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. Some Owners say it 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 back burner. 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 talk. 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 or visit our online program www.SellYourBusiness4More.com 

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

Seriously, 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

I've worked with more than a few family businesses where blood is thicker than contribution. Tends to typically lead to a somewhat depressed staff atmosphere and lower sales/profits. 

My position with Owners is if you really want to maximize the sale of your business, admit what you know to be true and let the family member go. Or change their position. 

They know better than you do how much damage is being done to the organization by their actions or lack of action. You may be surprised when your child or sibling or other relative actually thanks you for ending their misery.

Staff will be relieved and productivity will likely rise.

A2E

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

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

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.

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

We didn't start out to become family therapists. It just happened. If you're the Owner of a family business perhaps you can relate to this week's message.

Working with family business owners is fun, challenging and very rewarding for us. Their business and personal lives are intertwined. More interesting is when you add in partners (and their families) who also own and run the company. Another layer of complication. Blood family or work family they typically interact very much the same. They are family and that means holidays and special occasions together, personal conversations and typically some fighting. Sometimes resolved and sometimes not.
 
If they are fortunate, respectful of each other and work hard at it the experience can be quite wonderful. If not it can get messy. As with any family dynamic everyone has their role and typically home actions are seldom different from work actions.

To keep the peace, you've learned to accept and deal with their peculiarities, their specific needs and the lack of change - no matter how hard you try to accommodate them. People don't change and hoping they will is a common theme in family businesses. Sometimes it only affects the family. Often the behaviour can reach into the success of the company and have a very real negative impact on non family/owner staff.

At some point you will determine that it's time to deal with the idea of transition. This is where we come in. If you think what I've written so far is even close to the truth wait until you start the transition process. The opportunity for challenges multiplies exponentially. Issues and ideas that have been tabled in the past, now need to be dealt with. Ambitions come out and the jockeying for position heightens.

Family therapy is only one part of the process, but it can be as key to your success as cash flow, sales & marketing, human resources and production. You will be riding two sides of the same sword, family and business.

You may think you have the family side handled until the serious conversation starts  about the business. Who will run what, who gets what and about a thousand other things you never thought you would be dealing with. This is why we take on the role of a 'family therapist' as well as a Transition Advisor. 

To address the many family and business issues that can come up, we make sure our Growth Strategists have family business experience to complement their business building background. In our process, both sides are covered and one without the other is not advised.  Remember it's a 'family business'.

This is a great article on necessary steps to a great sale of your business. Basically you need to consider the sale of your business as the single most important client you will seek out and close.
Eric Gilboord, A2E

7 Essentials to Sell Your Company at a Premium
by Robert Sher as seen on Forbes.com 

All too many mid-market CEOs sell their companies for far less than what they’d hoped for because they hadn’t prepared for the “exit day.” In my research and experience, I’ve found seven strategies to be essential for executives who some day want to cash in on all the hard work and risks they took.

Ever thought about what you would do when running the business day to day was no longer your responsibility?

To get your Sellability Score Report and find out what your company could be worth click here.

Forget about selling your business and focus on increasing the value. If you do it right, the buyers will come to you.

It's a crowded market and lots of business owners would like to sell. Some started early and many have waited too long. No one can predict how long it will take to sell your company. You can try selling it as is or increasing the value first. With more value you're in a much stronger position to attract buyers and negotiate a better deal. 

Finding buyers for a business can be more time consuming and often more difficult than you might think. Much like selling a house or a car you can fix it up just before you sell or do it in advance and enjoy the benefits as you go. 

You may have some nibbles but likely one real shot at selling the business. If you do it right that's all you need. 

