oSeriously, how long are you planning to wait? Or is waiting your plan?

As a boomer age business owner, selling or transitioning your company is likely top of mind. The story you're telling yourself and your trusted advisors may sound like this: "I know I have to do something ... it's so much work...timing isn't right...my children will take over...l have a partner" etc.

Your future, and the well being of many other people, depends on the steps you take over the next few years. You know you need to do something now or it might be too late. Protecting what you have built and positioning for the future are the priorities. The clock is ticking, ready or not.

When it comes to selling your business. If you don't move forward, the decision will be made for you.

Case 1 - Business relies heavily on importing custom product from China. Sales are totally based on travel and tourist industry. I wonder if the recent events will impact this company and its' chances for success in a sale.

Case 2 - Owner never made it to our second meeting. Went from healthy and excited about the future of his transition the first time we met to one week later no longer able to work. Potential sale of the company is not really viable.

Case 3 - Successful small distribution company has afforded the Owner a nice lifestyle. Unfortunately it is too small for anyone to be interested in buying and revolves too much around the Owner. Owners plan is to wait until they're ready to sell and then grow it and remove themselves from a central role. Good luck!

Case 4 - While contemplating the eventual sale of the business over the past several years the Owner is now faced with a government expropriation of his building and business. Unfortunately the government works in mysterious ways and will move ahead when they feel like it and at their convenience. Oh and the government will pay what they think is reasonable for the business. So living and running a business in limbo and no definitive idea of how much the Owner will be compensated or how long it will take.

Health, the economy, competition or industry changes will dictate what happens next. At that point all bets are off. You've lost control and you didn't get into your own business just so you could give up control.

Don't fall into the unrealistic timing trap. It will likely take 3-5 years from start to finish to be fully out of the business. You need to find a buyer, do the deal and then transition. 
Sometimes it can be done in less time if the circumstances require but typically it is a longer term proposition. At this point you don't know and it would be wise to prepare for the worst.

Right now you may not know exactly what you'll do after the business is sold. It's ok, that's part of the journey. You didn't have all the answers when you started or took over the company either.

Likely 80% of your wealth is tied up in your single largest asset - the business. Most owners tend to have inflated opinions on the value of their company. Wouldn't it be more prudent to find out the real story.

Take your first step today and see what your business might be worth. And more importantly find out what you have to do to get it.

Schedule a Call or Meeting

​Smartly Selling Your Business, An Interview with Eric Gilboord by Richard Dri

In this podcast I was interviewed by Richard Dri a Portfolio Manager and founder of Dri Financial Group at Scotia Wealth Management

Introduction by Richard Dri
Eric is the founder and CEO of Warren Business Development Centre, which assists business owners in maximizing how much their companies are worth, while finding the right people to purchase them. One of the bigger challenges Eric faces in his line of work is that many of his clients are older and often begin the selling process late and without proper preparation, with quite a few owners realizing they’re not yet ready to sell.

In this episode, Eric discusses how working in marketing taught him the ins and outs of how to value and sell businesses, explains why he talks about “transitioning” rather than retirement with his clients and imparts why it’s okay to make mistakes. 

Podcast Highlights:
Eric came to understand how business owners think by working with them for two decades as part of the marketing company he founded.

With WarrenBDC, Eric helps his clients understand the wide variety of options they have for their business when it comes to transitioning (i.e. retiring).

One of the first pieces of advice he gives his clients is to focus on the relatively small percentage of products or services that actually make up the bulk of their business, so as to not overwhelm them.

WarrenBDC typically doesn’t need to hire its own accountants and tax experts as the businesses they work with almost always already have them.

Eric’s firm charges its clients a relatively low fee up front because they have such confidence in their services that they can rely on the success fee.

WarrenBDC finds the most success working with older clients in the “widget” industry—those making practical products or tools that most people don’t even think about.

Eric prefers to use the term “transition” instead of “retire” when speaking to his clients because while they might be averse to the latter, most do recognize that as they get older their relationship with their company will change in terms of how many responsibilities they take on.

He advises entrepreneurs to be realistic about their business environment, make plans for the future, and accept that at some point you will make a bad call or poor decision.

Eric has a financial advisor, through whom he purchases funds. Eric also purchases and invests in private companies.

The most important money lesson Eric has learned is that the value a service or task provides is more important than how long the service or task took.

Quotes:
“20% of your customers do 80% of the business.”

“To us, it’s less about finding a buyer for a seller, and it’s more about putting the right buyer and the right seller together.”

“At the end of the day if you’re helping a lot of people to improve their lives, that’s a pretty good thing to be doing.”

“If you’re at the top of your game and the business is doing really well, it’s a good time to consider getting out.”

“A business is only worth what someone is willing to pay for it.”

You Never Seriously Thought About Selling The Business. Until Now

​Like many of our Clients you may have gone south for the holiday break. You caught up with winter friends. Some sold their businesses a while ago, some sold recently and this is their first "I don't have to go back" season and others are like you, still thinking about it. Until now.

You've been promising your spouse and children that transitioning was just around the corner. Or swearing up and down that you'd die with your boots on. Until now.

Boomer aged business Owners are a breed unto themselves. You've worked hard all your life building a company that has for the most part provided you and your family with a pretty good lifestyle. No complaints and no real regrets. Until now.

Selling the business was never required or even considered for financing vacations, cottages, winter homes, the kids education, some side investments, hobbies and any of the many surprises life throws at us. Until now.

The plan was to, at some point, transition out of the business and take it easier, however you define that. No pressure to prepare the business for sale first or serious thought about how much it would bring on the open market. You heard stories of Sellers getting 6, 7 or 10 X ebitda or auctions to buy your company. Fewer Sellers to compete with and more Buyers every day. It all sounded great. Until now.

