Building a business from the ground up is a challenging but incredibly rewarding endeavor, both financially and emotionally. However, knowing when and how to sell your business is an entirely different ball game. In his book “Step Off the Porch and Start Your Own Business,” Brian Collins offers valuable insights into the art of selling a business. Let’s explore the key lessons from his book on when and how to sell your business.
Timing is Crucial:
In many cases, the best time to sell your business is about six months before you and the world are fully prepared. This means selling before your staff and competitors catch wind of your intention to sell. Acting early may leave a few dollars on the table, but it ensures a smoother transition and allows you to kickstart the payment process. You can even structure the deal to receive payments over time, providing the buyer with the flexibility to meet your price. You can also incorporate safeguards such as interest penalties for missed payments or increased percentages for delayed payments.
Incentivize Key Staff:
During the transition period, it’s essential to offer incentives to key staff and management to secure their support for the new owner. This might include bonuses from the proceeds of the sale and commitments to help the new owners retain employees at their current or higher wages. These strategies are discussed in detail in Brian Collins’ book, drawing from his successful experiences selling three out of four businesses he started.
Determining Your Business’s Value:
Assessing the value of your business is crucial. To do this, consider the last two years’ net cash flow to the business (excluding your salary), list all assets at market value (even if depreciated), include any brand value, and factor in the “mystery value.” The mystery value accounts for the countless days and weeks of effort you put into building the business. Discuss this with potential buyers to highlight the value they gain by acquiring an existing business rather than starting from scratch. Do not take too long to arrive at a price you can live with, as the market may change during a lengthy process, and you could miss the opportunity and buyer interest.
Closing the Deal:
A successful sale occurs when both parties are satisfied. Don’t unnecessarily drag out the process. Be prepared to make concessions for a swift closing, even if payments are spread over time. If the initial price offered is lower than expected, negotiate a share of future sales once certain revenue targets are met. Read Brian Collins’ book available at 6step biz.com for further details. If you don’t ask to close the deal, you may not get the deal closed. Don’t be shy about asking for the close at 6stepboz.com.
Embrace Differences:
Understand that your vision and the new owner’s vision may differ. After selling, they will run the ship, and you will either be paid or provided with security to ensure payments. Flexibility is key to a smooth transition.
Master the Art of Selling:
Becoming a proficient salesperson is crucial during this process. Recognize the signs of buyer interest and their readiness to close the deal. Avoid overselling, as it can make you appear desperate. Brian Collins’ book provides valuable guidance on the timing and approach for selling your business.
Learn and Share:
As you complete the sale, you’ll gain invaluable knowledge about starting and selling ventures. Share these lessons with those around you. Brian Collins’ book, along with his website 6stepbiz.com, offers further insights and assistance, making the entire process accessible to others. He has started four different businesses, sold three of them so far; get started with Brian’s assistance today.
Conclusion
Brian Collins’ book, “Step Off the Porch and Start Your Own Business,” stands apart from the sea of self-help business literature by offering an edgy and honest account of entrepreneurial ventures. The 6 rules he presents at 6stepbiz.com for running a business provide a roadmap for entrepreneurs navigating the challenging terrain of business ownership. By absorbing Collins’ insights, you’ll be better equipped to make informed decisions that not only secure your financial future but also honor the legacy you’ve built. His book shows you the challenges you will encounter when getting started and how to overcome them. These challenges are common to all businesses, regardless of the type. Brian can help. Grab a copy of Brian Collins’ book today at Amazon!