SELL-EBRATE! Successfully Exit Your Business
At Vantage our passion is to celebrate one of the most overlooked jobs in the world, that of a business owner. If you are one and are just starting to entertain selling, listen to the Vantage podcast, "SELL-EBRATE! Successfully Exit Your Business". We give tips on selling your business and interview business owners about the challenges & successes they had selling. If you have a story and would like to be a guest visit us at TheVantageBrokers.com
SELL-EBRATE! Successfully Exit Your Business
What would you tell someone on the fence?
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Here's a great question an owner recently asked is what advice would I give to somebody who is on the fence. So this is an owner of a business, and you're thinking about selling, but you're not sure. So I would, you know, so much of what we do as brokers is the psychological aspect of the deal because um there's a lot of challenges, there's a lot of things to overcome, and it makes sense to have another party involved to communicate with what you're going through and what you're thinking through and how to make this decision from an objective perspective as possible. So if you're an owner and you're on the fence, there's gonna be, first of all, the the the personal side. So I always I always suggest to start there, and I want you to think about where you personally want to be in a year, in three years, five years, you know. Is this something that you want to do? Really, at the end of the day, what I want what every person should do is figure out how to put themselves in a position to be able to wake up and say, what do I want to do today? And create processes and systems that enable you to be in that position. So this is one of our greatest goals is to be able to do something that we love to do. And so if you are waking up every day and you're not excited, this isn't, you know, bringing you the joy that it once brought, that's obviously a point in which we need to start having conversations about how to sell. Because you're not helping yourself in any way. Now, what are some of the limitations to that? Are going to be what is your next stage category? How old are you? Do you have retirement? How close to retirement are you? Um, you know, those are long-term aspects that typically you want to bring in a financial advisor in some of those roles to have conversations with you in terms of what's next. And that's obviously going to be based on the valuation of the business as well. So that'll help you determine what that looks like. Um, a lot of times I'll find that business owners don't hate what they do, they're not waking up going, I hate to do this. So it could just be a matter of mental exhaustion. And it could be things that are biological, you know, it could be things like simply get a testosterone test and some blood work done. Because you might be correlating not liking work with some just natural proclivities of biology. And so I would, I would, I've suggested before we make those decisions, get some blood work done. And so that's number one. If you if you hate it, we need to have the conversation sooner than later. If you're noticing you're just exhausted, you're tired, you don't have the same drive, maybe start with the biological side of things, given what stage of life you're in. If all that lines up and you're still not sure, the next stage that I would consider looking at is what's best for the business. And so as you think about going forward, are you excited at expansion and growing and scalability? And what does 10x growth look like over 2x? And what are the operational side of things that I'm excited to adjust and get better at? How can I deliver a better customer experience? What's our orchestrated referral process like? I if you still have the same passion for future growth and expansion, I would just encourage you to pause and go back to that first aspect. Maybe, you know, going back to the first side, maybe it could be relationship-oriented. It could be you're bored in the same home you've been in. There, there are so many aspects to just pause. You know, running to sell for a change of life is not always the best decision. And typically, if that's the point, it's not the best decision. If the only motivation is you're bored with life and this seems like the logical step to do, we need to cross out all other aspects. But going back to number two is if you're not excited about the future and the growth of the business, there are people that are. Now, one solution could be to put a CEO or a president or a vice president in place of you who is excited. So there's answers to that as two. And I'm often trying to not discourage selling your business, but I really want to make sure that it's the best next steps. And I will often, you know, there are people that are that I know we're we're working with a client right now that he's younger, he's he's in his 40s, he's making, you know, a couple million dollars a year in revenue, not a lot of staff, making several hundred thousand dollars profit, but he wants to get into real estate. I've heard this actually so much among people that are anywhere from 20 to 45, they want to get into real estate, and they see that as passive income. And it's not, meanwhile, they have this machine that's generating six figures plus that could start generating that without them having any input. It's baffling, but I I I say all that to not discourage you from getting into real estate, adding that to your portfolio, but only to say I work hard to encourage people at certain stages of life that a million dollars or two million dollars, if you're 45 years old or 35 years old, or 25 years old, that goes really fast. So unless you have substantial income or a succession plan in terms of what you're doing next, really just hit the brakes before you make that decision. Because you've got a uh money printing machine that as long as you can continue to increase the quality and efficiency, it will carry you through retirement. So if you're at the crossroads, there there are times, obviously, to sell your business. And those are going to be times that you've you've you've explored internally time and time again, and you're like, I just do not have a passion for for this business. And number two, you look at it and you go, if I sold the equity that I have in this business, and somebody could then take that equity, I could get cash in return, and they could be far more passionate because I'm not even passionate about managing their passion. And they could take this to a whole nother level. I see the potential, but it's just not in me. It's not necessary, I don't, it's not where I'm at in life, then those are times to at least start getting a valuation. And I often encourage to bring in your financial advisor as a part of this once we solidify a rough idea of what your the valuation would be for this business. And if you're the full owner, that's gonna be what you get. If you're a part owner, it's gonna be a portion of that. And then from there, just sit down, think through, and say, you know what, I think this is the right decision, or no. But typically don't make that decision exclusively on how little cash or how much cash you get. You really have to dig deep because otherwise you are going to be limiting the possibilities of that company. So, what that could mean, as another possible solution and side comment, is you don't sell all of it, you leave a portion of equity in the business and you sell 80%, keep 20% of what you own, and see what happens. Uh, that gives you a little bit of leverage in the future, it gives you a little bit of predictable income in the future, and you get, you know, a good check. So if you're on the fence, those are my suggestions. I hope that helps, and I look forward to chatting again soon.