The reality now is you need to sell the company to finance your retirement. You have no idea how long you or your spouse will live. Therefore no real way of knowing how much you need. Regardless of what you require, Buyers rarely pay 'what you need', unless the business is worth it. Just kidding. They don't care what you need, they pay what the business is worth. Until now.

Let's do the math. 65% of all established businesses in Canada and the US are owned by Boomers - Owners born between 1946-1964 the oldest boomer Owner is 74 and the youngest is 56. Owners are rapidly backing themselves into a corner. Many businesses never sell. You thought you had plenty of time. You assumed or hoped you would get what the business was worth. Until now.

It was a Sellers market, as many Owners have not started the process or sold yet. To put it into real terms 90-95% have not sold and 80+% don't even have a transition plan for selling their business or a team to help sell it. So to be clear, you were in the driver's seat if you had a well run, solid and profitable business with a big future and a great team running it without your participation. You planned and prepared for transition and a successful sale was in your future. Until now.

While you may be many steps above the other Sellers you may have waited a little too long. Buyers are now taking charge. They know you need to sell because of age, lack of enthusiasm, other interests, no successor etc etc. etc. They also know your fellow boomer aged Owners need to sell. As a Seller, you are running out of runway and have no choice but to take action. Today it has become a Buyers market. They are smart, savvy and experienced Buyers. They know way more about this than you do. Or your long time corporate Lawyer or Accountant who never sold a business. Think trading baseball cards with your older sibling.

Next Step - Get Advice, You Can't Do This Alone

One of the most valuable lessons I've learned from studying successful people is that no matter how famous or how rich they are, somewhere in their lives is a coach, a mentor, or an adviser. Successful people accept they will make mistakes and lots of them. They also seek out help to reduce and overcome the inevitable failures. It's part of the process.

The first thing a new President does is establish their advisory group. This applies to presidents of companies or countries. You can't possibly know what to do in every circumstance, particularly if these are new to you. Smart, successful people surround themselves with even smarter associates. Getting guidance is an important element in your future success. Take the first step and get advice.

From my heart, Eric Gilboord
eric@warrenbdc.com

Eric Gilboord is a lifelong entrepreneur, Author, Public Speaker and the CEO WarrenBDC, a company that  specializes in working with boomer aged business owners or those wishing to acquire their companies.

Eric is focused on solving a big problem. Sixty-five percent of all businesses in Canada and the United States are owned by baby boomers. Anyone born between 1946 and 1964. So this is a pretty big audience. Eighty percent of those owners do not have a plan in place or know how to transition. Most are counting on the sale of their company to fund their retirement, and in a lot of cases the value of the business is less that the owner needs for the desired retirement lifestyle.

In this episode Eric:

• Says Naysayers uninformed opinions are based upon their own life experiences
• Points out that the most important sale a business owner makes (the sale of the business) is the one they are worst prepared for
• Explains how he works with business owners to find unrealised potential
• States that the demand for businesses with predictable cash flow is strong
• Talks about some of the options business owners have when planning to exit
• Notes that after cashing out many entrepreneurs are choosing to buy another business rather than investing in financial markets

Interviewed by Tim Alison

Direct link to interview page: 
http://screwthenaysayers.com/ep-181-the-most-important-sale-any-business-owner-will-make-eric-gilboord/

Also listen to the interview with Eric here:
iTunes: https://apple.co/2LkWSPV
Screw the Naysayers Episode Page: https://screwthenaysayers.com/podcast
Google Play Music: https://bit.ly/2NBgqMv
Spotify: https://spoti.fi/2MF5T6g
Stitcher: https://bit.ly/2uYCsRC
Podbean: https://screwthenaysayers.podbean.com/e/181-Eric-Gilboord/

During the sales process there are two documents;

a) The Teaser - a short (1 page) doc, that gives highlights and is intended to solicit a prospect into asking for more information. This document is shared publicly so is written in a non-identifiable way.

Someone will then express interest and request more information. At that time they will enter into an NDA between our Client and themselves. Once that is signed we would share with them the CIM document.

b) The Confidential Information Memorandum (CIM) is a document into which we gather all the relevant information about the business, including its products, services, financials and markets.
The CIM is ONLY SHARED WITH Prospects that have signed the NDA, and that you have no other objection to sharing information with.

Typically the CIM would contain sections about the business to include;
1) Business Overview and Key Investment Highlights
2) Products and Services
3) Market Potentials and Variables
4) Sales & Marketing Efforts
5) Management Team BIOs
6) Financial Results and Projections
7) Risk Factors (Sometimes omitted) and Successes & Awards
8) Investment Thesis (why this is an attractive opportunity)
9) Anything else that might make this business unique and desirable.

The CIM is NOT a legally binding contract or offer for sale, rather it is a marketing document intended to make your business look attractive to potential investors.

An Investor or Buyer would use the CIM to determine whether they wanted to take the study further and to start compiling their valuation etc. They would likely start engaging and either meeting or asking more questions and from there make some sort of offer subject to diligence and legally acceptable terms to you. 

Included in the WarrenBDC fee is the necessary consultation and document preparation efforts to create these documents, and then to share and solicit this information with prospective buyers.

The final say in the document is ultimately our Clients to make, so at each stage once we have created the documents they are run by you for approval, before being distributed.

Cheers, Colin Ruskin
WarrenBDC

​Excerpt from 'Just Tell Me More - Marketing Tips in 10 Minute Chunks'

​Fanone International is a successful hairdressing salon owned by two brothers. For the past few years, they have talked about marketing. The brothers haven’t developed any specific marketing tools yet, but they meet regularly and plan to do some ‘‘real marketing’’ soon.

The fact that they have not yet created the standard marketing tools, such as brochures and ads, does not mean that they have not been developing and executing a marketing program. The Fanone brothers have been thinking about their business from a marketing perspective and have recognized that marketing is necessary to the success of their business. Their marketing is under way.

