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Revisit the Back Burner

9/26/2024

As a business Owner, we have all accumulated new or crazy ideas that have not been implemented. Some came from customer requests, an offhand conversation with an employee or supplier, middle of the night brainstorms and strategic planning sessions you only partially executed.

We all have them, just never could find the time to do anything about them. Tried once, had some success but you weren't comfortable with the amount of work required to fully exploit the idea. So you just left it on the back burner to simmer or worse, get cold.

I guarantee if there was an idea generated and not acted upon, it wouldn't take long to quickly determine if it could have a life. You want to know if there is an ember of possibility or not. Blow on the ember and massive flames can grow out of it. If the idea proves to not be viable then use it as a starting point. One idea typically begets another and another etc.

Are you sitting on other unexploited sales, money left on the table? An opportunity to take your tired business in a different direction. You could be sitting on a pot of gold. And if you aren't prepared to take the idea to the next step, then pretty it up and use it to sweeten the deal for a prospective Buyer.

Once you dust them off, be careful as you may now want to move forward on some of the ideas and put the sale of your company or the launch of something else on the back burner. My suggestion is to run on parallel paths. Continue preparing for the sale as you never know when the right Buyer will come along or you no longer have the choice about selling.

Prepare the list, do the best you can and consider handing over the list to the new Buyer. No one will pay you for opportunity they have to execute on. However sweetening the deal is always nice. Or tie the new idea into an opportunity you could run with at a later time. Post transition.

This is a team sport so get your staff, vendors and customers involved. Remember confidentiality is key. So be careful and selective who you let in on the process and don't tell anyone everything. Until the time is right.

Exercise - Task Create An Opportunity List

1. New Product Ideas

2. New Service Ideas

3. Existing Product Improvements

4. Existing Service Improvements

5. Customer Relationship New Ideas

6. Potential Joint Venture Opportunities

7. New Equipment Purchases

8. Existing Equipment Modifications

9. Brainstorm new ideas with select staff, vendors and customers.

Lesson from my 'Sell Your Business 4 More' system.

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10 Things Holding You Back From Selling Your Business

9/17/2024

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Several factors can stop a business owner from properly preparing their company for sale. Some of the common obstacles include:

1. Emotional Attachment
Many business owners have built their companies over years, sometimes decades, and have a deep emotional connection. The idea of selling can feel like losing part of their identity, which may cause hesitation or delay in the process of preparing the business for sale.

2. Lack of Time or Focus
Business owners are often consumed by the day-to-day operations of the company. This makes it difficult to step back and focus on long-term strategies like preparing the business for sale, as it requires dedicated time and attention.

3. Unclear Exit Strategy
Some owners don't have a clear exit strategy or don’t know when and how to begin preparing for the sale. Without a defined plan, they may procrastinate or be unsure about the steps needed to get their business in the best possible shape for selling.

4. Overestimating Business Value
Owners often overestimate the value of their business and assume it can be sold at a high price without taking the necessary steps to optimize its value. This can lead to disappointment or an unwillingness to prepare when they realize the gap between their expectations and market reality.

5. Fear of Losing Control
Preparing a business for sale often means making changes that can shift how the company operates, such as delegating responsibilities, hiring new management, or restructuring operations. Some owners fear losing control during this process, especially if they’ve been deeply involved in every aspect of the business.

6. Inadequate Financial Records
Many small businesses don’t keep up-to-date or accurate financial records, which are crucial for potential buyers. Without organized financials, the process of valuing and selling the business becomes much more difficult, and owners may avoid dealing with this issue.

7. Economic or Market Conditions
Unfavorable economic conditions or market uncertainty may discourage business owners from preparing for a sale, as they may believe they won’t get a fair price or there may be fewer interested buyers.

8. Not Knowing Where to Start
The process of preparing a business for sale can seem overwhelming. Business owners may not know the first steps to take—whether it’s financial planning, operational changes, or seeking legal advice—which leads to inaction.

9. Unresolved Legal or Operational Issues
If the business has outstanding legal issues, pending lawsuits, or operational inefficiencies, owners may hesitate to prepare for a sale until these problems are addressed, but they often delay tackling these challenges.

