Tag: Exit Strategy

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How to visualise your bountiful business exit

Visualise your bountiful business exit

Bountiful_Harvest_1440x1080Visualise your bountiful business exit, it’s worth it. Einstein considered imagination to be more important than intellect. Before doing an actual experiment, he would visualise the experiment in his mind, thinking about each and every detail and the whole sequence. As a result, he was prepared for the minor or major problems that he could encounter during the experiment. Establishing your business takes a lot of effort. It is only fair for you to consider a bountiful exit when selling your running business. However, like everything else, a business sale also requires a proper strategy. If you are well prepared, your business sale will conclude smoothly, with maximum returns for your hard work. The best way to be prepared for a business sale is to visualise successful business exit.

Visualising the Solicitor

A good advisor can make the difference between a successful or stalled business sale. Apart from looking at qualifications and experience, you should also visualise yourself to be working together with your solicitor —preparing a sales pitch, drafting a Memorandum, finalising Heads of Terms, and most importantly, negotiating. Try to imagine what working with your advisor will be like. This will help you in choosing the solicitor that you feel most comfortable working with.

The solicitor I chose was a word of mouth recommendation. When we first met, he spent quite some time with me outlining my options, explaining the process and cover potential costs. During our discussions I felt that he was genuine, straightforward and able to help me get what I wanted. As the sale process progressed I often visualised leaving my solicitors office with a big smile. And towards the end I pictured myself hugging my solicitor (and he’s not really the huggable type)! Looking back now, I remember the day clearly when I got up from the boardroom table, concluding the deal and wraping my arms around my solicitor. What a great day!

Visualising the Sales Pitch

The sale proposal is the first thing that you are going to need. It is also known as a Memorandum of Information. The memorandum should be prepared very professionally and should be a lucrative document for the buyers. It should emphasise the strengths of your business, and underplay the weaknesses. But, everything should be done artfully. You can improve the impact and quality of your  document by adding graphs, charts and other data that looks credible. Try visualising that you’re that the buyer rather than the seller. Think about the points that you, as a buyer, would like to see in the Memorandum. Your solicitor will also give you valuable advice, but it’s you who should be calling the shots rather than just towing the line that your solicitor gives you.

Visualising Meetings

You’ll be required to attend many meetings with the buyer’s team, during which you’ll be asked to explain different parts of your business. Before the pre-completion day, there may be a number of negotiation sessions to finalise the prices, payment terms, and other terms and conditions of the sale. Visualising each such meeting beforehand will make you better prepared to handle them.

Never show that you are desperate to sell your business. In fact, you should give the impression that there are other buyers also interested in buying your business. Remember that a delayed sale is usually a declined sale; therefore, you must do everything to speed up the sale process. Do not be available for meetings too readily. It might make the buyer think that they are the only party interested in your company. Rather, schedule appointments for meetings and inquire about the agenda beforehand. Some companies launch a media campaign just before they send out a sale memorandum, so as to improve the image and the potential price of their business. Visualising a successful business exit is about visualising each one of the activities right until the pre-completion day point.

Visualising Negotiations

For negotiating the terms and the price, you should first sit together with your business sale team and your business broker. Brainstorm your priorities about the price, and know the limit to which you can show flexibility to. Identify the weaker aspects of your business and be ready to answer tough questions. Remember, that your buyer will focus on the weaknesses of your business in an effort to reduce the price. You should be prepared for the counterarguments. You can either focus on your strengths and show that they offset your weaknesses, or you can find ways to underplay your weaknesses and convince the buyer that the price that you are demanding is profitable for them. Visualise negotiations always ending on a positive note where both you and the buyer walk away satisfied.

Visualising Indemnities, Warranties and Representations

The most sensitive aspects of a business sale are the representations, warranties and indemnities that you provide in your documents. A representation is a statement about a certain fact or aspect of your business. By giving a representation, you are taking responsibility that the information that you are providing is true and authentic. Similarly, the warranties that you issue are assurances about some aspects or assets that they have been correctly stated. Any wrong information from your side for which you have provided a warranty, will put you in the breach of the sale agreement. Indemnities are also similar; however, while indemnifying your buyer, you are taking responsibility to compensate the losses that the buyer may suffer in case a particular term of the agreement is breached by you.