A few years ago, they moved the location of their salon and took full advantage of the opportunity to create a new and exciting environment for their customers. The new salon was so interesting they were featured in an industry magazine. They also participate regularly in hairdressing shows, as featured presenters, to increase recognition of their company name. They have reached a level in their profession that many competitors would do anything for. They have accepted offers from manufacturers to represent certain lines of products. And have their own line of products, sold worldwide.

The Fanone brothers were very specific about the type of employees they hired, seeking people with a good attitude toward the business and customers. The brothers want to make sure that they are building the best possible team in order to take full advantage of future, more traditional and new media marketing efforts.

A continuing discussion revolves around the demographical and psychological profile of the customers they want to attract. The atmosphere they have created in their salon is of utmost importance. 

The Fanone brothers regularly review the history of the salon and its past sales. Where did they make money and where did they give it back? What aspects of the business provide the most satisfaction? Are there cycles to the business with up and down times? Can they create promotional opportunities to smooth out the business over the year?

Are they taking advantage of the latest technologies? (Setting appointments on-line through the Internet is an interesting possibility.) Where do they want to take their salon in the future? What lessons can they learn from other salons (anywhere in the world) that are a few steps ahead of them? Can they identify and model themselves after a successful salon (or chain of salons) that is in a position in the marketplace that they want to be in?

The brothers continually review competitors’ literature to assess their position in the marketplace, promotional offers, target group identification, and product endorsements. These small business entrepreneurs want to know all they can about their immediate competition in their neighbourhood and around the world.

They participate in various hairdressing shows, making sure that they are featured onstage demonstrating the latest in hairdressing techniques in order to consistently reinforce their position as a leading edge hairdressing salon. Despite all of these activities, when they are asked whether they are conducting a marketing program, they answer that they are still preparing one.

These two hardworking, thinking entrepreneurs have recognized the importance of marketing and are determined to take full advantage of it. In fact, they are already marketing their business. Every day and through interactions with customers, suppliers, and staff, they are marketing their business because they are aware that every day and every interaction is another opportunity to fine tune their marketing efforts. When they decide to start a more traditional marketing program, they will be well prepared for it. Although these days who is to say what is traditional and what is new?

Many businesses have a best before date to transition.

​It may be best to sell before:

1. Your industry changes too much to keep up with.
2. You're too old to have a choice about transition anymore.
3. Your competitors decide to attack and drive your value down.
4. Your competitors make the move to sell first which can negatively affect your value.
5. You realize your kids have their own lives and are not taking over.
6. You finally see that your staff are never going to buy your business.
7. You are forced to accept the fact that it will take years to get ready, sell and fully transition out of the company and you haven't even started.

Or when the Owner has the realization that they don't actually have an open ended time frame to sell. Your trusted advisors have been asking you to think about selling. So has your spouse or partner. But you steadfastly held them off. Oops maybe they were right. Tic toc.

But like 80% of seasoned business owners, you've been putting it off. As you hit your 60's and 70's you slowly realize you've joined the 70% of owners who don't have a transition plan.

After having spent decades building a successful business, you've walked up to the edge of the cliff with no option to go back. It's a one way trip. You need to cross and time is running out quickly.

The likely outcome from waiting too long is that you may not be able to sell for as much as you could today or you have to sell for less than you need. If something unfortunate happens to you what have you done to your family and their future?

And yes I'm talking to you.

If you're confused, frustrated or just unsure about Moving Forward with selling your business, give me 15 minutes on the phone. I can me help bridge the gap and get you started along the transition path. No obligation other than a short conversation. You have everything to gain including a glimpse into the other side of the gap while learning about how to get there. And nothing to lose.

I really like meeting my readers. Eric Gilboord eric@warrenbdc.com

Excerpt from 'Just Tell Me More - Marketing Tips in 10 Minute Chunks'

​Tom and Joe are brothers who grew up working in the family business. Tom is conservative and, in his own words, not very creative. He chose to stay with the older, established company and continue in his parents’ footsteps, running the business as his father did for the past forty years.

He had no desire to change anything and felt that if he continued to run the company the way his parents did, he would have a nice lifestyle and hopefully be able to pass the business on to his children. Tom was not a marketing-oriented businessman. 

Every year, he followed the same marketing program, conducted seasonal sales, developed the same brochure (substituting a few new products), and worked with the same sales reps his father had employed for many years. Tom felt that if you built a good product, the customers would find you.

Joe, on the other hand, knew that there was more they could do with the business. He wasn’t sure what needed to be done, but he realized that marketing would play a large part in the future success of their business. Joe spent a lot of time out on the road, talking to customers, finding out what competitors were up to, and looking for new opportunities.

Joe often returned from sales trips and trade shows brimming with ideas. He told Tom that they needed to expand their marketing efforts to include new media and a social media program. But Tom insisted that they were doing enough marketing and had no reason to change. Sometimes when a business has been successful, the thought of new activities seems to be an unnecessary expense.

Unfortunately a business owner can wait too long, until the market requirements and competitors catch up to them and it’s then too late.

As time passed, the conflict with Tom became unbearable for Joe. He recognized the opportunities for the family business but knew that his brother would not change. Joe decided to start his own business. He knew that marketing was more than a brochure and the occasional sale. Over the years, he had learned that there are two key components to marketing:

1. Creating and using the various tools available.

2. Managing the marketing program from original strategy and design to the finished marketing materials.

Joe planned to stay in the same kind of business as his family. His first major commitment was to ensure that his business would be marketing oriented. 

He researched opportunities, became familiar with new marketing techniques, and established a long-term relationship with a marketing professional, who helped guide him and establish a team of suppliers to cover traditional, new media and social media marketing. Joe's strategy included using the best of the established methods and continually testing new marketing methods. 

