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What Do You Need to Do to Get Your Business Ready to Sell?

 

In his recent article in Smart Business entitled, “How to get your business, and yourself, ready for sale,” author Adam Burroughs explores the key points of getting your business ready to sell.  Burroughs points to the truism that, at some point, almost every business owner must sell his or her business.  For this reason, it is critical to think about what it takes to get your business ready to sell.  Simply stated, it is best to explore and plan for selling your business long before you actually need to place your business on the market.  Let’s explore some key points for selling your business.

Broadening Your Options

Burroughs interviews Scott McRill at Clark Schaefer Hackett.  McRill notes, “The sooner you think about your exit, the more options you’ll have for yourself and the business when the time comes.”  A savvy business owner will always want to give himself or herself as many options as possible. McRill wisely points out that early planning is key, and a failure to engage in early planning could lead to a lower selling price.  If you want to get the best price for your business, then planning for the eventual sale as far in advance as possible is a good move.

Planning in Advance

According to Burroughs, business owners should start planning to sell their business at least 2 to 3 years before they actually plan to sell.  Part of the reason for this is so that business owners will have enough time to make operational improvements designed to maximize the business’s overall value. 

A Financial Review

At the top of every business owners “preparing to sell” list is to have a third-party review the business’s financial situation.  This is excellent advice for, as frequent readers of this blog know, any serious prospective buyer will look long and hard at your business’s financials.  Getting your business’s financial house in order means that you should turn to an accounting firm for help.  You’ll want to review financial statements for at least the previous 2 to 3 years.

Burroughs points out that when it comes to selling a business, there are many variables that business owners often overlook.  At the top of the list is the management team. 

Your Management Team

Prospective buyers can get very nervous about the stability of the management team once ownership has changed hands.  Often, the new buyer may only sign on the dotted line if the owner agrees to stay on after the sale during a transition period.  Having a competent and proven team in place, one that is dedicated to staying with the company will help you get your business ready to sell.

There are a lot of variables involved in preparing to sell a business.  The sooner that you get experts involved in the process, the better off you will be.  A business broker can serve as a guide – one that can point you in the right direction.  Find a broker with an abundance of experience, and you’ll have an invaluable ally who can help you navigate the process.  It can take a lot of time and effort to sell a business.  Working with a business broker can keep you from reinventing the wheel at every step of the process.

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Whether you are looking to exit your privately held business, represent an acquisition-minded corporation, value your business, or are personally interested in owning or building value in your own company or franchise, Colonial Business Brokerage offers the professional services that successfully bring buyers and sellers together.

How Do You Create Marketing That Really Works?

How Do You Create Marketing That Really Works?

You need revenue, and you need it fast. You spend all night writing an ad that beautifully describes your product or service. You include the fact that you’re convenient, have the lowest prices, the highest quality and have been in business since 1431 B.C.

You pay a small fortune to have the ad placed in your local newspaper, radio and TV. And what happens? The phone never rings… not even once. Why?

What you need to know…

Every business owner has experienced the frustration of spending hard earned marketing dollars and failing to generate any interest or response. That’s because you focused on the wrong things in your ad.

Don’t take this the wrong way, but your prospects don’t care about you in the least. They don’t care what the name of your business is or how many years you’ve been at your current location. They don’t care what products or services you offer, or how conveniently located you are. They only care about one thing…

What’s In It For Me! That’s it. Remember those 5 little words, and learn how to use them in your marketing. If you do, you will forever separate your business from your competition, and even eliminate them from the minds of your prospects.

Why you need to know this…

Most business owners today have no clue how to create a compelling ad that attracts prospects to their business. They create ads that are full of platitudes such as convenient location, low price, and the all too familiar “menu” of products and services they offer.

If that describes your current marketing, then you will never build the business you want. You will never attract your ideal clients that will make you the most money. In fact, you will be very lucky just to survive.

The cost to you if you fail to act…

Do you know how to create compelling marketing that actually makes money?

Do you know how to attract clients when you need them?

Did you know there is a “marketing equation” that when followed, takes the guesswork out of your marketing completely?