10. Fear of Post-Sale Future
Many business owners don’t have a clear vision of what they will do after selling the business, leading to anxiety about the future. This fear of the unknown can prevent them from taking steps toward selling.

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EBITDA Explained To A 12 Year Old

9/13/2024

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I asked an AI to explain EBITDA to me as if I were 12 years old. Here is what I got.

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization.

Let’s break that down in simple terms:
Imagine you run a lemonade stand. At the end of the day, you want to know how much money you really made from just selling lemonade, without worrying about other things like loans, taxes, or buying new equipment.

Earnings: This is the money you make from selling lemonade.

Before Interest: If you borrowed money to start your stand, you might have to pay back some of it. Interest is the extra money you pay for borrowing, but we don’t include that yet.

Taxes: The government might take a bit of your money as tax, but we won’t count that for now.

Depreciation: If your lemonade stand gets old and worn out, it loses value over time. We won’t think about that now either.

Amortization: If you bought something expensive for your stand, like a fancy juicer, you pay for it slowly over time. We’ll ignore that for now too.

So, EBITDA tells you how much money your lemonade stand really makes from selling lemonade before thinking about all these other expenses. It’s a way to see how the business is doing, just based on sales and day-to-day costs.

EBITDA is a way companies measure how much money they make before they have to pay certain things, like interest, taxes, and other expenses.

Imagine you run a lemonade stand. You make $100 selling lemonade, but before you can keep that $100, you have to pay for lemons, sugar, cups, and also pay a bit to the bank for borrowing money to buy supplies.

EBITDA is like saying, "Let’s first look at how much money the lemonade stand made without worrying about all those extra costs like borrowing money or paying taxes."

So, it’s a measure of how much the business is earning just from selling lemonade. It helps people see how well the business is doing, even before paying off other things.

Adjusted EBITDA is like taking the normal EBITDA (the money a business makes from just running) and then making a few extra changes to it.

Let’s go back to the lemonade stand. Imagine one summer, you have to pay for something unusual, like fixing a broken lemonade machine, or maybe you had to throw a big party to attract customers. These are costs that don’t happen all the time, so they aren’t part of the normal business.

Adjusted EBITDA is like saying, “Let’s ignore these one-time costs (like fixing the machine or the party) because they aren’t regular. This way, we can focus on how well the lemonade stand is doing during normal times.”

It helps people see how much money a business usually makes without being affected by rare or unusual expenses.

Normalized EBITDA is like making sure we see the true, normal earnings of a business by removing anything that doesn’t happen regularly.

Imagine your lemonade stand again. Some summers, you might have unusual things happen, like a huge lemonade festival where you make a ton of money, or maybe a super rainy summer where you don’t sell much. These things aren’t normal every year.

Normalized EBITDA takes your regular EBITDA and says, “Let’s adjust it so it shows what we usually make, without the big festival boost or the bad rainy season.” It smooths out those ups and downs to give a clear picture of what your lemonade stand makes in a typical summer, not counting special events or bad luck.

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5 Trends In Buying and Selling Businesses (extended ver.)

9/13/2024

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In today’s ever changing business landscape, buying and selling small and mid-sized companies has become more fluid, creatively constructed and opportunistic than ever before. As someone who regularly interacts with both business owners and prospective buyers, I’ve identified some key trends that are shaping the current market. These trends reflect shifts in both seller and buyer behavior, pointing to a more flexible and strategic approach to business transitions. Below are five key trends currently influencing the process of buying and selling businesses.

1. Owners Are Starting the Selling Process at a Younger Age
One of the most noticeable trends in the marketplace is that business owners are beginning to plan their exits earlier than in the past. Traditionally, business owners might wait until their late 50s, 60s and even 70s before seriously considering selling their company. Today, however, many are starting the selling process in their late 40s or early 50s. This shift is largely driven by a desire to ensure a smooth transition, enjoy a second or third career as well as by personal financial planning considerations.