Eventually, Tom’s business stagnated, sales barely kept up with expenses, and profits became a thing of the past. While Tom was suffering, Joe became more successful than even he had dreamed he could be.

Joe hired a marketing consultant. Together, they developed a solid sales and marketing strategy, embraced new technology by establishing a strong database, and conducted ongoing focused communication with staff, suppliers, customers, and prospects. They developed and updated sales tools on an ongoing basis to keep their sales force and customer service staff equipped with the latest in marketing weapons.

In time, Joe absorbed the family business into his own. Tom stayed on but acquired a new appreciation for marketing. Joe continued to manage the marketing efforts and his company grew large enough to create their own internal marketing team. Joe creates the company vision and the entire company carries out that vision.

These cases demonstrate how marketing plays a key role in the success of any small business. Ignoring the advantages that a structured, well thought-out marketing program offers could put your business in jeopardy. Make use of experts, try to benefit from their years of experience and keep up with the newest techniques.

​“Success or failure doesn’t randomly happen to you. You have a large say in when and how much.” EG

Excerpt from 'Just Tell Me More - Marketing Tips in 10 Minute Chunks'

A sign in the window of a convenience store boldly stated ‘‘No Change.’’ The store had been inundated with people seeking change for the subway or for parking, and the owners felt that it was better to keep them out of their store.

By posting the sign, the owners were effectively driving away new business. If they had taken a more positive approach, they would have seen a great marketing opportunity, not a problem. If the people seeking change were viewed not as a nuisance but as potential customers, a completely different strategy could have been employed to bring in new business.

What the owners could have done was equip themselves with a supply of change and posted a large sign reading ‘‘Change Available.’’ It is likely that many of the people who initially came into the store looking for change could have become regular customers over time.

Excerpt from 'Just Tell Me More - Marketing Tips in 10 Minute Chunks'

Lists like this one are usually made up of financial reasons for the failure of a small business. Unfortunately there are also many sales and marketing reasons. Fortunately, there is a positive step that can be taken for each one that will greatly increase your chances for success.

“These actionable tips are the responsibility of everyone who works with you. Make sure they know and understand them.” EG

​1. Face Your Weaknesses. Failure to face up to your weaknesses and a lack of effort to take advantage of your strengths can keep your business in a no-growth mode. Take two pieces of paper and list your company’s strengths on one page and its weaknesses on the other. Note the ways you can make your staff, customers, prospects, and other business associates aware of each of your strengths. On the page of weaknesses, identify steps to correct each problem. Discuss the points with your staff and develop a schedule to address them. No, it’s not really as bad as you think.
​
2. Take Action. Talking about the great marketing program you have been developing and following through with it are two very different actions. Implementing the program is the key to marketing success. Plan all you want, but be prepared to act on all the steps you have identified. Don’t be surprised to discover that there are some steps you hadn’t initially considered.

3. Accountability And Responsibility. Understand the difference between accountability and responsibility. Make sure your staff and suppliers recognize that by accepting responsibility, they are accountable to you and to the rest of the company. It is now their job to get the assignment completed.

4. Don’t Play At Business. Don’t play at being in business. It is not a hobby or a pastime. Think about the message you are sending to your staff, suppliers, and customers. A genuine commitment to the customer and to the success of the business will get you through difficult times. It will also pave the way for much more success in the future.
​
5. Avoid Ad Hoc Marketing. Struggling from one idea to another without thinking your complete marketing story through will typically end in one failure after another. Prepare a program for the year or at least for a complete season. Build on previous efforts to ensure continuity.

6. Seek Employee Buy In. When your staff does not support your marketing program, you are usually destined for failure. Get them involved early in the planning process and incorporate
their ideas.

7. Appreciate Every Customer. A complete disregard for customers is a sure sign that a business is failing. There is nothing more irritating than walking into a business or past a booth at a trade or consumer show and discovering that the person behind the counter is having a personal telephone conversation or reading the paper. Immediately, you are made to feel like you are interrupting. Customers should be welcomed into your business and greeted with your full attention.

8. Spot Trends. Recognize trends, changes, marketing mistakes, etc. A new trend that is different from your product or service is a terrific opportunity to present something new to your customers. New ideas also refresh your staff.

9. No Egos. If you suffer from the ‘‘not invented here’’ syndrome,fix it right away. Great ideas can come from anywhere and fromanyone. Limiting yourself to ideas created only at your company is viewing life through a very narrow lens. Seeking outside assistance and not listening to it is equally dangerous.

10. You Don’t Know It All. The assumption that all of your ideas are right just because they were ‘‘invented here’’ is also dangerous. You may know your business better than anyone else but you don’t know everything. Seek outside help.

11. Control Sales Staff. Lack of control over sales staff will result in missed opportunities and wasted hours. If your sales reps have little direction or support, they could be selling to whomever they choose. Often, they spend much of their time with existing customers and miss large new opportunities. Develop specific sales plans with your reps and review them regularly.

12. Create Tools. If you don’t create proper sales and marketing tools for your staff, you will make their jobs much more difficult. Arm them with well-thought-out selling tools and train them to use the tools effectively.

13. Keep Tools Impressive. If the sales tools you have are unimpressive, out of date, poorly conceived, or lack strategy or focus, they are damaging to sales opportunities. Work with your staff to prepare useful selling tools. 

14. Prepare A Realistic Budget. Don’t force your marketing group to live with a low or non existent budget. Be realistic about your expectations and provide appropriate funding to increase your chances for success.

15. Don’t Try To Spend Your Way To Success. On the other hand, if you spend too much money on marketing, you may not get value for your investment. Carelessly spending dollars on marketing does not always guarantee sales. You may need to rethink the media and promotional offers that currently make up your marketing program. Introduce a social media program that starts with a real strategy and has the manpower to execute it over a sustained timeframe. At least 2 years and if possible forever.

