- Much older owners are now looking to get out.
- Next generation may have screwed up.
- Niche vs foreign commodity competition.
- Automation and leading edge technology.
- Innovation comes from established small niche businesses.
- Realizing opportunity currently under your roof.
- Sales and Marketing to go to the next level.
- Sell 70% of your businesses, work with the new owners and enjoy a huge windfall on your remaining 30%.
- Buyers are looking for unsexy below the radar companies.
- Buying platform companies.
- Protecting intergenerational wealth.
- Family businesses, ups and downs.
- Runaway bride.
- Fathers and daughters.
- Selling to your children.
- Families act the same in your business as in your home.
- Entitlement issues.
- Lots of options for Owners to exit.
- Work back from what's in the best interest of the Owner.
- You don't know what you don't know.
- Surround yourself with an experienced team.
1. Know Your Target Audience.
Understand members of your target group thoroughly, including their attitudes toward the services you offer (e.g., is the purchase of your product or service important, fun, or a necessary evil?). What motivates them, excites them, and makes them want to come back? Be honest and clear about your target group. It is not all adults or all females or all females with blue eyes. Get as close as possible to the core of your target audience and know who is really buying your product or service. Create a mental picture of your customers. See them clearly and make sure that anyone involved with your business has the same picture.
2. Be Up-To-Date On Your Competition.
Be completely up-to date on your competition. How are your competitors marketing? Are they spending more on marketing than you are? Are they spending less? What kind of results are they getting? Know what your competition is going to do before they do it and prepare yourself. Learn from their mistakes and their successes.
3. Set Clear Objectives.
Determine where you want your marketing efforts to take you. Is it your objective to maintain the business you have with minimal growth, just enough to make up for any customers who leave? Or do you want to grow your business? Do you want to develop a highly successful system that could be franchised? Or do you have a short-term plan to develop your business rapidly in order to sell it quickly and profitably? It’
4. 20% Of The Effort Equals 80% Of The Results.
Review past sales figures and understand the 80/20 rule. Typically, 20% of your customers will represent 80% of your sales; likewise, 20% of your effort will deliver 80% of the results. Check your accounting records now!
5. Create A Marketing Plan.
Have a written marketing plan. The old expression ‘‘If you don’t know where you’re going, any road will take you there.’’, has never been more true. Every day you are faced with new challenges and opportunities. If you don’t have a road map it is very easy to drift for a long time never quite succeeding.
6. Develop A Sales Plan.
Develop a realistic sales plan. Know what you want to achieve and where the sales will come from. Adhere to a defined sales process and follow up at each stage of the process. There are many books and courses that outline well-defined sales and marketing processes. Find a process you believe in and follow it loyally. Consider what you need to do in sales versus what you want to do.
7. Be Up-To-Date On Your Industry.
Be as up-to-date as you can on your industry and on your customers’ industry. Vertical industry publications will help keep you informed of trends and opportunities. They usually do an annual year-end wrap-up and make predictions for the future. If you want to know where your industry is going, this is a great place to start. (This is a really valuable tip as these publications do the research for you.) Talk to suppliers, customers, and even your competitors.
8. Identify New Technologies.
Identify new technologies that will enhance your marketing efforts. All kinds of software, online apps, email, cost-effective low-run four-colour printing, and the internet make competing with larger companies much easier.
9. Put The Customer First.
Put your client/customer needs before your own. If you put your customers first, they will notice and remember it at decision making time. It helps if you love what you do. Customers want to be with winners, and loving what you do will get you through the tough times.
10. Have A Point Of Difference.
Be clear and concise about what product or service you offer and how yours is different from your competitors’. Make sure your marketing efforts consistently reinforce these differentials.
11. Re-Evaluate Your Business.
Constantly re-evaluate your business. Every meeting, presentation, and discussion you have about your business is an opportunity to re-think what you are doing. Challenge every aspect of your business and make it better every day.
“You’re not in this alone. Make sure to have others handling day to day marketing tasks.” EG
Are you running out of runway?
Feeling tired and not prepared to do any more work on the business? Maybe you waited too long to sell and the end is still not in sight. The kids are now older and not interested in running the company. Employees are not prepared to buy or run the business. You may have had an inquiry to purchase in the past, but that's long gone.
You're being advised to run things differently so you can attract buyers. It's apparent to you and everyone else you can't or don't want to run your company differently than you have been for the last 30 years.
It really is time to sell and you don't have 5 years to do it. Now what? Can you sell it sooner? That remains to be seen. Even if you could, you won't get nearly what you want or need.
Pressured and no idea who to turn to? Giving it away or just closing down won't pay for your retirement. Like many other boomer age business owners, you never saw this coming and don't know what to do.
If you're running out of runway, then perhaps we should talk about the alternatives.