For these owners, getting a head start allows them to build a more robust exit strategy, which often includes grooming their business for a bigger sale price, identifying key successors, and even preparing emotionally for the transition. The fact is, selling a business is a monumental task, and it’s rarely just about finding the right buyer. There are operational, legal, and financial preparations that take time, and starting earlier provides owners with the opportunity to maximize the value of their business. By taking a proactive approach, these sellers are more likely to enjoy a successful and lucrative sale that secures their financial future.

Additionally, starting the process earlier allows owners to consider personal goals that extend beyond the sale. Whether it's a lifestyle change, a new venture, or even retirement, knowing that they have the freedom to make those decisions once the sale is complete gives owners a stronger sense of control over their future.

2. Increased Focus on Boosting Business Value Before Selling
Another trend that stands out is the growing number of business owners who are actively working to increase the value of their business before putting it on the market. This trend is driven by the realization that increasing EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) can lead to significantly higher sale prices. For instance, adding $100,000 to a company’s EBITDA could potentially increase the sale price by as much as half a million dollars. This kind of value enhancement can be life-changing for owners who are looking to secure their financial future.

Younger business owners are more willing to invest in their company’s infrastructure, optimize processes, and improve their market position to attract higher offers. From streamlining operations to cutting unnecessary costs, owners are making smarter decisions that yield higher profit margins and, ultimately, better sale outcomes.

Value-add initiatives may include expanding into new markets, enhancing customer retention programs, or upgrading technology systems to make the business more appealing to potential buyers. Additionally, many owners are focusing on reducing their company’s dependence on them personally, ensuring that the business can run smoothly without their direct involvement. This makes the company more attractive to buyers who may be looking for a turn-key operation.

Overall, there’s a growing awareness that the effort put into enhancing business value before selling can provide exponentially higher returns, making this a significant trend in today’s business sales market.

3. Owners Feeling Fatigued by Market Uncertainty and Operational Challenges
While some business owners are excited about growing their business before selling, others are becoming increasingly tired and frustrated with the challenges of running a company in today’s uncertain environment. From labor shortages to unpredictable government regulations, many business owners feel that the operational landscape has become too difficult to navigate. This fatigue is prompting more owners to sell earlier than they might have initially planned.

Finding and retaining staff, for instance, has become an ongoing struggle for many businesses, particularly in industries that rely heavily on labor. With the rise of automation and digital disruption, many traditional industries are facing new competition and an increased need for skilled workers. However, the labor pool is shrinking, and many qualified candidates are looking for more flexible working arrangements or higher wages, leaving small and mid-sized business owners scrambling to fill key roles.

In addition to staffing challenges, government regulations and policies have become more unpredictable. Changes in tax policies, healthcare regulations, and labor laws can all have a significant impact on a business’s bottom line, and many owners feel that the uncertainty is too great. Rather than waiting to see how things will play out, some owners are deciding that now is the right time to sell.
This sense of fatigue and frustration has become a key driver in the decision to sell, particularly for those who feel that the challenges of running a business no longer align with their long-term goals.

4. Buyers Are Holding for the Long Term and Expanding Aggressively
On the flip side, buyers are not just purchasing businesses for quick turnarounds; they are increasingly buying with a long-term view in mind. Many buyers today see acquisitions as part of a broader growth strategy, and they are taking an aggressive approach to expanding the businesses they acquire. Whether through geographic expansion, diversification of product offerings, or new marketing strategies, buyers are positioning themselves for sustainable growth.

Interestingly, this long-term view often includes keeping the previous owner on board in a consulting capacity. In some cases, owners are staying involved with their former companies for several years after the sale, offering guidance, sharing institutional knowledge, and ensuring a smooth transition for both the new owners and the employees. This allows the buyer to benefit from the seller’s expertise while pursuing growth opportunities, creating a win-win situation for both parties.

Moreover, buyers are looking beyond short-term profits. They’re focused on building value over time, often leveraging their own networks and resources to scale their acquisitions. As a result, many of these acquired companies see significant growth post-sale, which benefits both the buyer and, in some cases, the seller who might have an equity stake in the new venture.

5. Post-Sale, Many Sellers Are Returning to the Market to Buy Smaller Businesses
Finally, a growing trend among sellers is the desire to return to the market after a break. After the sale of their company, many business owners find themselves ready to re-enter the business world, but this time with a new perspective. Rather than building one large company, they are focusing on acquiring smaller businesses and building a portfolio of companies as part of their long-term investment strategy.