16. Promote Your Website, Content and Social Media Pages In
Traditional Media And Within Each Other. An important lesson recently learned by many participants in the internet is the need to go outside of it to traditional media. Aside from producing a well thought-out website, content and social media presence, the key to success on the net is to let your target group know where your site, articles and social media pages are located. Add your web address and social media pages to all of your communication materials: business cards, letterhead, invoices, flyers, packaging, and cross promoting between all your social media etc.

17. Answer The Telephone Properly. The habit of not answering the telephone properly or having an uninformed person answering it for you can be damaging. Customers and prospects become frustrated when they can’t get answers to their questions. Train your staff well and equip them with the most up-to-date information. If they shouldn’t be answering the telephone, don’t let them.
​
18. Don’t Lose Orders. They are so hard to get these days how can you even think about losing them. The problems of lost orders or orders not completed on time can be easy to resolve. Create a step-by-step fulfilment process with checking systems to make sure that an order is controlled from beginning to end.

19. Promote Yourself. Some business owners believe that the product or service they offer should be as irresistible to others as it is to them and that customers should just come to them without promotion. Not promoting yourself will only serve to keep your business a secret.

20. Encourage Others To Promote You. It is just as important to encourage others to promote you. If someone else has a clear understanding of what your company does and who your target group is, they can help to promote you. Develop a brief statement that identifies who you are, what you do, who you do it for, and why you are different from competitors. Make sure that anyone who may be representing your company to prospects understands this message.

21. Face Negative Word of Mouth Head-On. Negative word of mouth statements can have a devastating impact on your sales, far beyond one or two unhappy customers. Solve the problem quickly and win customers back. Those customers will be your best salespeople. The internet can make this a huge problem.

22. Use Resources Around You. The failure to use readily available resources can lead to wasted opportunities. Seek out mentors government self-help offices, associations, consultants, internet sites, and libraries. Talk to customers and suppliers and study your competitors.

23. Be Better Than Competitors. Don’t just try to be as good as the competition, be better than them, offer something different, provide better service, etc.

Exclusively for Owners only, to explore their transition options in a confidential safe space. This is not a networking event. Attendees will be vetted.
​
If you have questions about growing and or transitioning from your company and would like to get answers in a safe and confidential environment. Take a first step now with WarrenBDC and join us.

Attend a private by invitation only, limited seating event. Get on the list for our upcoming dates now. Our events are typically co-hosted with local trusted Advisors like Wealth Management, Financial Planners, Accountants, Insurance, Lawyers, Family Offices etc.

To learn more about hosting or attending email eric@warrenbdc.com.

COMMENTS ON ROUNDTABLE
​
Thank you Eric. Your warm and candid stories obviously come from your genuine desire to connect with your clients and your years of taking the time to care for their businesses and their families. You discussed complex issues with ease by making them relatable from the point of view of someone who may be unsure of how to go about transitioning their business either to family or to a third party. Thank you for taking the time to educate us in a warm and humorous way. You made a potentially anxiety-ridden experience an actual pleasure.

Regards, Anthony (Financial Planner Co-Host)

This is just a note to follow-up on yesterday’s lunch and dinner events. You engaged the audience so well with personal allegories that resonated with each of them. And thank you for showing such nice solidarity with Maricel, Anthony and me. Much appreciated.

I thought the “Safe Room” setting for our guests was particularly effective: we’ll set up another one soon.

Regards, Jody (Financial Planners Co-Hosts)

Not ready to leave your company just yet? There is an alternative. A way to take some chips off the table, stay involved and make a really nice bonus contribution to your retirement fund. Ease your way out while assisting the new Owners to drive the company to greater success.

A business model being used more often these days is for the Buyer to purchase 70%. The Seller retains 30% and stays on in whatever capacity they are most comfortable. Where required they provide a smooth transition to industry and customer relationships, while sharing their vision and insights for the potential of the business.

As the company increases in value the Seller will enjoy the benefits the new Owner brings to the table. At a predetermined time the remaining 30% is then sold to the new Owners or both parties together sell to another Buyer. Ideally at a much improved value. It's a win win.

There are many ways to transition a business. This is just one. It is in your best interest as the Seller to explore multiple sales opportunities available to you.

As usual, we are a phone call or email away and ready to help. Good luck.

Eric Gilboord eric@warrenbdc.com or 416-270-2466

Forward thinking business Owners (future Sellers) are doing something called a 'roll-up', otherwise known as buying up the local competition or complementary companies in order to grow. 

Smart Owners know some of these potentially selling owners are looking to get out. Wouldn't it be great to finally have that super salesperson work with you now instead of your competition? Gain competitors customers, exclusive or proprietary products, technical expertise and relationships. The list goes on. 

Whole new exciting worlds of possibilities are now open to you and your business.

Sharp Owners also know the trend is for serious Buyers to acquire profitable, larger, more substantial companies. So it makes sense to give them what they're looking for.

If you do the roll-up and integration into your company for them, the Buyer can come along a little later and buy the whole package. No muss no fuss. You get to offer Buyers a much larger and more desirable company to acquire. They get to avoid the whole messy, time consuming exercise of finding acquisitions, doing the due diligence, buying them and integrating the new company into yours. 

Oh and you get to sell a larger company for more money than you ever thought you would see in this lifetime. That is, if you do it right.

In order to do this right, you might need a little help with the whole acquisition, integration and growing part of the plan. That's where we come in.

If you're interested in learning more about how we can assist you with our Acquisition Strategies and Execution capabilities, let's talk. 

To get started or at least to find out what's involved let's have a brief introduction call. If you feel you're getting value and want to continue the conversation we can meet in person. 

Call me directly at 416-270-2466 and ask for Eric. Or email eric@warrenbdc.com

​As boomer age Canadians we've had the good fortune to grow up in what I like to think was a special place. Opportunities for education, jobs, freedom of religion and the list goes on.