Do you consistently “invest” in marketing… and feel confident you will always see a positive “return on investment?”

If you answer no to any of these, you’re leaving money on the table. You’re losing market share to your competition every single day, and you’re working harder and longer than you should be? How much longer can you afford to continue to invest in marketing that doesn’t work? How can you survive if you DON’T invest in marketing?

We know and understand marketing. We recently wrote one single email for a doctor that generated more than $20,000 in just 10 days. We can teach you the exact same thing.

Learn these critical skills and you will position your business light years ahead of your competition, To take a Test Drive on our system visit http://increaserevenueandprofits.com/guidedtour

To your success,

Tom Flowers

P.S. Please remember that at any time you feel ready and qualified to move forward and acquire the professional help that can enable you to build the business of your dreams, just click here and check out our E-Learning Marketing System™. It’s helping small business owners just like you get the answers and the help they need to build the business they have always wanted.

We created the E-Learning Marketing System™ with the perfect combination of online resources, tools and support to get you out of any financial distress you’re presently experiencing… help you get laser-focused on your highest income-producing activities… and help you develop and then apply the fundamentals that build multimillion dollar businesses. click here to see for yourself.

Selling Your Business, Taxes & Tax Structures

It is never too early to start thinking about what tax structure you should use when it comes time to sell your business.  A simple, but undeniable, rule of life is that taxes matter and they can’t be overlooked.  Author Tim Fries at The Tokenist has written an excellent and quite detailed overview article on what tax issues business owners need to consider before selling their business.  His article, “What Tax Structure Should You Use When Selling Your Business?” explores many aspects of a topic that many business owners fail to invest enough time in, namely taxes.

As Fries astutely points out, the taxes involving the sale of a business can be complex and are usually unknown to those selling a business for the first time.  Your tax structure can influence how much money you receive at the closing of your deal, so it’s a very good idea to pay attention to all aspects of taxation and your business.  It is key to remember, “When you are selling your business – as far as taxes are concerned – you’re ultimately selling a collection of assets.”

Fries points out that taxes and selling a business are no small matter.  It is possible that up to 50% of the sale of a business can go to taxes. Don’t worry if you are learning this for the first time and feel more than a little shocked.  However, this fact does a good job of illuminating the importance of setting up the right tax structure for your business.  While you might not be able to get around taxes altogether by investing the time and effort to set up the right structure for your business, you can keep from paying more taxes than is necessary.

There are a lot of variables that go into how much you will ultimately have to pay in taxes.  Let’s take a look at some of the key questions Fries raises in his article.

  1. Is your sale considered ordinary income or is the sale considered capital gains?
  2. Are you operating as an LLC, a sole proprietorship, a partnership or are you operating as a corporation?
  3. What portion of the sale price goes to tangible assets as compared to intangible assets?
  4. Is there a difference between your tax basis and the proceeds from your sale?
  5. What does your depreciation look like?
  6. Don’t expect that the buyer will instantly agree to your terms.
  7. Realize that the decisions you make during negotiations with a buyer will have tax implications.
  8. Is an installment sale right for your business?
  9. With C corporations, sellers usually want a stock sale whereas buyers generally prefer an asset sale.
  10. Cashing out immediately, where you receive all your funds at once, will increase your tax liability.
  11. Have you considered switching to an S corporation?
  12. Have you consulted with experts to decide which tax structure is best for you?
  13. Have you consulted with a business broker?

Selling a business is obviously complicated.  Finding a seasoned business broker can help you demystify many aspects of buying and selling a business.  Ultimately, having the best deal structure and finding the right buyer can be a labyrinthian process.  Having the very best professional help in your corner is simply a must.

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Whether you are looking to exit your privately held business, represent an acquisition-minded corporation, value your business, or are personally interested in owning or building value in your own company or franchise, Colonial Business Brokerage offers the professional services that successfully bring buyers and sellers together.

Copyright: Business Brokerage Press, Inc.

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How To Find A $100 Million Idea

Dr. David Bach is a Harvard-trained scientist, physician, and serial entrepreneur.