These former sellers have the advantage of experience, capital, and a clear understanding of what it takes to succeed in business. They often look for smaller, underperforming businesses with potential for growth, acquiring them at lower prices and using their expertise to turn them around.

In many cases, this strategy allows former business owners to enjoy the best of both worlds: the freedom and flexibility that come with semi-retirement, while still remaining engaged in the business world. It also offers a way to diversify their income streams and reduce the risks associated with having all of their wealth tied to one business.

Conclusion
The world of buying and selling businesses is evolving rapidly, and these five trends are a testament to that shift. Business owners are becoming more strategic about when and how they sell, while buyers are taking a long-term approach to growing their acquisitions. Meanwhile, the challenges of running a business in today’s uncertain environment are pushing some owners to exit sooner, and many of them are coming back to the market in new ways, ready to build portfolios of smaller companies. These trends will likely continue to shape the landscape of business transactions in the years to come, creating new opportunities for both buyers and sellers alike.

If you'd like to discuss these trends, talk about selling your company or buying a business please book an appointment with me here.
calendly.com/ericgilboord

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8 Keys to Growing Your Business Now and in the Future

9/11/2024

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Whether you're a start-up or an established business. Sales and Marketing goes well beyond sales calls, social media, advertising, websites and brochures. Owners need to understand the short and long term benefits of the intangibles required to grow their business.

8 Keys to Growing Your Business Now and in the Future

1. Customers' Needs. A clear understanding of your customers' needs and a strong commitment to satisfy them should be at the heart of your marketing program. You do not have a business without customers. The survival and growth of your business will come from providing great customer service. Happy customers will be loyal and bring you new customers.

2. Competition. Many businesses are aware of their competitors but do not possess intimate knowledge of them. If you know what things they are doing right and what things they may be doing wrong, you can learn from their experiences and apply the good to your organization and avoid the bad. Understanding your competitors will often give you the opportunity to anticipate how they may respond to your tactics. You can then anticipate their marketing activities and be prepared.

3. True Value Of An Opportunity. Look under the surface. Not every opportunity is as it may seem. You need a strategy to assess new opportunities and to allow yourself the choice to walk away from what could be a damaging experience to your company. If it looks too good to be true, it probably is.

4. Times Are Changing. This is a time of rapid and constant change. Traditional ways of thinking will either produce traditional results or prove to be fatal in this non-traditional business climate.

5. Get Progressive. Think about your marketing in an aggressive manner. Break away from the old reliable ways and begin new traditions. If you apply new thinking to new problems and new opportunities, you will see new results. New traditions will have much shorter life spans and will be quickly replaced by more new ideas. Thinking about your business is much like hitting a moving target.

6. Know What You Don't Know. The awareness that there are many things you do not know is also important to the constant updating of information on customers, competitors, and the industry you are in. A wise business owner knows what he or she doesn't know, employs a strategy, and finds the answers.

7. Develop New Business. Business owners would like to believe that customers will just come to them, but this is not the reality. New business development is just as important to a marketing program as satisfying existing customers. If you wish to grow your business or even to keep it at a certain level (customers can leave for various reasons and you often do not have control over their decisions), you will need new customers. You will require a formal, well-thought-out new business development strategy.

8. Customer Contact. In order to meet the sometimes enormous challenge of monitoring and interacting with large numbers of customers and new prospects, you will need a contact management strategy. How you keep in touch with customers and the ease with which you or your staff are able to reach them will dramatically affect the level of customer service you can offer.

"Demonstrate, you know your business and a clear understanding of their needs." A2E

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4 Trends I've noticed lately in business selling.

9/4/2024

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In my business life, I'm fortunate to be able to speak with many business Owners and Buyers on a regular basis.

They call me to buy, sell, for advice or insights.

I've noticed 4 trends lately in the world of buying and selling small and mid-sized companies.