For some it's going to be a tough go selling and retiring comfortably. For others you and your family may be covered for now but what if (insert worst fear)?
Perhaps we can help with our WarrenBDC Process. Take the first step in a journey that could take up to 5 years or possibly much less. It's in your hands now. Contact us now.
I was thinking about grandchildren and legacy. What statement an Owner might leave to future generations by his actions taken toward the end of his time running the family business. I've written two scenarios from the perspective of how an SMB Owner might be perceived by future generations.
Legacy A - Something to be proud of.
Our grandfather/great grandfather (your name here) was a successful businessman. While he grew a tremendous business to leave behind, he made sure his family and staff would be well taken care of.
Charity and good deeds were part of the fabric of the company and his life. Integrity was a basis for all negotiations, encounters and relationships.
He planned ahead and when his time to transition the company came, all was in order.
We are lucky to have the choices we do. To follow in his footsteps in business and in life. To live life to its fullest, give generously and appreciate our good fortune every day.
He left a legacy of wealth and example. We are the proud stewards of his legacy, and live by his example.
Legacy B - Not sure you'd be proud of this.
Our grandfather/great grandfather (your name here) was a successful businessman. He loved what he did and 'died with his boots on'. He couldn't see himself living any other way and never took the steps necessary to transition the company properly.
While we admire the passion, the series of events that happened after his sudden and unprepared for passing have devastated our family.
No one was trained to take over. Not family or other. The business started to falter the minute word got out that he was no longer running things. Customers got nervous, vendors demanded quicker payments and staff began to panic. No leader, or at least no capable, prepared true leader stepped up.
Competitors and Buyers began to circle the company like sharks smelling blood. Our grandmother/great grandmother didn't know what to do and chose to take the first offer that came along.
Some of our family, who worked in the business and a few long time employees were let go. The cash she received was nowhere near what our grandfather/great grandfather had assured her she would have to live on. Fortunately our family rallied and are taking care of her as family should.
As for future generations sharing in the success of a family business, we have all recognized that while it would have been nice to have some financial assistance for our lives and to leave for future generations as part of our own legacy we do not always get what we expect.
We will succeed on our own and ensure we don't make the same mistakes as our grandfather/great grandfather.
It's up to you to write the story.
When it comes to your future, you can hope for the best and plan for the worst or ... you can spend some time looking into your options.
As a boomer aged business owner, you may be feeling like time is starting to get away from you. The weeks and months are flying by and believe it or not, you're not getting any younger. Retirement planning is top of mind. How you'll spend your time and finances are both key considerations.
It's inevitable you will be participating in a transition, of one kind or another, out of your business. But will it be financially responsible? Will you walk away with the funds you need to enjoy the balance of your life? What will you do with your time if you're not working 'in your business'. Who will you be? What will others think?
I will not sugar coat it. There is work to be done. You will have many conversations with your spouse, partners, senior management, board, staff, family, business associates, friends and advisers.
Decisions will need to be made and followed through on. In the end, if it's done right, this will be the sweet end of an era for you and the beginning of a great new adventure.
To help with your initial fact finding and planning, how about scheduling a 'clarity call' with me? We can talk about your current status and readiness for selling the business.
I can answer questions and hopefully bring you a little closer to making some hard choices about transitioning. At the very least we'll move you along the path.
So sleep on it and if the mood strikes please give me a call tomorrow.
Call 416-270-2466 or email email@example.com
I didn't start out to become a family therapist. It just happened. If you're the Owner of a family business perhaps you can relate to this week's message.
Working with family business owners is fun, challenging and very rewarding for me. Their business and personal lives are intertwined. More interesting is when you add in partners (and their families) who also own and run the company. Another layer of complication. Blood family or work family they typically interact very much the same. They are family and that means holidays and special occasions together, personal conversations and typically some fighting. Sometimes resolved and sometimes not.
If they are fortunate, respectful of each other and work hard at it the experience can be quite wonderful. If not it can get messy. As with any family dynamic everyone has their role and typically home actions are seldom different from work actions.
To keep the peace, you've learned to accept and deal with their peculiarities, their specific needs and the lack of change - no matter how hard you try to accommodate them. People don't change and hoping they will is a common theme in family businesses. Sometimes it only affects the family. Often the behaviour can reach into the success of the company and have a very real negative impact on non family/owner staff.
At some point you will determine that it's time to deal with the idea of transition. This is where I come in. If you think what I've written so far is even close to the truth wait until you start the transition process. The opportunity for challenges multiplies exponentially. Issues and ideas that have been tabled in the past, now need to be dealt with. Ambitions come out and the jockeying for position heightens.
Family therapy is only one part of the process, but it can be as key to your success as cash flow, sales & marketing, human resources and production. You will be riding two sides of the same sword, family and business.