Before issuing indemnities, warranties or representations, you should visualise the ramifications of issuing these documents or including these clauses in the sale agreement. It is best to keep the warranties and indemnities to a minimum. And when you do have to issue them, make sure that they should not keep troubling you even after you have sold your business.

Finally, you can visualise having a vacation at your favourite destination after you have successfully exited from your business. Do this from the start!

If you’re approaching an imminent completion day, have a look at our  Completion Day Checklist. It’s provides everything you need to know and do for the big day.

Kim Brown, Co-Founder of Business Wand, helps business owners navigate their way through the start to finish process of selling a business. Her specialty is to help owners cut costs and increase profits prior to sale. To understand how you can sell your business quickly for the highest sales price, purchase the book, “How To Sell A Business: The #1 guide to maximising your company value and achieving a quick business sale”

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How to find the best broker to sell your business

How to find the best broker to sell your business


The best broker to sell your business

A lot of work goes into making a business successful. But nothing lasts forever, even if your business is something you love and watched grow from a tiny baby start up into a fully grown adult money making machine. There comes a time when you want to sell that business.

It may be that you want to work in another sector or want to retire. Whatever the reason you need to ensure the process runs as smoothly as possible and the most effective way of making sure this happens is by finding the right broker company.

Consider your Exit Strategy

A lot of people who run seminars or give talks on running a business will talk about having an “exit strategy.” This is when people decide when they want to leave a company and how they intend to do it. However people are only human and the odds are when you work every day on your business you may not have thought of the practical steps needed when you need to sell up with a vague “some time in the future” in your head.

The temptation then is that when you finally do decide enough is enough you may decide to go it alone. After all you’ve set it up and made money for yourself why can’t you sell it yourself?

The reason this approach is not as effective is quite simply the law of averages! If you try and sell a company on your own then it is likely you will only be able to deal with one potential buyer at a time. The danger of this is that if a deal falls through it can mean going back to square one all over again each time, adding further stress and work that you don’t need when someone else can handle it for you!

A broker can deal with a number of clients at once because…well it’s their job. Even if you are robot level efficient there’s only so many meetings you can go to. Depending on who you go with they can also assist on the marketing and finance side as well, all things that could potentially screw up a sale.

Hold A Talent Contest or Beauty Parade

All of these aspects need to be considered when comparing the various types of company broker available to you. In some respects it is like a talent contest and you are the judge- therefore it is up to you to ask the right questions!

The most important question of all is- can you give us references? They ought to be willing to give proof of any claim and be able to supply you with convincing evidence that they can do what they claim to do. Trust your instincts- if the reference seems dodgy, look elsewhere!

Another aspect is the valuation- if they offer a figure that is too high or low then it is best to avoid them. In both cases there is a danger that they have an ulterior motive so it is best to do a little detective work to see the facts behind the figures.

Also get them competing! Don’t be afraid to get ruthless – get a couple of quotes and then call them back saying what the other one offered.

(Note: In the Sell Your Business Store, we offer a beauty parade pack to help you ask the right questions to obtain the best broker, solicitor and financial people!)

The Small Print

ALWAYS READ THE SMALL PRINT!

The odds are they will have various fees that they charge for their work. Do not take what they say at face value.

Part of the problem is finding people you know are reliable, rather than hoping that the people you are contacting are real. Anyone can create an official looking website and anyone can dress up their service with fancy sounding jargon.

Business networking groups are ideal places to go for this- someone usually knows someone else and if they genuinely like the service they offer then they will tell you!

Stay in touch

Even the surest of deals can go down due to unnecessary delays. One of the most frustrating things is to find your perfect deal went wrong because someone didn’t check their email or didn’t respond quickly enough to a phone call.