9 Tips for Selling Successfully and Exiting Well

1. Not sure what to do, don't have a qualified team or just too tired. Engage experts in Operations, Finance, Sales & Marketing, Human Resources and Legal. Make sure they understand what is needed to sell a business.
2. Stop working in the business and start working on the business. Pull away from the day to day responsibilities and spend quality time looking at the present and future of your industry and your business.
3. Get back in touch with why you loved building this company. Re-energize yourself and enjoy the selling journey. You won't feel as pressured and wind up taking the wrong deal.
4. Recognize the imperfections and do something about them. People, systems, finance etc. Often it is the unwillingness of the owner to make the tough decisions that will be their downfall. If it walks like a duck and talks like a duck it won't fix itself, or it would have already. 
5. Get your sales and marketing updated and aligned. Make sure they're working in an integrated effort. Ideally this should happen before you start the selling process but good sales and marketing are always welcome. 
6. It's not just about great sales numbers. Great operations and strong financial controls deliver profitability and desirability as well. 
7. Add at least 4 years on to your exit strategy. Count on 1 year to do the deal and 3 more to ease your way out. The new owners will likely require your participation to provide experience, industry introductions, continuity with staff, vendors, and customers.
8. Not sure if you really want to sell? Run improvement efforts parallel to selling, as you don't know how long it will take and you just may change your mind.
9. Attend our next workshop. We'll discuss all of the above and more at our half day event on 'identifying weaknesses and increasing the value' of your company. The cost is $250 and includes a full report on what your company could be worth in it's current state or with improvements. This is a private by invitation only event for owners of established businesses with annual sales in excess of $2,000,000.

If any part of this post speaks to you or to someone you know please feel free to email my Assistant Cheryl cscoffield@warrenbdc.com. Schedule a telephone call with me or we can talk in person over a cup of coffee and figure out your next move.

Eric Gilboord

#sellmybusiness #growmybusiness

Sell Your Business On Your Terms
When it comes to selling your business you have 2 choices. Sell it as is or fix it up and put yourself in a much stronger position to negotiate a better deal. Remember it's not just about the money, often the terms on which you agree are equally as important.   

Finding buyers for a business can be more time consuming and often more difficult than you think. Much like selling a house or a car you can fix it up just before you sell or do it in advance and enjoy the benefits for a while. You don't know how long it will take to sell. Count on selling being more difficult, more time consuming and more expensive.

Like many things in life it comes down to doing the work, identifying the weaknesses, making the changes and improving the value. Be careful, you might just improve your company to the point where it makes a better business decision to keep it.

 5 Tips for Selling On Your Terms

1. Not sure what to do or too tired and not really prepared to do the work. Find suppliers qualified to help you. Engage experts in sales, marketing, finance, operations, human resources and legal.   
2. Stop working in the business and start working on the business. Pull away from the day to day responsibilities and spend quality time looking at your industry and your business. 
3. Recognize the imperfections and do something about them. People, systems, finance etc. Often it is the unwillingness of the owner to make the tough decisions that will be their downfall. If it walks like a duck and talks like a duck it won't fix it itself, or it would have.   
4. Get your sales and marketing updated and aligned, making sure they are working in an integrated effort. Ideally this should happen before you start the selling process but good sales and marketing are always welcome. It's not just about a business with great sales numbers, but profitability and desirability as well.    
5. Not sure if you really want to sell? Run improvement efforts parallel to selling, as you don't know how long it will take and you just may change your mind. 

Eric Gilboord A2E
CEO WarrenBDC

Looking At Your Customers, Through An Angel Investors’ Eyes
by Eric Gilboord

Angel Investors often invest money and time. As a business owner you’re investing your time, resources and money in acquiring or keeping customers. The wrong customer can be costly and disruptive to your company. Your customer base is like an investors’ portfolio. Smart Angels review their investments to adjust for performance and economic changes. Wise business owners do the same with their customer base.

Typically 20% of the customers contribute 80% of your income. An experienced Angel may invest in 10 companies hoping to score a hit with one or two. It may be time to review your customer list and fire the bottom 10% as an investor might do while cutting their losing investments. Then focus your resources on finding better customers with larger opportunities. Or simply spend more time on some of the good customers you already have.

Finding good customers and keeping them is hard enough without spending a disproportionate amount of your time and resources on generating more new ones. Before you accept a new customer, consider using the indicators below to determine whether or not they are a good fit for your company. Various criteria may be utilized. Here are 7 to get you started.

7 Things to Consider About Current or New Customers

1. Do they have the ability to pay for your services? 
2. Have they used a service like yours before and was it successful? What went wrong?
3. Are their sales up or down? Do you want to be part of a winning or losing situation? 
4. Are their employees happy or biding their time waiting for the doors to close?
5. What is their reputation with customers and competitors? Are they forward thinking or out of pace with their industry?
6. Do they have a plan to grow? This includes Business, Sales and Marketing plans. 
7. Do they have complete management and worker teams or are there holes? Is that trouble or an opportunity for you as a supplier?