You may think you have the family side handled until the serious conversation starts about the business. Who will run what, who gets what and about a thousand other things you never thought you would be dealing with. This is why I take on the role of a 'family therapist' as well as a Transition Advisor.
To address the many family and business issues that can come up we've created the Custom Transition Roadmap. In our process, both sides are covered and one without the other is not advised. Remember it's a 'family business'.
If you'd like to know a little more about our Transition Roadmap please click here.
Cheers, Eric Gilboord
Business Owners need to ask themselves this one question. The answers will come to them lightning fast. What stupid things am I doing to screw up a potentially successful sale or transition of my business?
February 2, 2018
After speaking with several of my readers and clients about their holiday break, I learned that the common theme was using the time to think.
With a nod to Jeff Foxworthy the comic, here is my list.
If you're thinking about running out of time, you might be ready to start transitioning.
If you're thinking about who could carry on your legacy, you might be ready to start transitioning.
If you're thinking about staying or going, you might be ready to start transitioning.
If you're thinking about growing your business way bigger, you might be ready to start transitioning.
If you're thinking about what your life will be like after, you might be ready to start transitioning.
If you're thinking about spending more time with family, you might be ready to start transitioning.
If you're thinking about what's going to happen to your staff, vendors and customers, you might be ready to start transitioning.
If you're thinking about how much you don't know about transitioning, you might be ready to start transitioning.
If you're thinking about what a great ride it's been, you might be ready to start transitioning.
If you're thinking about not wanting to stop, you might be ready to start transitioning.
If you're thinking about how to download your decades of experience, expertise and contacts to a successor, you might be ready to start transitioning.
If you're thinking about not knowing where to start, you might be ready to call me. Eric 416-270-2466 or email firstname.lastname@example.org.
Not quite ready?
The world of selling a business is not black or white like some owners think. There are many shades of gray. You owe it to yourself and those close to you, to find out what your options are right now. Listen to my latest podcast now.
Download this free PDF copy of MOVING FORWARD. Please enjoy the benefits of 'Getting The Triple Effect'.
Cheers, Eric Gilboord
If you're a business owner today it's not easy. The world is changing crazy fast. Decisions need to be made quicker, the implications can be more impactful and it seems like every day there's another new challenge you know little or not enough about.
So what's an Owner to do? Start by admitting you don't know and follow immediately with identifying someone who can help. If it was your golf swing or getting in shape you'd know where to go. If you wanted travel advice, it's pretty simple.
But when it comes to your business, your baby, the passion of your adult life. (Ok one of the passions of your life.) At least some of the decisions coming up are key and will affect you and others long term. So who you consult with is as important as the decisions you make.
Most Owners will do the knee jerk move and call their Accountant or Lawyer. But is this an appropriate time for their services? Are these questions outside their areas of expertise?
A business coach is a great choice. A coach or coaches could be helpful by providing insights, specific expertise, connections, objectivity, emotional support, cheerleading and a laundry list of other things.
But what kind of expertise do you require? Depending on where you are in the life cycle of your company will impact who should help you. Is it a start up coach, grow and improve coach or a start down and get ready for transition coach that would better satisfy your needs? As you drill down the choice will become easier.
Make a decision and try it out. If the choice is correct, next time a challenge pops up and it will, you can say to yourself - I don't know, but I know who can help me.
As a starting point, I am available for a no charge call or meeting to discuss your current situation. We could end up working together or not. At this point what you need is to drill down, talk to someone who is a good listener, impartial and able to bring fresh eyes to the conversation. I'm sure some new insights would also be welcome.
Often accused of being inside my readers' heads, I tend to understand quicker and more easily than others what you might be going through.
Offering to help you is my way of saying thanks for being a loyal reader and for graciously maintaining our relationship.
So feel free to give me a call or send an email and let's talk about you.
Make every day count.
Take action now, 'Coach Eric'
A great question and we get to answer it more often than we think. It's typically our choice and we live with the consequences. We also sometimes bring others into the result and are therefore responsible for the impact of the answer on their lives.
So regardless of whether you're making a poor choice in clothing and embarrassing your spouse or a business decision that affects the entire company you need to decide.
Would you rather be the one who says I wish I had or the one who says glad I did?
Take action now, Eric
If you want to 'Get The Triple Effect' - Sell your business for 3 times more and 3 times faster.
Purchase my book from Amazon.ca or Amazon.com
Ask yourself right now. Who would you rather be?
We make decisions all day every day. What to have for breakfast, who to call, emails to send, customers to take on or drop.
Usually it's a combination of our mind and gut feelings required to choose which way to go. Gathering information online, talking to friends and seeking the experience of professionals all add to our final choice.
At the end of the day it's up to us. So we can take the easy way out and go with a recommendation from someone else. The added benefit here is you have someone to blame if it doesn't work out. Or we can take total responsibility for our actions and consult our gut.
