insight any entrepreneur or family business needs for long-term success–and he backs it all up with proven models of what works and what doesn’t.
Shefsky reveals the common thread of all business success stories: reinvention. He explains not just how to reinvent concepts and ideas from the start, but ways to continuously innovate and reinvent your business to meet today’s constantly changing marketplace conditions. In addition to his own expert insight, Shefsky provides firsthand advice through case studies derived from dozens of original interviews with entrepreneurs and family business giants, consisting of the leaders of some of today’s most successful companies, including:
“If you think business books are boring, this is your chance to prove yourself wrong. Storytelling is an art, and Shefsky brings that art to business. Invent Reinvent Thrive is a treasure trove of valuable lessons.” – Stan Kasten, President and CEO, Los Angeles Dodgers
Learn more about Lloyd Shefsky | Buy Invent, Reinvent, Thrive on Amazon
Overfished Ocean Strategy by Nadya Zhexembayeva
Overfished Ocean Strategy offers five essential principles for innovating in this new reality. Zhexembayeva shows how businesses can find new opportunities in what were once considered useless by-products, discover resource-conserving efficiencies up and down their value chain, transfer their expertise from physical products to services, and develop ways to rapidly try out and refine these new business models.
She fills the book with examples of companies that are already successfully navigating the overfished ocean, from established corporations such as BMW, Microsoft, and Puma to newcomers such as Lush, FLOOW2, and Sourcemap.
The linear, throwaway economy of today—in which we extract resources at one end, create products, and throw them away at the other—is rapidly coming to an end. In every industry, creative minds are learning how to make money by taking this line and turning it into a circle. Nadya Zhexembayeva shows how you can join them and avoid being left high and dry.
Learn more about Nadya Zhexembayeva | Buy Overfished Ocean Strategy on Amazon
Sell Your Business for an Outrageous Price by Kevin M Short
In Sell Your Business for an Outrageous Price, investment banker Kevin M. Short — who for over twenty years has advised parties on both sides of the closing table — presents a structured playbook for sellers to win big. You’ll find out why some businesses sell for “outrageous” amounts — at least twice the EBITDA (earnings before interest, taxes, depreciation, and amortization) multiple of an average company in their industry — as well as how to minimize your risk going to market.
The book introduces you to the author’s Proactive Sale Strategy, a rigorous process for positioning your company to sell to a well-financed buyer at the best possible price. You’ll find out how to prepare yourself and your company for sale, understand your asset and how it benefits prospective buyers, and identify and remediate any issues that could prevent a sale or drive down sale price.
The book then helps you go to market. It guides you step-by-step through the Outrageous Price Process, designed to:
Learn more about Kevin Short | Buy Sell Your Business for an Outrageous Price on Amazon
Hello, My Name Is Awesome by Alexandra Watkins
Every year, 6 million companies and more than 100,000 products are launched. They all need an awesome name, but many (such as Xobni, Svbtle, and Doostang) look like the results of a drunken Scrabble game.
In this entertaining and engaging book, ace naming consultant Alexandra Watkins explains how anyone—even non-creative types—can create memorable and buzz-worthy brand names. No degree in linguistics required. The heart of the book is Watkins’s proven SMILE and SCRATCH Test—two acronyms for what makes or breaks a name.
She also provides up-to-date advice, like how to make sure that Siri spells your name correctly and how to nab an available domain name. And you’ll see dozens of examples—the good, the bad, and the “so bad she gave them an award.” Alexandra Watkins is not afraid to name names.
Naming a business or product has always been challenging—and sometimes costly— for entrepreneurs and inventors, but it’s one of the most important decisions they have to make. Alexandra Watkins presents a foolproof model that anyone can use to create and evaluate brand names like a pro.
“Zappos.com originally started out as ShoeSite.com, but that limited our potential future growth. A company’s name can be vital to its success. Reading the tips in this book can help anyone avoid the pitfalls.” —Tony Hsieh, New York Times bestselling author of Delivering Happiness and CEO, Zappos.com, Inc.
Learn more about Alexandra Watkins | Buy Hello, My Name Is Awesome on Amazon
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