Owners are starting the selling process at a younger age. Typically in their late 40's and early 50's. Getting a good head start is key to their transition success.
More Owners are excited about increasing the value of their business before going to market to sell. Remember, add $100,000 to your EBITDA and you could sell for half a million dollars more. That can be life changing money.
Some Owners are getting tired of running their company and the uncertainty that surrounds them. Finding staff is a much bigger challenge. Government decisions and changes make no sense, if you want a small business to thrive or even stay alive.
Buyers are buying, holding for the long term and aggressively growing their acquisitions. This can often include an Owner staying around longer, if they want to, in a consulting capacity.

If you'd like to discuss these trends. Or if you've been meaning to call to discuss your sale or a purchase click here to schedule a call.

Cheers, Eric

#entrepreneur #businessfamily #familyoffice #smallbusiness #smallbusinessowner
#businessowners #sellmybusiness #sellmycompany #sellbusinesstoronto #sellbusinessontario #sellbusinesscanada

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Want to be on the same page as your ... spouse?

9/3/2024

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We're so busy running our business, often we don't make the time to find out if we're still on the same page as those closest to us.

Decisions we make today will absolutely impact our future and the lives of those nearest to us. Spouse, partner, family, and work family are all affected by the choices we make.

Let's start with our spouse or significant other. Usually when I ask a business owner if they know how their spouse would like to spend the next 5, 10 or 15 years they look at me like I'm nuts. Then there is that moment of realization and the answer becomes 'not really'.

So here is what I suggest. Tonight, crack open a bottle of wine. Then ask your spouse how they want to spend the next 15 years. This is not about you, so do not offer up your plans. The first part of the conversation is only about your spouse. Listen, listen and listen some more.

Once they're finished, then begin clarifying their ideas so you are clear. Now add your own plans into the conversation and have a true two-way conversation.

You did it when you first became serious about each other. I'll bet it worked out better than you ever imagined. Yes of course you had/have challenges. But what a ride it is.

When the subject of the business comes up and it will, you'll both have many questions. The first question will likely be what is the value of the company?

You can guess or you could click here.

We're here to help you exit this ride, take a breather and get on the next one.

If you're contemplating the future of your business, we need to talk.

Book a call with me click here.

Eric Gilboord and
The WarrenBDC Team

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It's not ok to wait any longer.

9/2/2024

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It's not ok to wait any longer.

I've been speaking with dozens of boomer age business owners about selling or transitioning their company and the same story is told to me over and over again.

" I can't do anything just yet. The time isn't right. I know I have to do something."

The family members, and the many trusted advisors, owners tend to surround themselves with tell me this story.

"I don't know what to tell my Dad/Mom or Client. We talk about selling or transitioning the business but he/she/they keep putting it off. I wish I knew what to say or do."

Yes we all know you have a deep emotional attachment to the company you built. And yes 2008 was an unexpected blow. You've had 6 years to recover or not. It is unlikely the world will suddenly drop a 'selling gift' into your lap. So you have to reconcile dealing with the company and its' future now.

If you don't, the decision will be made for you. 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 business just so you could give up control.

The first thing you need to know is, business owners have inflated opinions on the value of their company. Sorry, but that's the cold hard truth.

In addition, 80% of your wealth is likely tied up in your single largest asset - the business. The biggest sale you will ever make will be the business itself. Tell the truth, are you really prepared?

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. After all, it will likely take 5 years from start to finish to be fully out of the business.

Right now you may not know exactly what you'll do after the business is sold. That's part of the journey. How about we agree that time with family, good health and a little holiday is a great place to start.

When you started or took over the company did you really have all the answers? I didn't think so.

The clock is ticking, whether you're ready or not. Take the first step into your future now, click here.

Cheers, Eric

PS I feel strongly about this because I know if our Owners wait too long, Canada may end up with more closed businesses than our economy can absorb.

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our Blog for Growing or
selling your business

Revisit the Back Burner

10 Things Holding You Back From Selling Your Business

EBITDA Explained To A 12 Year Old

5 Trends In Buying and Selling Businesses (extended ver.)

8 Keys to Growing Your Business Now and in the Future

4 Trends I've noticed lately in business selling.

Want to be on the same page as your ... spouse?

It's not ok to wait any longer.

Click Here

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our Blog for Growing or selling your business

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our Blog for Growing or
selling your business