Many of my best decisions come from my personal adviser, my gut. Sure I gather information first. You can't make good choices in a vacuum. But then I act.
Do you know a 60+ year old owner of an established business? Perhaps a friend, spouse, parent or client.
Are they feeling 'a little stressed about transitioning out of their business'? They may not say it out loud, but you know them well enough to be concerned.
If yes, please click here and find out how they can turn that stress into happiness. Or simply forward this page.
As the Owner, you know all the wonderful things about your company. But that doesn't mean a Buyer automatically does. You will have to tell them. Making someone work for it isn't the smartest strategy. It's not just numbers Buyers need to consider purchasing your business.
You know who your best technical staff are, the ones who are the most loyal and the small circle you can count on any time. The folks I like to describe as 'in a crunch it's always the same bunch'. The staff with huge potential who are consistently growing and assuming more responsibility. The key people you've been grooming to take over management. The loyal, hard working day to day heartbeat of your organisation.
This is the knowledge gained over years of working together week after week. Experienced Buyers can acquire some of the information via staff interviews, but not near what you can provide. If you think you can hide the dirt, think again. Maybe you can for a while, but the truth always seems to surface. The Buyer of today is typically seasoned and short on a capacity for BS.
You know how great your relationships are with specific large key and smaller long-term customers, but the Buyer doesn't until you show them. You know the ideas and opportunities that have been on the back burner and are ready for moving forward.
You need to dig out all the great things about your business, the obvious and the not so obvious. The things you take for granted and the stuff you just do because, well you've been doing it forever. The new innovations and the upcoming industry trends you spotted years ago and have prepared for. The relationships with friendly competitors and the strategic alliances.
And don't forget the numbers. They will be requested in every configuration and scrutinised with a magnifying glass. Knowing how to present them is key. If you can't anticipate the requests and respond quickly the momentum can get lost pretty easily.
Yes, after the NDA.
It's not about bragging or blowing your own horn. More like sharing the many accomplishments you and your staff have achieved over likely, give or take, 30 years of blood, sweat and tears. Sales, well run processes, reputation, innovations and industry standing are all important. The successes you've attained need to be recognised and you need to be compensated for them.
You can't expect a potential Buyer to just uncover the information or glean it all from your conversations and retain it on their own. The data has to be packaged, wrapped in a bow and presented like it was the greatest gift they will ever receive.
As with many large purchases the decision will be made by more than one person. The Buyer may make the final decision, but they will consult with others.
Your company story needs to be told with as much impact and backup detail as your most important sale ever. But more so, it needs to be transportable to other offices and the many conversations that will go on while a Buyer is considering the purchase of your business. And frankly, you or your representatives will not be in all those meetings and conversations.
So remember, as you move down the path of transition, you can't keep the wonderful things about your business, both the obvious and the hidden value a secret. If you expect to sell for top dollar and on your terms you need to clearly tell the complete story in an interesting, informative and exciting way.
The trick is to dig it all out and communicate all of your company greatness in an easy to digest format. Present it so anyone can get your story quickly and easily. You don't always know who is being told about you and under what circumstances. What you do know is, they will be influencing the purchase decision. Or the potential Buyer wouldn't be talking to them in the first place.
Subtle or heavy influencer, they can only comment on what they've been told. You can control the story more or less. Shouldn't you make it more than less.
To help tell your story or to discuss the many services we have available to increase your odds for a successful transition please contact me today.
Call 416-270-2466 or email email@example.com
Some food for thought before handing your business over to a next generation family member.
I remember meeting the Owners of a small business. He had worked hard and the company had provided his family with a comfortable life.
There were 3 sons. One worked occasionally in the business, wasn't suited to take over and never really did much with his life. A second son had other ambitions and enjoyed a very successful career in law. As for the third son, unlike his brothers, he worked in the business full time, made a living and started his own family.
So when it came time to think about transitioning and rather than selling the company to an outsider, the Owner along with his spouse made a decision based on emotion and blood.
The third son thought it was his right to take over the company. Although under qualified and not yet possessing the maturity to succeed, the Owner turned the company over to him. With no cash investment, only sweat equity, winning by default and having day to day experience working in the business he was charged with preserving the family golden goose.
Thinking far more of his own capabilities, having no real transition plan or safeguards put in place by the Owner (his Father) and now being in charge the third son made the decisions his way. As the Owner had an ailing parent, some health issues of his own and other distractions he was not always available for counsel or oversight.
The immature third son saw this as an opportunity to put his own mark on the company and in the process promptly drove the business into the ground along with the Owners' life savings and retirement funds. Fortunately the successful son, the lawyer, had the means to take care of the parents as the other two did not.
Why did the parents turn the business over to the ultimately unsuccessful son? As I wasn't present at the family Sunday night dinners, I'll never really know. What I do know is that people make poor decisions and do stupid things for blood.