Bach has founded and built three healthcare companies, each of which grew to over $100 million in value. His most recent exit was from Leprechaun LLC which became the fastest-growing company in America before it was acquired delivering a 90X return for his shareholders.

What is Bach’s secret for consistently picking winners? It all comes down to a process he goes through before he starts a company which he’ll describe in this week’s episode of Built to Sell Radio.

Listen now

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If you’re interested in improving the value of your business, take our questionnaire or contact Colonial Business Brokerage today at 443-982-7332.

Must You Fire Your Managers to Grow the Business?

Must You Fire Your Managers to Grow the Business?

Building business value is a common goal among business owners. Many successful small business owners find that after years of growth, the company can begin to plateau. It can be frustrating if you and your longtime managers realize that all of the things that grew the business in the past aren’t doing the trick anymore. It’s especially frustrating if you realize that the cause of this stagnation might be your longtime managers themselves.

Today, we’ll look at a touchy subject: what to do about management teams that no longer produce the business growth necessary to support your ideal future.

Overcoming the plateau

Consider a fictional company, Big Brain Streaming Services. Over five years, one of the original co-founders and then-CEO, Riley Ruckus, had grown Big Brain significantly. Then, one of Riley’s biggest investors, Huey del Rocha, decided that he wanted to take over as CEO. Huey didn’t think Riley had the skills to continue growing the business. Huey demoted Riley from CEO to President. Over the next few years, Big Brain exploded under the guidance of its new CEO.

In this example, firing the CEO achieved the aim of growing the business. But if you’re like many small business owners, this can be a problematic solution, especially if you feel a sense of loyalty to your managers. The idea of demoting or firing people who helped you build the business might be unpalatable.

However, to effectively overcome plateauing business value, you’ll likely need to install a next-level management team. Next-level management teams are strong drivers of business value because they typically know how to build business value beyond what current management can do. As the Big Brain example showed, sometimes, the ideas that grew the company at first aren’t good enough to grow the company going forward. Sometimes, change is necessary, and that change comes in the form of an injection of new, more fitting talent.

Fortunately, you don’t necessarily need to fire current managers. Loyalty and change are not mutually exclusive. In addition to replacing current managers, you can take two other tracks to install next-level management and still abide by your personal code of loyalty.

Reassign current managers

In the Big Brain example, the new CEO replaced the old CEO because it was necessary for the business’ success. This is an important thing for you to understand. It is completely normal for growing businesses to replace all or part of an existing management team.

One way to split the difference between doing nothing and replacing everyone is to reassign current managers to more fitting roles. For example, your business may have an operations director who does incredible work when managing five people. But for your business to grow to the point where you can reach financial independence post-exit, it may need an operations director who can manage many more than five people. Rather than hiring an outside director and firing the current director, you can hire the outside director and move the current director into a role where their skill set is still valuable.

The consequence of taking this tack is that you’ve taken a step toward growing the business while giving your current manager the best chance to succeed, rather than throwing them in the deep end.

Retrain current managers

Current managers of successful businesses have obvious talent. Thus, it’s possible to retrain current managers to go above and beyond what they currently do. You can potentially train promising managers to continue building business value beyond what they’re producing today.

However, this strategy requires commitment and forethought. It may require outside counsel. You cannot simply expect current managers to “do more.” You must instead define what you expect from managers, make those expectations achievable, and reward managers for achieving and surpassing expectations. First, giving top managers access to training, education, coaching, and the like builds their skill sets. Then, setting ambitious yet reasonable goals can motivate your current managers to use their new skills to grow the business as you need it to grow.

Conclusion

To continue growing your business, you may need to determine whether your current management team is the right group to grow the company appropriately. In terms of planning for your business’ future, “appropriate growth” means the amount of growth necessary to provide you with financial security when you eventually leave it.

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If you’re interested in improving the value of your business, take our questionnaire or contact Colonial Business Brokerage today at 443-982-7332.

Do you know how much each prospect is worth to your business?

Do You Know How Much Each Client Is Worth To Your Business?

The lifetime value of each client is defined as the total gross profit that you accumulate from a customer over their lifetime of doing business with you less the acquisition cost and marketing expenses over their lifetime.

