In this article I want to tell you about some free resources to help you plan a profitable exit from your business. If after reading this article you want to learn more, just shoot me an email and I’ll be happy to answer any questions or send the resources to you (via email) as soon as I can.
What you’ll learn from the free business exit pack:
By way of giving some background, I’ve been reading these kinds of books (on and off) for about 18 months now, and the two I’ll shed some light on below are by far the best… especially if, 1) you’re thinking about selling your business in the next 3-5 years, 2) you really need a push in the right direction, and 3) you want to earn some good dollars (i.e. demonstrate great value to a buyer, who in turn rewards you with a great sale price).
So if that all sounds like you, let’s get started!
Main points the resources cover:
- Why a business that depends on you is worthless
- How predictable, multiple revenue streams add value to your business
- The mindset you’ll need to sell your business
- Tactics & strategies for selling your business
NB: I’ll give a foundation to some of these points below.
Most people looking to sell their business think it is intrinsically worth hundreds of thousands and even millions without considering what a buyer is actually looking for. They think this because of a common subconscious thought… and it’s this:
A business buyer is looking for a new job with a modest wage… but for 10x the effort of working for someone else.
Of course this thought is a misconception. No one in their right mind would take on the risk of running a business with the promise of little or no reward. So there’s got to be something more a business buyer is looking for; something that will make them take interest and part with hard earned cash to get… And for that matter, there has got to be a way that we can identify what a business buyer even looks like because I sure as hell can’t remember meeting someone with that kind of cash just walking along the street.
So let me answer these ponderings for you…
Business buyers normally fall into one of two classes, ‘financial’ or ‘strategic.’ A financial buyer is someone who generates a return on their investment by continuing the business and/or by generating additional gains by improving or enhancing the current business. Typically this type of buyer is looking for business with solid financials and a good management team.
On the other hand, a strategic buyer leverages the acquisition to create significant gains in their own business in combination with the new acquisition. Now because the strategic buyer can leverage your business into their business, thereby creating a bigger upside opportunity, they will often pay more for your business than a purely financial buyer.
Whoaa, there! Yes, I just said… if you want to make the most amount of money on the sale of your business, you’ll be looking for a strategic buyer (There’s more info on this in the free resources I’ll be giving away). But of course, not every business fits the bill for this type of buyer. And that’s ok. You can still earn a tidy sum on your business with a financial buyer, and later on this article I’ll give you a few tips on how that’s done.
Who will buy your business?
Now that you know the two types of business buyer, you’ll need to take a good look at your business and ask yourself ‘which type would seriously be interested in buying my business?’ To help you answer this question, I’ve put together a few dot points below on the kind of things you’ll need to be on the lookout for:
You will be looking for a financial buyer for your business if:
- Your business/product has low strategic value
- It has a low competitive advantage
- There are many similar businesses to yours
- Buyer will buy to consolidate or run as it is
- If business/product offers little in synergy to buyer
It makes sense to be looking for a strategic buyer if:
- Your business/product has high strategic value
- It has considerable competitive advantage
- It is unique, hard to copy or extensive intellectual capital or IP
- Your underlying assets of competencies can be leveraged by a larger corporation
Strategies to make your business more attractive
By now you will have a clear idea where you are and which type of buyer you should be targeting. Now let me quickly outline how you can improve the sale price of your business for each of these types of buyer.
For a financial buyer, it’s all about improving your EBIT multiple by reducing risk.
- “Webify” your business, by getting online with marketing and business processes
- Acquisitions, who can you buy to build the business to make it more desirable
- Increase recurring income, how can you create income perpetuity
- Decrease volatility in your business buyers love certainty
- Reduce potential liabilities
- Improve internal operations efficiency and effectiveness
- Improve governance of the business, great leaders grow great leaders. Manage your business through thorough outcomes and planning
- Put in place a succession plan
- Improve customer loyalty
- Focus on cross selling and account penetration
- Increase the use of longer term contracts
For strategic buyers, it’s about identifying your strategic uniqueness and by reducing risk.
- Decrease the buyers risk as with the financial buyer
- Good governance, efficient operations, eliminate potential litigation, develop a management succession plan
- Increase exploitation rate
- Improve scalability and replication of your unique product/process
- Develop a roll out capability
- Reduce integration time
- Standard agreements with key suppliers/clients
- Retain key employees
- Prepare the employees for a sale
These are just some of the ways you can increase the value of your business for each buyer. And as a professionally accredited business coach, I recommend clients do the same if they want to maximise their return.
How to Claim your free business exit pack
A blog article is all too brief to be able to address the business of selling your business. To further help you in this process I have put aside two awesome digital books for business owners who SERIOUSLY want their business to scream ‘value’ to a buyer (and hopefully help them get paid for that value too 🙂
To claim the free resources and start planning your exit strategy, click the link below
Send me the business exit pack
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“But what should I do if self-education just isn’t an option”
If reading resources and tackling an exit strategy on your own just doesn’t appeal (or isn’t viable) – seek help. And here’s why: To successfully plan and execute an exit strategy in your business, you will need to be committed to implementing the tactics outlined in the books I’m giving away. If you don’t have the time to read this book, or are honest enough to admit you’ll get distracted (which is the case with most of us business owners) – seek help.
Seeking a qualified consulting/coaching service
Planning your exit strategy is actually a very specialised task. Not any consultant/coach can help you. But I can confidently suggest my coaching business because we done it before… heck, I’ve done it before! So here’s a little about my coaching business, Business Growth Leaders (BGL):
Business Growth Leaders
We work with business owners like you to maximise the value of your business asset. Our organisation works with you to reduce business risk, thereby making your business more valuable to prospective purchasers. Ideally we work with you and your team using a business coaching format designed to achieve a more profitable, stable business that gives you options for your future as well as the businesses.
Clients have found the coaching process to work well in that it allows for the longer term development of the business. For many business owners we have worked with, they like the results of building a profitable business while working less. Placing them in a strong position to sell the business.
Disclaimer: We are not business brokers, real estate agents or seeking a listing of any type. We work with business owners to maximise the value of their business asset.
Free call 61 3 5338 1234. Meet with a coach to discuss your business strategy. No risk. No cost.
Pssst! Don’t forget to download today’s resources.
Send me the business exit pack
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