I also know that it's in my power to repeat this story as often as possible. So it doesn't happen to your family. I'm sure everyone had the best of intentions. But that only takes you so far.
Three key questions to ask before you even consider handing your company over to the next generation.
1. Do they want the business?
2. Are they qualified to run the business successfully?
3. Can they afford to buy the business from you?
And one more key question you need to ask yourself. How will this decision affect the rest of the family?
At WarrenBDC, we have developed a special group exercise to quickly gain insight into what the future of your company might look like if you make this kind of choice.
To discuss the options and our services available to increase your odds for success please contact me today.
Call 416-270-2466 or email firstname.lastname@example.org
It's easy to get caught up in the day-to-day only to miss the big picture. Consequently, opportunities can disappear as quickly as they came.
As a business Owner, this can be an easy trap to fall into. We all do it. I'm not suggesting you ignore the small stuff, just don't get personally involved in every decision. Have someone else take care of it.
Why would you hand off important and not so important decisions? Because if you and your staff continue to run the business as if you're the only one who can make the right choices or solve the problems, you will live to regret it. If you don't already.
Eventually the reality will hit you, you're not running the company, it's really running you. Instead, you should be thinking about the bigger, more important issues. Like how exactly you're going to get out.
One of the best ways to exit is to increase the value of your business. Then you can sell or transition for the most money and on your terms. All you have to do is make it desirable to Buyers and allow it to run without you.
Somewhere down the road the company will be sold or transitioned. It may be while you're still around to enjoy it or after you're gone. Either way if you're like far too many Owners, who are the epicentre of the business, it will be problematic. Your people will struggle and or a new prospective Buyer will see immediately, in the very early stages of due diligence, that without you the company cannot operate optimally.
And that my friends, is where you lose the leverage you thought you had. Value goes down and terms end up in favour of the Buyer. If you don't currently have internal resources to accept the responsibilities then grow them or hire/contract from outside.
If you run a family business and have not yet let the next generation step up completely, (you know who you are) I guarantee family dinners are about to get more heated and a lot more exciting. BTW if you are the next generation, do yourself a favour and forward this email to you know who. At the very least, you can use it to get the conversation going on a far more serious level. i.e. Look what Eric wrote this week. Sounds like our family. Pass the green beans please.
When the company is running successfully on its own you don't even have to sell. You could conceivably have the business carry-on and continue to provide income and stability to your family and employees for an indefinite period of time. It just needs to run without you. You want options.
That's right, it's your cue to move on. Not sure what you'd do with your time? Call me and we'll talk.
For the past little while I've been taking a part of my day, no not every day but many days, where I just stop for a few hours and think about the business. I'm not involved in solving small problems or day-to-day details. I'm just quietly evaluating the company, thinking about the future and the next steps required to get where we need to be and then working back from there. I'm enjoying myself more and our company continues to grow.
So slow down, hand off and enjoy more. It could make a huge difference in your future and the lives of those around you.
As always, I am available for a telephone conversation, a coffee or to guide you out of the jungle.
As Mike Tyson so eloquently stated "everybody has a plan until they get punched in the face".
Extended Version: Many boomer age business owners have been putting off transitioning their company for so long, it's now the accepted status. Or they promised their spouse, the team, advisers and most importantly themselves, five more years and I'm out.
But suddenly circumstances change and you're faced with an unsettling feeling in the pit of your stomach. You want out, but you're trapped, for at least a period of time. And it's always longer than you want it to be.
Could be changes in the business environment are making it too much work. New competition is coming out of nowhere. They're well funded, younger or seasoned owners getting back in the game, more aggressive and kicking your butt. Higher interest rates, cross border restrictions and you get the picture.
Personal reasons rank equally high as business or higher. Grandchildren are at that age where you can't afford to miss a minute of the fun. A dollar store purchase of a whoopee cushion can be the greatest gift and provide kids with hours of fun. Seriously, do you want to miss that?
It's a family business and the patriarch and matriarch pass on. After an appropriate grieving time, everyone in the family wants their share. Active in the business and non active family members all want what's theirs and to make their own decisions. And rightly so. Now you find out who holds a grudge. Who thinks they should have been active in the business but were overlooked.
The original thought, (not plan), was 5 years and you would be out. The new reality is 5 years now needs to be 1 or 2 years. Regardless of how unrealistic that is, it's the cards you've been dealt. You can get out in a short time frame but not likely for real money or the amount you need and on your terms. If you had prepared the business for sale or transition you could have absorbed the fallout of a condensed timetable.
This is when the 'now what do I do' kicks in. You haven't planned ahead and certainly not for a much shorter time frame. Reality steps in and punches you in the face. Making decisions when you're dazed, confused, and pressured typically never ends well.
Regardless of the reason for a change of heart, when it's time to sell, the clock starts ticking. You can't stop it or change it back, time continues moving forward and eventually you will run out.