Add the fact that many of us have made a good living as business owners and we have a lot to be grateful for. Whether or not you have routinely given to charities, religious organizations and those in need over the years is not important. What you do from here on is.

If you are reading this email then you either will be selling your business or you know someone who will be. After the sale an owner will likely have more time and money to contribute to organizations and individuals to make the lives of many better. Could be here in Canada or in other parts of the world. Giving back should be part of everyone's plan.

In the spirit of giving back and in order to do more and help more I would like to suggest a couple of things:

1. I've said this before and I'm saying it again. If you don't need any more money and are satisfied with what you think a sale will deliver to you in cash that's great. But it's not a good reason to just stay the course until a sale without trying to increase bottom line results.

Consider this for a moment. If you only need $2 million for your postsale life that's great, more power to you and I hope it all works out. However you built your business to make profit. If you could generate an additional $500 thousand or $1 million think about how much more good you could do with it. How many more people you could help.

2. Prepare in advance for the financial rewards you will be receiving from the sale of your company. Plan, investigate who to give to and make sure you are not surprised by unexpected tax issues that could drain your funds and negatively impact your ability to share the wealth. Plan so you can do more good.

On Wednesday July 31, 2019 in the evening, I will be attending an event, 'Charitable Giving' an Exclusive Educational Seminar. Discover more tax efficient ways to give to the charities that matter to you. It would be great to share my table with you.

Charitable giving and tax implications are not my business. Helping owners transition well and enjoy their postsale lives is.

Please consider coming, you'll do others and yourself a lot of good. Bring your spouse.

Details and registration here.

​If you have any questions please contact Maricel Ramos @: (647) 862-5280 or Maricel.Ramos@investorsgroup.com

Hope to see you there.
​Eric Gilboord

The 4 P's of success in life or business are:

1. Patience - Often times it takes years to launch a new idea and still more time to be successful at it. You have little real control over the thinking of others. Be it the world, family, friends or business associates. Some will come around to your way of thinking others will not. You know it's a great idea but 'they' may not be ready for it. The world is not on your clock.

2. Persistence - If you really believe in what you're doing you will not give up. Changing your thinking, adjusting the measurements, and revising your plan are all part of the process. Giving up is not.

3. Perspiration - If you don't do the work nobody else will. You can try paying someone else or coercing them. Unless they see the passion and real commitment from you, likely their effort will not be enough to help you be successful.
​
4. Passion - You can't be taught passion, buy it or be given it as a gift. It is so strong others can see it, hear it and almost taste and touch it in the way you present yourself and your ideas. It can't be faked or forged, true passion is very real. Genuine passion bubbles up from within. You can't contain or control it and without it your chances for success are slim.  Find something you are passionate about and start pursuing it now! It could take a while to get there. Don't forget to enjoy the journey.

Eric Gilboord, A2E
CEO WarrenBDC  
416-270-2466 

I often write and speak to groups and individual Owners about selling their company for 300% more than they could currently.

At first there is a look of disbelief,  quickly replaced by the question 'how'.

There are multiple reasons an Owner has stopped growing and or improving the value of their business. 

(The same comfort level logic works for most anything. Your health, personal finances or relationships etc.)

The company is the size it is currently because the Owner can control all aspects of it. Generate enough sales. Wrap their arms around the operations. Be comfortable with the finance side. Continue to run the same sales and marketing efforts. Not have to replace anyone. 

Basically they have reached a repeatable level of success. Essentially experiencing the same year over and over again.

But what if you want to have a different more successful year vs the previous one?

There are typically 3 key areas of your business that need to evolve, if you want to potentially transition a company for 300% more. 

1. Open your arms wider. Think bigger, take on larger opportunities, give yourself permission to stretch. Don't be afraid to screw up. It will happen and you will overcome and succeed.

2. Owners often tell me they can't finance growth. There are many more resources for financial help than the bank. Once you find one or two that work for you, you're comfort level will rise and that project you didn't even try for in the past is now real and in your reach.

3. ‎Finding good, qualified and reliable employees is difficult or impossible. First of all that's not true. You just need to find a great resource to help you. Once you do find the right assistance and make a successful hire, your luck begins to change.

The business runs better, new opportunities are identified and secured. You begin to attract the right staff and better customers. You have effectively removed some of the negative roadblocks and made room for more positive results. You've created a vacuum to be filled by success. 

Now you have the bandwidth to try some of the ideas that have been on the backburner. Tap into and reveal hidden opportunities to increase sales or improve processes, make your company what it should be. Bigger, better, able to run on its own.

Get out of the way, focus on just what you love to do and work on the business not in it.

It's not going to happen overnight. You will require help. And yes it's worth it.

Key Learning
Ask yourself 'WHO' can I find to get the above tasks done, not how.

If you'd like to discuss the future success of your company let's meet for coffee or lunch. You can tell me about yourself and your business. I can fill you in a bit on who we are. 

Alternatively please explore our website for more insights into this whole growing before transitioning thing. www.warrenbdc.com

Eric Gilboord
416-270-2466
eric@warrenbdc.com

The IBBA and M&A Source Market Pulse Survey Report for the fourth quarter of 2018 has a range of interesting insights.  The survey’s purpose is to provide an “accurate understanding of market conditions for businesses being sold in Main Street (values $0-$2MM) and the Lower Middle Market (values $2MM-$50MM).  This national survey was designed as a tool for business owners and their advisors and has the support of both the Pepperdine Private Capital Markets Projects and the Pepperdine Graziadio Business School.

One of the most striking facts to leap out of the report is the fact that a full one-third of advisors fully expect the strong market to end this year.  Overall, advisors are not optimistic that the current climate will continue through 2020.  In fact, advisors are encouraging sellers to consider placing their businesses on the market now, while the market is still strong.  This is according to Craig Everett, PhD and Assistant Professor of Finance and Director of the Pepperdine Private Capital Markets Project.

