by theEmother | Apr 15, 2014 | build a Mother of a Business, business ideas & thinking, exit strategy, Finish Unfinished Business, how to sell a business, Sell Your Business, SELL your Mother of a Business, so you think you're in business, start with the end in mind, the business model
So, one of the key questions I ask when talking about exiting your business is:
“how reliant is your business on any one customer, supplier, employee or even on you?”
More times than not, the answer will usually suggest that there is on a reliance on at least one of these.
I’m sure there are many reasons and justifications why this is:
- maybe it’s because you’ve landed a very large client because they want all you produce, consuming all your business has available. You keep delivering and they keep broadening the list of products and services they want you to supply.
- may it’s because once you found the supplier that delivered what you wanted, you didn’t/haven’t ever bothered trying to find anyone else, leaving you to focus on other tasks.
- maybe it’s because you brought someone in to help you as your business grew, with them making some of the activities their own and knowing more than anyone else about them.
- maybe it’s because you’ve done an excellent job serving a small number of great customers and they ask you personally to handle more of their work.
From a saleability point of view, that’s not such a good thing for a number of reasons:
- Are you locked into pricing and timeframes that means your business cannot make an impact on increasing margins (whether you like it or not).
- Are leaving your business at the mercy (to some extent) of not having a backup supply arrangement.
- Are you allowing one to have a lot of power with one without having locked them in?
- Are you making good money serving the expanding needs of this small list of “great customers” so you keep falling deeper and deeper into the trap.
Pretty soon, your business’s offering is an inch deep and a mile wide and the only person in your business with the depth of industry experience to deliver all of the services is YOU. But you’re trapped because your expenses have crept up as your revenue has exploded – leaving you dependent on the sales you get from a small group of demanding customers.
With no more hours in the day, your business stalls and you run on a hamster wheel just trying to keep what you’ve got.
Is this sounding familiar?
The next post will assist in providing some of the answers…
by theEmother | Apr 14, 2014 | build a Mother of a Business, business ideas & thinking, inspiring women, MEinc, single parent l single mother
imperfection…
“How To Be An Imperfectionist”, an article worth reading…
“It’s worth it to get scratched in the face if you reach the treasure chest. You can’t reach your proverbial treasure chest without having a problem on the way there. The world has too many variables that can mess you up. You are imperfect, and will create your own problems too.
Imperfection isn’t glorious and I’m not glorifying it—it’s just the way forward. There isn’t another way, and when you refuse to believe it, you’ll be the person who turns away from opportunity, looking for an alternate trail that has no thorns.”
by theEmother | Apr 11, 2014 | build a Mother of a Business, business ideas & thinking, EXIT execution, exit strategy, Finish Unfinished Business, growth by acquisition, how to sell a business, Sell Your Business, SELL your Mother of a Business, Sellability Score, so you think you're in business, start with the end in mind, the business model
How Saleable is Your Business in 2014?
How Saleable do you want Your Business 2014?
What are you waiting for? GET YOUR SCORE…
As always, school holidays prove an interesting time for entrepreneurial mothers trying to keep their “other” child going strong i.e. their business…
The rhythm of the day goes to pot.
The designated time available to do stuff just disappears.
Tension builds.
Activities need to go on hold.
It is what it is!
Give yourself a break. Conversations can wait for a week or two.
And if it can’t, there is another opportunity around the corner if you have to let one pass, this time.
And by next holidays, you’ll be so much better organised…won’t you?
GOT A WEBSITE FOR SALE?
If you want to do sell a website or you’re looking to buy a website (excellent bolt-on possibilities), please email me at dhall@businessbrokers.com.au
If any of the following tickle your fancy, please email me at dhall@businessbrokers.com.au, letting me know which one it is…
FOR SALE…
BS30 Online Venue Business
Completed Sellability Score
4 interested parties, with an update of the IM being done and a reenergised campaign. Will see a bit of movement on this one in April.
BS49 Home Help…
Thoughts on price are being bandied around and logic is prevailing. Next week might see this move rather quickly.
BS53 Balloons! and all that goes with them…
Going to touch base with competitors now and see what can be generated.
Such corporate appeal, so untapped.
BS59 Niche Service Provider in Building Trade
via Sellability Score. Authority being drawn up with signatures booked for Monday.
BS60 Advertising and Events agency
(via Sellability Score)
Authority signed. Draft IM finalising. New website good to go. Almost ready to pull the trigger!
BS72 Niche Bookseller and Training Provider
Authority drawn up with signatures due next week.