The point is, start getting ready today. Because even if you know the punch is coming, likely you won't see it until it's too late.
If it does happen this way, you need a first class team in your corner to help you through the transition. More than likely your current legal and accounting advisers for the business don't have experience selling a company. It's like asking your running buddy to help you get ready for a boxing match. No good will come of it. They may have the best of intentions, but not the experience. There will be blood or at least bruising. Remember keep your left up.
As always I am available for a telephone call or coffee.
Selling Businesses and Buying Businesses
An email I recently received.
I am expecting an offer from my partner to possibly buy me out. If this falls through I will contact you.
Thanks for the update. Food for thought. I recently had a conversation with another Owner we have been talking with over the last couple of years. His plan was to buy out his partner of 30 years or have the partner buy him out. The partner chose to be the Seller.
The Buyer, our contact, chose to do the deal on his own. We offered our services but he declined as he knew his partner well and they have had a 30 year relationship. After literally a couple of years of discussion the deal was supposed to finally close on January 2, 2017.
It has so far not ended well. They are no longer friends, the Seller continues to go back on his word and change the deal and the whole sale may never happen. The result will potentially be metaphorically like 'a divorced couple living in the same house'. You don't really know someone until you negotiate with them from opposite sides of the table.
Sadly, as of Jan. 22, 2017, it still has not closed yet. The Buyer and Seller no longer trust each other and a 30 year friendship is ruined.
In another case the Owner was planning on his key person buying the business, although he never actually asked him if he was capable or interested. When the question was finally posed the answer was no he was not interested in buying within the Owners timeline and no he did not have anywhere near the funds. Unfortunately that was the Owners only play.
Isaac (my partner) and I would like to offer our services to help you and your partner engage in a harmonious and mutually satisfying transaction.
Not trying to be heavy handed or negative but the examples above represent only two recent attempted Sales By Owner.
Please let me know if you would like to discuss.
We wish you all the best in a positive and successful sale.
In case you believe one of the examples is you, know that it's likely not. This happens far more often than you think.
The current buzz in the business transaction world is that 2017 will be an incredible year for selling a business. Are you ready?
As always, I am available for a telephone conversation or a coffee.
Selling Businesses and Buying Businesses
My son and I got into a conversation about Trump the other day. And of course the inevitable what do we do here in Canada about our own leadership.
As we talked I realized that our discussion was less about the specifics and more about our own generational concerns and how the implications would affect us personally.
So with that clarity I understood we likely would never agree on everything and we both need to work hard to appreciate the impact the upcoming changes will have on each other.
There is a parallel between this conversation and a generational or transitional discussion about a business, regardless of it being family based or not. Most, if not all companies are being run by 2 or possibly 3 generations.
The thought I offer to you is this.
Get The Best Out Of Everyone
Excerpt from 'Moving Forward'.
When you sell or transition you need to make sure your successor understands the value of getting the best from everyone and you need to help them. They might be a family member, a long time employee or an outside acquirer. In any case you want the new Owners to have as much success as possible. Particularly if part of your compensation is tied into the future financial achievement of the company.
The new management may have been groomed to run the family business, in some cases, for their entire adult lives. Or you may decide to offer a loyal employee or management team member that opportunity. The originators of the business often try for years to educate, share their experiences, impart their wisdom, and mould their successors. Some succeed others don't. Family isn't always the best choice. In fact it's more rare than you might think.
Share what made you successful and make sure that goes for everyone involved with the company as well. Give the new Owners complete and unfettered access to you and the senior management team. An immediate and never ending inside edge to the key goings on of the organization.
Some of the same benefits (experience, familiarity, and loyalty) can be gained from non-family, non-management employees and business associates who offer expertise and experiences that are different from yours. They may not be an Owner but what they offer is invaluable. Make sure you pass this insight and access on to the new management.
In some cases the new generation will continue to operate the business as it had been run in the past, a safe short-term measure.
This strategy may have worked for the previous generation, but circumstances are changing at a dramatic pace. We are living in a time of new technology, new needs, and new ways of approaching problems. E-commerce, database marketing, social media, big box and online stores, branding, and many other new terms have not only entered our small business vocabulary, they have taken business over.
As part of the older management you may be set in your ways, a little tired, and perhaps a little too comfortable with a particular style of conducting business that has provided you with years of triumph (usually tempered by a few bumps in the road).
The younger management may be full of energy and have new ideas for reinventing the business. But working together, you both need to blend the best of both generations. Preserve the successes from the past, incorporate the new opportunities, and build for the future.
A reminder to the older generation: not everything old is good nor is everything new bad.
To the younger generation remember: not everything old is bad nor is everything new good.
As always, I am available for a telephone conversation or a coffee.