When you know this value, you also know exactly how much money you can spend to acquire a client through marketing.

Do you realize the power that gives you as a small business owner? Did you know that by knowing your customer lifetime value, you can literally dominate your market and eliminate your competition in the minds of your clients?

What you need to know…

Most business owners know intuitively that it’s much easier to make an additional sale to a current client than it is to make that first sale that acquires that client. Unfortunately, they don’t do enough to figure out how they can sell more to their existing client base.

Why you need to know this…

It’s important to understand that a client who has had an exceptional experience with your product or service is naturally going to look to you to help them fulfill their other needs with additional products. They now trust you, and are happy with the relationship they have with you. You should take advantage of their trust and make an offer for another product/service immediately after their initial purchase, and schedule frequent campaigns to offer more to your client base.

The cost to you if you fail to act…

When your customers recognize that you provide them with value, they will continue to purchase from you. But, you can’t assume they will just call you up and ask you to sell them something. You have to make the effort to ask for their order.

So are you doing that?

Do you know how to do that?

Are you aware that all of this can be put on auto-pilot, and requires no further action on your part whatsoever?

This is easy to do and in most cases… costs you nothing except a little time to set it up.

How can you learn to develop these critical skills?

We’ll show you how. We’ll help you to develop these skills quickly and easily through our E-Learning Marketing System™ Coaching Program. In fact, we want to share our expertise with you and demonstrate our expertise.

For example, how would you like to fire the clients you hate to work with… and instead, build a successful business by hand selecting the type of clients you want to work with? With the help of our E-Learning Marketing System, we can help you quickly grasp this critical business fundamental and immediately apply its power to help you build your business to record heights. Listen to this exclusive webinar and we’ll unlock our vault to this proprietary members-only information.

To take a Test Drive on our system visit http://increaserevenueandprofits.com/guidedtour

To your success,

Tom Flowers

P.S. Please remember that at any time you feel ready and qualified to move forward and acquire the professional help that can enable you to build the business of your dreams, just click here and check out our E-Learning Marketing System™. It’s helping small business owners just like you get the answers and the help they need to build the business they have always wanted.

We created the E-Learning Marketing System™ with the perfect combination of online resources, tools and support to get you out of any financial distress you’re presently experiencing… help you get laser-focused on your highest income-producing activities… and help you develop and then apply the fundamentals that build multimillion dollar businesses. click here to see for yourself.

The True Value Of Sticky Customers

 

Can you exit your business if you’re in a declining industry?

The answers – according to CJ Whelan, who co-founded Adigo, a teleconferencing business, is yes — on one condition: you must have sticky customers.
In the absence of an innovative product, acquirers may still buy your business if you can prove you have a loyal customer base that is likely to keep buying years into the future. Adigo enjoyed churn rates of less than 5% per year, so easily attracted three competing offers.

In this episode, you’ll learn:

• Why happy customers could be your most strategic asset
• What churn is and how it impacts your value
• The one thing that makes a business attractive to multiple buyers

Listen Now

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If you’re interested in improving the value of your business, take our questionnaire or contact Colonial Business Brokerage today at 443-982-7332.

 

WP Curve Get Acquired By Go Daddy

In 2013, Alex McClafferty co-founded WP Curve, a company that provided IT support for people with a WordPress site.

McClafferty and his partner stitched together a network of contract support professionals in developing countries and quickly grew the company. They hired a few managers, and by the beginning of 2016, McClafferty was already looking for an exit.

He wrote his goal down on an index card that hung in his office:

  1. All-cash offer
  2. Sell to a 3rd party

He asked around to see what his company might be worth and was disappointed by the initial estimates. Then internet giant GoDaddy approached McClafferty, indicating they wanted to grow their WordPress business and saw WP Curve as a perfect fit. In this episode you’ll discover:

  • The quirky visualization trick McClafferty used to get his employees to provide support customers could understand
  • “Outside In vs. Inside Out” thinking and how it can be the secret to winning the attention of a strategic acquirer
  • What an “attached rate” is and why it’s important to buyers
  • Two surprising reasons big companies buy little ones
  • How to avoid falling victim to the fishing trick
  • The biggest mistake first-time sellers make in dealing with corporate development professionals
  • Why non-linear scale matters

Listen now

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If you’re interested in improving the value of your business, take our questionnaire or contact Colonial Business Brokerage today at 443-982-7332.