One fact from the report that could be overlooked is that only a mere 8% of advisors expect the current climate to last for 48 months or more.  Additionally, only 9% believe that the current climate will last between 24 to 48 months.  Perhaps most striking of all is the fact that 60% of advisors feel that the current climate will end within the next two years.

Business owners who are considering selling should be advised that almost two-thirds of advisors now feel that there will be a significant shift in the next two years.  Considering that it can take a year or more to sell a business, business owners would be wise to consider this important fact.

The report sites Neal Isaacs, Owner of VR Business Brokers of the Triangle who states, “Deals are taking longer in due diligence as buyers work hard to validate their investment and make sure that what they’re buying is worth the premium price today’s sellers are commanding.”

So, is now the time to sell?  Many experts feel that it is possible to lose a sizable amount of value if one waits too long to sell.  Even just a few months can make a huge difference in terms of perceived value and the ultimate sales price.  Working with a professional is a key way to ensure that you are selling at the right time and secure the best possible price.
​
Copyright: Business Brokerage Press, Inc.

Excerpt from 'Moving Forward'

Over the last couple of years you've kicked some tires, read a few articles or books, spoke to a few friends and maybe some professionals with experience in selling businesses. Then you put it all on hold because selling your business was never a serious consideration. After all you were still young.

If you read the business press today, it is shocking the number of Boomer Aged Business Owners with no real plan to sell their business. In Canada it's estimated there are 550,000 Boomer Aged Business Owners.

1. Over 75% of you plan to sell within the next 10 years. That's a lot of competition.
2. Less than 10% of you have a team, formal exit or succession plan in place.
3. Over 82% expect the sale of your business to fund your retirement. That's a lot of pressure.

As I said earlier, over the years I've worked directly with hundreds of owners of small and medium-sized businesses, like yourself. And spoken with many more. It is disturbing to realize the number of entrepreneurs who don't have a real exit strategy in place. There is no thought out plan to sell or transition your business.

In addition there are a huge amount of business Owners willing to let your businesses go for well under what you could sell for. Mainly because you don't want to do the work to prepare the company for sale.

Or you've chosen to ride it out for a few more years, taking as much cash out of the business as you can and then plan to just close the doors with little or no thought for the negative impact on
employees, vendors and customers. Let's not forget our economy which is not even close to being ready to absorb the impact of hundreds of thousands of Owners shutting down over a concentrated period of time.

The other option being considered by Owners is to 'die with your boots on'. These are the Owners planning to work until you drop. A plan based on loving what you do, working is an economic necessity or you simply don't know what else to do with your time. Or whatever story you want to tell yourself.

In many cases, initially, you're taking business selling advice from your current lawyers and accountants. Which is great if the trusted advisers have experience buying and selling companies. Not so good if they don't.

You are letting your baby go for 2, 3 or 4 x EBITDA* based on a volume of sales well below what it could be. Increased sales, a reshuffling of people, improved marketing, better operations and financial controls could all help to increase EBITDA* and therefore garner a sale price 6+ X. Especially when your annual sales break the magic $10,000,000 level. You could sell for far more than you have ever imagined was possible. It just requires some preparation.

*Commonly abbreviated as EBITDA, an accounting measure to calculate a company's net Earnings, Before Interest expenses, Taxes, Depreciation and Amortization are subtracted. Used as a proxy for a company's current operating profitability.

You could wait a few years and receive much more for your business. Anything done to increase the value of the business will help to make the company more desirable to a Buyer and valuable to you the Owner.

For years you considered improvements to your marketing, operations, finance and sales departments. Thought about enhancing technology, or even replacing staff. But you never followed thru.

Every SMB I've ever visited always included the obligatory tour. The Owner inevitably introduced his staff as: This is Jeff our Marketing Manager but he's not really a marketing person more a sales guy. Meet Susie our Controller, but she's really only qualified as a bookkeeper. Jan who doesn't get along with anyone but I keep her anyway. And my children who couldn't get a job elsewhere so they work here, etc.

Always one step below what they should be. No not the whole staff or you wouldn't have a thriving business. Just a few key players who help to keep you back or cause some frustration. Well now you may want to reconsider. The new Owner will be assessing your people and your judgement in people. They will be spotted and quickly. It will be held against you.

There are good ideas not acted on because they were an unnecessary expense or it was so much work you just didn't bother.

If you have an established business, consider returning to why you got into the business in the first place. Get in touch with what you were passionate about and determine how to get back to doing the things that you can’t wait to do each day.
​
There is no shortage of experienced folks to perform the functions you are not comfortable with or even qualified to do. Stop doing the stuff you hate and spend more time working on the business not in the business.​

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 eric@warrenbdc.com

Cheers, Eric
​

Stats on the state of the boomer business owner world, from the 'State of Owner Readiness' survey 2016.

1.   Boomers own 63% of private businesses.
2.   80-90% of their wealth is tied up in their business.
3.   76% plan to transition over the next 10 years. 48% in the next 5 years.
4.   12 months after selling 75% of owners 'profoundly regretted' the decision.
       (Want to know how to avoid the whole regret part?)

Have I got your interest?
 
5.   70-80% of businesses put on the market don't sell.
6.   Less than 30% of family-owned businesses survive into the second generation.
7.   67% of boomer owners are between 50 and 69 years old.

Stop for a minute and take it in. Now continue.
 
8.   75% have an annual revenue of under $5 million.
9.   85% of family owned businesses are first generation.
10. 24% say you're familiar with transition options. 44% aren't and 32% are not sure.
11. 88% have NOT established a formal transition team.

Sounding familiar?
 