Selling Businesses and Buying Businesses
The first thing I'm consistently told by my readers, when we meet in person or speak on the phone, is they respect the honesty and tell it like it is attitude in my writing. I take that as a badge of honour. So thank you.
The truth and cutting to the chase is and always has been important for any successful business owner. I respect you by offering the truth and I expect to receive it back. Trust is earned over time and we slowly develop an honest relationship.
I think you do want it and you can handle it. One of the tools you used to build your successful business was and still is a strong BS meter.
At a high level, you have likely not moved forward with plans to sell your business because of at least one of the following:
The conversation usually continues with a variety of questions about our experience, credibility and relatable stories of other owners we are working with. (Nothing identifiable is ever said and names are NEVER used).
At the same time it is important to make sure you have as much time as you need to tell us your story. If we haven't offered at least 2 or 3 suggestions on how you can increase the value of your company in the first conversation then we are having a bad day. Sorry we will make up for it next time.
The questions we are typically asked are as follows:
The post question conversation usually goes something like this. Wow I didn't know what was involved in selling my company. I knew some of the ways my business could be made more valuable but had no idea there were so many more opportunities. I'm surprised at what a difference a little work pre-sale could make in the selling price/transition terms and how that translates into cash in my jeans.
So when you're ready to hear the truth about selling your business and have a pair of fresh eyes or two look at your company, call me. I like making new friends and setting people straight. What you don't want is someone telling you what they think you want to hear.
You can handle the truth, I know you can.
In the spirit of getting closer to the truth, download a pdf sample of my new book 'Moving Forward' available on Amazon.
However, if we agree to meet in person, I'll send you the complete book in pdf prior to the meeting.
Selling Businesses and Buying Businesses
The holidays are right around the corner. You have a not too frequent opportunity to speak with your entire family about the future. To talk about the business and what is going to happen.
Scheduling meetings or lunches or whatever to try and get to everyone during the year could be overwhelming. So how about taking advantage of the holidays? When pretty much everyone is already there. As for those who are not, there's always the phone.
No, I'm not talking about starting a bun fight. How about a quiet, private conversation with each family member individually. Take their temperature on how they perceive the business and their role or non role to date. What are their expectations for the future?
No need to discuss realities with them just yet. It's a time to listen 100% of the time. This is an exercise solely in understanding where they're coming from. You may be surprised by who steps up and who backs away.
That's it. No family feud at the dinner table, not an evil eye thrown or a dinner roll for that matter.
The best part is you may walk away having gained an even deeper understanding of those closest to you. And that my friends is a real holiday gift.
Wishing you all the best in this holiday season.
Selling Businesses and Buying Businesses
I'd like to suggest a question to ask yourself over the holidays. Do your plans for the future of your company include selling while at a peak in value?
Many companies we meet with, show neither top or bottom line growth. Owners have instead, resorted to stalling growth and squeezing whatever cash they can from the business. Some Owners are tired and lack the energy or incentive to continue growing their business, let alone sell it. They think they'll have enough to live on in retirement but continue to come into work more out of habit than to make a real difference. Often working is the result of not having an alternative way to spend their time.
A lack of hunger permeates the company and over time the business stalls or worse fails because no new ideas or re-investment are made. We ask Boomer Owners to consider this. Even if money is not the incentive, why would you let your lifetime of work just peter out and end with a failed or deflated legacy?
It's a big question.
Some Owners step back, taking extended time off or even retiring and leave their trusted, loyal employees to run the company. Sure your employees know their jobs but does that qualify them to run the whole show? In our experience, the answer is no.
Often it does not end well.
There's always a 'peak value time' to sell a company and Owners who miss this selling sweet spot could be letting over 50% or more of their potential enterprise value just slip away.
What a waste.
Every day we speak with Boomer Owners who are thinking about retirement and selling their business. Some are sitting very close to the peak time and don't even realize it. A little effort and the increased value could translate into $ millions.
Too many believe they can get there themselves while continuing to run the business as usual. The truth is they can't. By the time they realize this, the opportunity to sell at a premium is lost.
It doesn't have to be this way.
Maximizing enterprise value and negotiating a successful business sale to achieve that 'peak value' requires years of experience and many different skills. It cannot be treated just like another sale or left to your employees and trusted advisers. You have to ask yourself, what if any experience do you or do they have in selling businesses?
The answer is likely none.
When it comes to outside help, we say to Boomer Owners, you have everything to gain and nothing to lose by bringing in a 'fresh set of experienced eyes' to help maximize corporate value? Do you want to be operating at peak levels when Buyers come knocking and sell at a premium price or not? This assumes you are a desirable company and can attract Buyers. Big assumption, not always realistic.
Some Owners get it, others do not.
The ones who don't, politely defer the decision to bring in outside help for another day, another week and another month. Their one moment in time gone forever and all that is left is regret. It becomes too late and they run out of time. Either the doors close, no one is interested or they are offered a fraction of what the company is worth. Did you really spend decades building to just give the business away?
