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.
by theEmother | Apr 8, 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 will explore with you over the next number of posts…
In sale conversations, there is much talk about the “potential”.
“A new owner can do this, a new owner can do that, which will result is a windfall etc etc”, business owners say.
Question #1 from a buyer:
“If there is such opportunity, why hasn’t it been done already?”
Question #2 from a buyer:
“Why should I pay for the privilege of doing something that has yet to be done? Ie there’s no proof that it will in fact work…
The much-learned colleague of mine always says:
“What a buyer buys is profit, the reason they buy it is the potential.”
Not only do you need to sell your business as being robust from a “scorecard” point of view, you also need to show that there is still some life in the old dog.
This is demonstrated by talking about:
- What you would have done, but haven’t? And why?
- What you could have done? But haven’t? And why?
- What are the trends in your industry? And what does that mean for your business?
If you want to be paid for potential, then start installing some of the initiatives you are prepared to highlight and show a measurable increase in the metrics and the financials. That way, it’s not just all-talk!
by theEmother | Apr 4, 2014 | build a Mother of a Business, BUY a Business, Buy a Mother of a Business, EXIT execution, exit strategy, growth by acquisition, 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…
My oh my haven’t the business sales inquiries picked up!
Just this week, two more calls about new ones and two more sale authorities to be drawn up for ones I’ve been chatting with for weeks. Not a bad looking metric for this weeks work!
Now to find the all important buyers…
If you’re looking for a career change or retrenchment is looming or lifestyle issues are coming to the fore, then seriously, now is the time to consider buying a business that is already making money… buy straight into revenue, a great way to start (as opposed to waiting for the 2 year lag time to make money with a start-up).
If you’re really not sure but think it’s something you should be pursuing, call me.
Happy to talk you through all alternatives. If there’s enough of you, let’s run a workshop! I’m good to go when you are…
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…
A new party has appeared as well and is asking all the right questions. This sale still has some play left to work out.
BS53 Balloons! and all that goes with them…
Such corporate appeal, so untapped. It’s waiting for the savvy operator that can see past the retail component and tap into it’s possibility as a warehouse servicing the larger players. Bit stuck on this one now!
BS57 Online Business
Signed good to go. It’s making money! Have received signed authority’s and in the process of developing the IM now. The owner has been out of the country and is just getting back into the swing of things. Stay tuned.
BS59 Niche Service Provider in Building Trade
via Sellability Score. Authority being drawn up with signatures due next week.
BS60 Advertising and Events agency
(via Sellability Score)
Authority signed. First fact finding meeting conducted. All parties getting more and more clear about the objective of finding the buyer. New website being launched. Draft IM is in progress.
BS72 Niche Bookseller and Training Provider
Authority being drawn up with signatures due next week.
It’s all happening….
Others I’m talking too.. are you interested in?
- a particular event
- specialty educational toys
- 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 3, 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 will explore with you over the next number of posts…
Ah yes, the all-important “scorecard”!
Whilst the metrics and the financials definitely form the basis of the sale, they are not usually the only reason that the sale goes ahead. Yes, they are used as first pass, but they are not always the only reason that a potential Buyer says yes or no.
As this information is asked for at the outset, best get it ready as soon as possible. Indicative of the type of information required is:
- Background to the business
- Financials (accountant-prepared profit and loss and balance sheet) for last 3 years
- Supply/Agency Agreements
- List of Top 10 Sales/Customers (for last 3 years; no names)
- List of Employees (incl. owners) – Role, salaries, history
- List of Licensees/Franchisees/Stores
- List of creditors and debtors for 30, 60 and 90 days (total)
- Online Statistics (Google Analytics)
- Lease/Property details
- Outline Owner’s involvement
- Any information that will likely impact on the future performance of the business
What is effectively being asked for here is proof of the numbers. If you’re unable to produce such reports, then think about what you can use to prove what is being claimed. Whilst a spreadsheet or two can suffice, there has to also be bank statements or PayPal records or clickbank numbers that can substantiate the spreadsheet.
To not do this opens the question of “what is for sale exactly?”
Until you can tell the metrics and financials story, then the business may not be ready to take to market after all…
by theEmother | Apr 2, 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 will explore with you over the next number of posts…
When talking Operations | Delivery | Fulfilment, this is the stuff that a lot of your “Procedures Manual” covers or at least should cover. Whether it be an actual folder or a series of checklists or a series of videos sitting in the business’s own youtube channel, it pretty much covers how, once the business has converted the sale into having to deliver the item/service, what has to happen is mapped out.
In fact, thorough Procedures Manuals covers the whole business, from whoa to go, such as:
1. Overview | Background
2. Services | Products
3. Marketing
4. Databases | Client Relationship Management
5. Sales
6. Policy and Procedures
7. Reporting | Metrics
8. Accounting
9. Business Plan
Initially, the Buyer will not expect to see all that sits behind this list in its entirety upfront. However you do need to have it ready to handover at time of sale. Therefore if you’ve not even commenced this process and you are wanting to put your business on the market, then suggest you start now…