12. 86% have no formal education related to transitioning your business.
13. 67% have no provisions in place if key personnel get ill or die.
14. 50% have no thoughts about your post transition life after the business.

Wow that was a mouthful. Take another minute and let it sink in.
I will guarantee you one thing. You don't know what you don't know. And that will absolutely lead to a whole lot of trouble. The challenge is who do you talk to?

Here is just one example of the misguided thinking many boomers are doing.

You think if you keep the company for a few years longer and take as much as you can out it will more than make up for what you think you could sell for today. Then, in a few years, you'll sell for whatever you can get or just close down. 

Nice plan, unfortunately, putting off selling or even just getting the company ready for transition or 'dying with your boots on' are not really exit strategies, now are they? 

What if, in the meantime, you get ill or worse? The mess you'll leave behind for family, partners, management, employees, customers and vendors will ensure they talk about you for a long time to come.

It's not all doom and gloom. There is a silver lining.

What if you could delay selling, keep taking money out, increase the value of the company and sell for more later. More than you think you could get now. 

Have your cake and eat it too. Hmm, that is worth looking into.

As a successful business owner, you're smart enough to at least consider all the other options available to you. But where do you go to find out about them? 

Excerpt from 'Moving Forward' Eric's book.

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At WarrenBDC, we may have some of the answers you're looking for.

If you want to speak with me right now, that's great. If you need to know more about us first, simply take a few minutes to look at our website www.warrenbdc.com. Get to know us a bit better and then call or email. Whatever works best for you.

Do it on your own schedule and if anything twigs for you ... feel free to give me a call at 416-270-2466 or email eric@warrenbdc.com.

Thank you for opening and reading my emails. I work hard at providing information and insights I believe are of value to you.

Cheers, Eric

Whether you want to accept it or not, change is coming. The average age of a seasoned business owner is 68. Of all established businesses in Canada and the United States, 65% are owned by these same seasoned owners. That means most founders of family businesses are facing the inevitable decisions they have put off for the last few years.

You can't wait it out or drive it away. Likely your kids will not be taking over. You may or may not require the funds from the sale of your business to finance your retirement today.  But who knows what the future has in store for you.

As I've said many times to my readers and audiences, you need to start now, making the decisions necessary for a great transition. If you don't, it may be made for you. Health issues, yours or someone close to you, can pop up unexpectedly. The marketplace may dictate what happens to your business. Competition to sell may be greater than you anticipated. The appeal of or desire to purchase your company may be less than you thought. 

And finally, statistically, selling successfully is not in your favour. Four out of five businesses that go to market DO NOT SELL. So it appears it may be time to take this whole transition thing seriously. 

Eric Gilboord
​CEO, WarrenBDC

As I get older, the thought of what happens after an Owner transitions out of the family business seems to occupy more of my thinking. I question what kind of statement they might leave to future generations by the actions taken while building the company and toward the end of their time running the family business. I've written two very different scenarios from the perspective of how a Family Business Owner might be perceived by future generations of family.

Legacy A - Something to be proud of.
Our parent/grandparent (your name here) was a successful business owner. They grew a tremendous business from nothing. All the while making sure family, staff, customers and suppliers were always well taken care of. 

We all have fond memories of many experiences enjoyed with our parents/grandparents from holiday dinners to weekends at the cottage and incredible vacations to exotic destinations. They always made sure to be with us and to participate. Work was second to family.

Charity and good deeds were part of the fabric of the company and his/her life. Integrity was a basis for all negotiations, encounters and relationships. Working their way with internal and external resources are still referred to as the benchmark for how it is done best.

They planned ahead and when it was time to transition the company, all was in order. People and processes were in place. Accounting was thorough and up to date. Contracts in place. Strategies for the future growth of the business were established and being executed. 

Regardless of who the company transitioned to, family (with or without their direct involvement), outside buyer or staff, the ship was well equipped and moving in the right direction. By the time the transition began, key management were trained and already excelling at their new responsibilities. It was a smooth and mostly stress free experience. In a business transition there will always be something to upset someone.

As descendants, we are lucky to have the choices we do today. We are financially set and equipped to follow in his/her footsteps in business and in life. To live life to its fullest, give generously and appreciate our good fortune every day. We are the proud stewards of his/her legacy, and continue to live by their example.

Legacy B - Not sure you'd be proud of this.
Our parent/grandparent (your name here) was a successful business Owner. Loving what they did and 'dying with their boots on'. They couldn't see themselves living any other way and never took the steps necessary to transition the company properly. We talked to him/her about it all the time and nothing ever happened. Everything would be taken care of tomorrow.

As for memories, he/she was always working. Never had the time to take holidays. Family time was had grudgingly. Excuses were made by us as they loved what they did. Real memories of time spent with him/her are few and far between. They could have easily spent a week here and there with us but didn't. Now it's too late.

While we admire the passion, the series of events that happened after his/her sudden and unprepared for passing have devastated our family. Legal and financial frustrations tore our family apart.

The company revolved around him/her and no one was really trained to take over. Not family or other. The business started to falter the minute word got out that he/she 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 could step up. The dream that the children would take over was a non starter as some of us were not interested and the others not qualified.

Competitors and Buyers began to circle the company like sharks smelling blood. Our surviving parent/grandparent 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 immediately let go. 

The cash received was nowhere near what our parent/grandparent had assured the surviving spouse would have to live on. Fortunately our family rallied and are taking care of him/her as family should. But it has been an unbelievable strain on everyone. It could have been avoided.

As for future generations sharing in the success of our 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 parent/grandparent.

Remember, as the Owner of a Family Business, it's up to you to write the story.

You've been reading my emails for a few years now. Perhaps it's time we talked.

Free Transition Strategy Session, For You and the Business 
www.warrenbdc.com

A favour if you would.

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Cheers, Eric
7 Figure Businesses Deserve 
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