On the other hand, some Owners light up and say you're right, when can we start? Followed by - if you can help me solve the problem we discussed in our first meeting like you did, can you also tackle this and this and ....
It's up to you. We are simply saying, allow us to help get your company back in peak condition by seizing the untapped potential and realizing a much greater selling price. Together we can help you finish on a high. Leaving a wonderful legacy of success doesn't hurt either.
We asked current Clients why they agreed to work with us. The answer was simple. "Once we met with you, we began to see the value WarrenBDC could bring to the table."
The holidays are always a good time to sit back and contemplate your options while peering into the future.
If you'd like to discuss how 2017 might look, please contact me directly.
PS It's ok to forward this email to your Boomer Aged Business Owner clients, family and friends.
In reflecting on the conversations, with Owners, I've had over the past year, I'd like to suggest a question to ask yourself. Do your plans for the future of your company include 'Striking while the iron is hot'?
In his first term, Obama, had control of both houses and could easily have passed any progressive legislation but chose not to. He wanted to 'try and engage the other side to accept his ideas', which they never did. Some saw it as a noble gesture, others just saw naivety, inexperience and an unwillingness to listen to more seasoned politicians. He had the power, the momentum and the right time, but chose not to act.
Now it looks like this may be one of the key reasons his legacy will be lost. He should have acted when the iron was hot because, as we now know, he never found another opportunity in the following 8 years to get much done, that one moment in time was lost forever.
Many companies we meet with, show neither top or bottom line growth. Owners have instead, resorted to stalling growth and squeezing whatever cash they can from the business. Some Owners are tired and lack the energy or incentive to continue growing their business. They think they will have enough to live on in retirement but continue to come into work more out of habit than to make a real difference. Often working is the result of not having an alternative way to spend their time. Sound familiar?
Lack of hunger permeates the company and over time the business fails because no new ideas, technology or re-investment is made. We often remind Boomer Owners that even if money is not the incentive, why would you want to see your lifetime of work peter out and end with a failed or deflated legacy?
Some Owners step back, taking extended time off or even retiring and leave their trusted, loyal employees to run the company. It's one thing to have a crew sail your boat. But without a leader who knows where to catch the wind, anticipate the storms, and more importantly take action and do something about it, you can end up lost at sea or not even finishing the race. Sure your employees know the business but does that qualify them to run the whole show? In our experience, the answer is not likely.
There's always a 'peak time' to sell a company and Owners who miss this selling sweet spot could be letting over 50% or more of their potential enterprise value just slip away. What a waste.
Every day we speak with Boomer Owners who are thinking about retirement and selling their business. For some Owners they're currently sitting at the peak time and place for a premium sale opportunity and don't even realize it. Too many believe they can do it themselves while continuing to run their business as usual. The truth is they can't. By the time they realize this the opportunity to sell at a premium or 'strike while the iron is hot' is lost. It doesn't have to be this way.
Maximizing enterprise value and negotiating a successful business sale to achieve that 'peak' value requires years of experience and much skill. It cannot be treated just like another widget sale or left to your employees and trusted advisers. You have to ask yourself, what if any experience do you or do they have in selling businesses? What we typically hear is not much.
When it comes to outside help, we say to Boomer Owners, you have everything to gain and nothing to lose by bringing in a 'fresh set of experienced eyes' to help maximize corporate value? Do you want to get back to operating at peak levels again and then sell at a premium price? Some Owners get it and others do not.
The ones who don't, politely defer the decision to bring in outside help for another day, and then another week and yet another month. Their one moment in time gone forever and all that is left is regret. I should've, I could've, if only etc. The doors just close or they get pennies on the dollar.
On the other hand, some Owners light up and say you're right, when can we start? Followed by can you help me with this and this and ....
It's up to you. We are simply saying, allow us to help get your company back in peak condition by seizing the untapped potential and realizing a much greater selling price. Together we can stoke the fire and help you to strike while the iron is hot. And finishing on a high, leaving a wonderful legacy of success doesn't hurt either.
We asked current Clients why they continue to work with us and what they would say to other Owners. The answer was simple. Once we started working together they understood the value WarrenBDC brings to the table.
So to make this an easy, low risk decision for any Owner (with annual sales of $3 million +) we are offering a 'one on one' in depth review specifically about your company. To make this meaningful, you will need to send us your 5 year financials under a strict NDA and allow us one full day to talk to you and your top three employees. We will then share our findings with you and demonstrate how we can make a substantial difference to your company and your future.
The cost to you is $6,500 for this initial step. The value is significantly higher.
The holidays are always a good time to sit back and contemplate your options. We hope this message and offer adds a positive option for you to consider and an opportunity to heat up the iron before you strike it.
To discuss your future, please contact me directly.
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