The Secret To Great Marketing

Previously, we discussed the purpose of marketing… to help facilitate your prospects’ decision-making process.

I also said there were two additional ways to view marketing’s purpose in simpler terms…

enter the conversation taking place in the head of your prospect
answer the number one question on your prospect’s mind… at just the right time

I then asked you to evaluate your marketing based on those critical criteria.

How did your marketing stack up?

I then offered to give you a hand with that evaluation using my Conversion Equation Evaluator that has the power to predict the future success of your marketing… both from a results and a financial standpoint.

Today, let’s discuss the three critical fundamentals of marketing that were highlighted in the video I asked you to watch.

Click here if you haven’t watched it yet.

The three fundamentals of marketing are…

  1. have something good to say
  2. say it well
  3. say it often

Let’s explore that first fundamental today… have something good to say.

This fundamental is neglected by virtually EVERY business owner on the planet.

To have something good to say means that your business MUST be unique when compared to all the others who sell what you sell.

You must be different… there must be something that separates your business from all of your competition.

Remember several emails ago I mentioned that most businesses all look and say the EXACT same things?

When businesses copy each other, it forces those businesses into price competition, because price then becomes the ONLY differentiator for prospects to consider.

It becomes the ONLY value proposition left to the prospects.

Any business that determines it isn’t unique MUST innovate so it does become unique.

Domino’s Pizza did this back in 1971.

Domino’s became a billion dollar behemoth in an overcrowded market back then.

Did Domino’s make the best pizza? Not even close!

Did they offer comfortable in-house dining like ALL pizza places did back in those days? No way!

Did they offer the largest selection on their menu? NO… they offered the exact same pizza as ALL of their competitors!

They dominated by having something good to say that was radically different back then when compared to ALL the other pizza franchises… fresh hot pizza delivered to you in 30 minutes or less!

But then Domino’s had to innovate in order to make good on that promise.

They specifically targeted hungry college kids living in crowded dorms (densely populated where few had transportation).

Domino’s went to small shopping centers located nearby the various college campuses and rented small storefronts just big enough to accommodate a pizza oven and a preparation counter.

One kid made the pizzas while another delivered them.

The result – Domino’s became a billion dollar behemoth in an overcrowded market.

You can do the EXACT same thing with your business.

And if you do, you will be well on your way to dominating your market, just like Domino’s did.

Next week, let’s discuss fundamental #2, say it well.

See you then.

Tom Flowers

P.S. Also remember, to determine how likely your marketing is to convert, simply fill out my Conversion Equation Evaluator.

This evaluator has the unprecedented ability to predict the future success of any marketing collateral you develop… as well as predict whether that marketing will be profitable or not. And, it’s 100% free to use!

After calculating your marketing conversion level, I can show you exactly what to do with your website and marketing collateral that could double or triple the number of prospects who respond to your marketing.

Just schedule a complimentary meeting with me.

The Backstory Behind E&J Gallo’s Acquisition of Barefoot Cellars

Michael Houlihan and Bonnie Harvey built Barefoot Cellars to sales of more than 600,000 cases of wine per year when they got the attention of E&J Gallo, America’s largest winemaker.

Gallo was impressed with how quickly a $7 bottle of Barefoot moved off retailers’ shelves and were intrigued by Barefoot’s use of grassroots sponsorship to grow a national brand. Rather than compete with Barefoot, Gallo decided to buy the business. In this episode, you’ll learn:

  • Why the best goals are often set for you
  • How to use distributors to win the attention of an acquirer
  • The difference between a vanity and a strategic buyer
  • The single most important thing you need to do before you put your business up for sale
  • How to create a silent auction for your company

Listen now

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If you’re interested in improving the value of your business, take our questionnaire or contact Colonial Business Brokerage today at 443-982-7332.