If the broker is in your local area, pop into their office unannounced before you do the deal. See how they handle the day to day running of a business. Look at the way they arrange their desks, the way they talk with each other. If your business sense starts tingling the odds are something is amiss- in some respects it’s like courting and it is up to you to read the signals to see whether your potential broker is the perfect date or the perfect dud!

Checklist for choosing a broker

In short there are a few things to check over before you choose a broker-

  • Know your exit strategy
  • Set a time frame
  • Do your research
  • Is their approach appropriate for your business?
  • Can they offer assistance with marketing and financing?
  • Ask for testimonials
  • Ask about fees upfront
  • Is their valuation realistic?
  • Compare at least three different company brokers.
  • Ask around at local business networking groups.
  • Make sure they stay in touch with you and keep in contact during the selling process.

Another thing to remember is that there are no guarantees and no broker can promise you definite sales. But like any investment in your business doing your homework and comparing all your options will give you the best possible chance. While it may be hard waving goodbye to your grown up company you can do so knowing it’ll find a good home!

Joanna Miller helps business owners navigate their way through the start to finish process of selling a business.  Her specialty is helping owners understand how to prepare and make the most of their business sale process to maximise their company’s value. To understand how you can sell your business quickly for the highest sales price, purchase her book, “How To Sell A Business: The #1 guide to maximising your company value and achieving a quick business sale”

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Selling Your Business – Working On Your Business Not In It

Working On Your Business Not In It

Working On Your Business Not In ItWorking On Your Business Not In It.

Starting and growing a business in the UK is no small feat. In fact, if most business owners understood the difficulties beforehand, they’d probably never start! We employers go against the grain, carry on despite our family members saying, ‘Are you crazy?’ and we push, shove, and force our way down a bumpy path of growth. Things at first are a massive struggle but over time the profits start to come in and new employees lighten the load.

The whole journey of business creation and growth is amazing. There are times of elation – like landing the first big client and times of woe – like when the economy threatens to smoulder out the fire of success. There are ups and downs. Good ideas and bad. Successes and failures. But we business owners keep on keeping on because we’ve learned that through tenacity and hard work rewards will come.

The unfortunate thing is, however, in all our zest for world (or local) domination we often lose sight as to why we created our business and what we wanted from it. Furthermore, we fail to notice the signs that we’ve changed and want something different or something more.

For over six years I had my head down working, working and working. Even my dreams consisted of management reports, new marketing strategies and ways to crack my latest HR nightmare. I became so caught up in making the business a success that I didn’t even realise how successful it actually was. A sense of balance was long lost and I forgot why I was doing what I was doing.

Like many others out there, I created a successful business however I failed to create a successful life. Instead of working on the business I became an expert at working in the business. The larger we grew, the heavier my load felt. I kept doing what I had always been doing because I didn’t realise any other option. You don’t know what you don’t know.

Fortunately, my business partner enabled me to exit by purchasing my shares. I was too far gone to be salvaged. At the time I had decided that I had to get out and out I went. However, in hindsight I’ve realised quite a few things. We business owners don’t enter a business with our exit in mind. We don’t always carve out a business that supports a lifestyle that makes us happy. We work so hard to get things going that once they’re going we just keep working hard. Knowing what I know now, I can see that I kept doing the things I felt I had to do despite the fact that they made me insane. I didn’t have to carry on working in my business – I could have worked on my business.

Whether you’re fed up like I was and are selling your business or your simply tired of the same old grind, working on your business not in it will enable your journey to change for the better.

To pull yourself out of the day-to-day hum drum there are few quick things you can do to get started. Consider going on a business growth course, hiring a growth consultant/non-executive or join a networking group focused on top level strategy.

If you need a helping hand, send me an email letting me know what you’re after and I’ll give you the details of my recommendations.  Email me at: Kim@BusinessWand.com

Kim Brown, Co-Founder of Business Wand, helps business owners navigate their way through the start to finish process of selling a business.  Her specialty is to help owners cut costs and increase profits prior to sale. To understand how you can sell your business quickly for the highest sales price, purchase the book, “How To Sell A Business: The #1 guide to maximising your company value and achieving a quick business sale”