Training provider
Assisting colleague by introducing the perfect buyer for his selling client. This should be a no-brainer, as long as the vendor is sensible, which is not always something we can guarantee!
It’s all happening….
Others I’m talking too.. are you interested in?
- a particular event
- sales and services
- magazine
- specialty bed linen
- facilities management
- speciality giftware
- technology reseller
- mortgage broker
- specialty children’s products x 2
If yes, let me know as these revealed themselves this week…
Exploring the Sale Option?
GET YOUR SCORE…
Onwards and Upwards!
by theEmother | Apr 10, 2014 | build a Mother of a Business, exit strategy, Finish Unfinished Business, how to sell a business, Sell Your Business, SELL your Mother of a Business, so you think you're in business, start with the end in mind, the business model
The most interest over the last weeks has been “When Is the Right Time to Sell?”
The answer to that question moves amongst how-long-is-a-piece-of-string and who really knows. Nonetheless, there are a few prime clues that I have explored with you over the past number of posts…
In my experience, the price discussion causes more angst than any of the preceding steps.
What is being addressed here is:
- not what you’ve invested
- not what hours you’ve worked
- not what you think it’s worth
It is instead about the realities, at this point in time, in regard to the calibre of the asset you are taking to market.
And this is where the disconnect invariably lies.
When appraising a business, we always come up with a most “Likely Price Range”, similar to real estate. This range is based on the quality of the previous steps and how well you can prove them.
Certainly part of our analysis is we ask what price you want.
We then ask how was this price arrived at.
And what is it based on.
This will usually give us clues as to how realistic your price is and how likely we are to be able to sell it at the price you want.
In most cases, advice has been received from parties not aware of current market forces and pricing, which therefore creates a more nonsensical starting point. It then takes time to get real. Resulting in the shop around in the hope of getting a better price.
A word of caution here… be very sure about not only whom you’re getting your advice from, but also marketers passing as brokers. When they say they will put your business on the market for what you want and you have to pay a LOT of money for the privilege upfront – STOP! Come and see me first. There are many a disenchanted business owner around, who has paid thousands and thousands of dollars only to never get a lead and to never hear from the marketer/broker again. Even when they call the office number provided!
Seriously, if you want to get the kind of price you envisage, start doing the things noted in the Steps through to this one.
by theEmother | Apr 9, 2014 | business ideas & thinking, exit strategy, Finish Unfinished Business, how to sell a business, Sell Your Business, SELL your Mother of a Business, Sellability Score, so you think you're in business, start with the end in mind, the business model
The most interest over the last weeks has been “When Is the Right Time to Sell?”
The answer to that question moves amongst how-long-is-a-piece-of-string and who really knows. Nonetheless, there are a few prime clues that I will explore with you over the next number of posts…
Through using the Hurst Partners sellabilityscore.com.au and getting into discussions with business owners, many of them believe the act of selling their business is similar to passing the baton in a 400-metre relay: once you’re finished running, you get to relax.
In reality, buyers may insist that you stay on for a transition period – anywhere from six months to five years, depending on the size of the transaction – during which time you continue to work in your business to help the buyer capitalise on the investment they’re making.
THE Question
At some point in the process of selling your business, a prospective buyer will ask you – usually quite casually – “Why do you want to sell your business?”
Buyers ask THE question to evaluate how likely and willing you are to stay on or if you already have one foot out the door.
Obviously you don’t want to lie, but there is a right and wrong way to answer THE question. Answers like “I want to slow down a bit” or “I want to travel” or “we’ve got a baby on the way and I want to spend more time at home” communicate to a potential buyer that you plan on winding down when they take over. However, what they may want to hear is your intention to help them realise the potential locked inside your business.
Here are some suggested responses based on your age.
If you’re under 40, you clearly aren’t ready to “retire” so you need to communicate that you see an upside in merging your business with theirs:
“In order for us to get to the next level, we need to find a partner with more sales people, distribution, geographic reach, capital or whatever the partner brings to the table.”
If you’re between 40-55 years old, most people will understand the need to sure up your personal balance sheet:
“I’ve reached a time in my life where I want to create some liquidity from the value I’ve created so far and at the same time I want to find a partner who can help us get to the next level.”
If you’re over 55, you can start to talk about retirement, but you want to make sure you communicate that you still have lots of energy and passion for your business.
“I’m at a stage where I need to start thinking about retirement. It’s a long way off yet, but I want to be proactive.”
Rehearse your answer to THE question so it becomes a natural response when you are inevitably asked THE question.
