Are you dreaming of financial freedom after selling your business? You’re not alone. Many business owners hope to cash in on their hard work. But wait! Before you jump into selling, you don’t know what you don’t know. The skills that start a business ones are different than the ones to grow it and the ones to sell it. The host of The Deep Wealth Podcast and post-exit entrepreneur Jeffrey Feldberg speaks with investment banker Trever Acers.
Trever Acers, a big name in investment banking, shares his thoughts. He says, “Having a plan is hard, but it’s important.” You might wonder why. Well, if you set out with clear goals, you know where to steer your ship. It’s like having a map on a treasure hunt. Without it, you could end up lost or, worse, leaving treasure behind!
But don’t worry if you don’t have all the answers right now. Trever also says, “The reality is we’re seeing M&A occur earlier in the lifecycle of companies.” This means even if your business isn’t ready to sell, thinking about it now can help you later.
Finding the Right Advisor
It’s not just about having a goal; it’s about getting the right help to reach it. Trever Acers shared, “When you watch an entrepreneur who has a really good M&A attorney or investment banker, the result is often success.” Having experts by your side means you’ve got people who know what they are doing. They help you avoid mistakes and find the best deal possible.
It might feel scary to reach out to a banker or attorney. Maybe you think you’ll waste their time. But Trever says, “They would love those calls.” They’re there to offer guidance, even if you’re not ready to sell right away.
One important tip that comes up from Trever’s discussion is creating relationships with investment bankers early on. “Don’t worry about reaching out way before you’re ready to sell,” he says. Building relationships can help you understand what might increase your business value and how to plan for it. These early talks can set you on the right path and build trust.
Entrepreneurs sometimes fear reaching out because they feel unprepared or worried about wasting someone’s time. But investment bankers like Trever see the long game. They understand it often takes years of preparation to get everything right.
Don’t Be Seen as a Commodity
There’s a vital lesson to learn: don’t let your business seem just like all the others. “Help the buyer pick out what’s different about your business,” Trever advises. If you’re a company in a sea of companies, your price might not be as high as you want. Show what makes your business special. It could be your customer service or a unique product. Just be sure it stands out!
Imagine selling lemonade on a hot day. If your lemonade is the same as everyone else’s, you won’t sell much. But if it’s the best, people will pay more. Help buyers see how great your “lemonade” is.
Trever Acers emphasizes the importance of differentiating your company from others. If your business looks the same as many others, it is hard to get a good price. As Trever says, “You have to create a dynamic that says unless you get a premium, you will stay or go to market,” meaning you need to show why your company is worth a higher offer.
To do this, think about what makes your business special. Is there something you do better than anyone else? Focus on these strengths and figure out how to show them to potential buyers.
Trever has advice for young business owners too: “Don’t worry about profits early on. Gain experience.” In the early days, it’s more about learning and growing rather than making tons of money right away.
Think spending on advisors is wasteful? Think again! Trever reminds us of the value of investment: “Good advisors should be returning at least a 10x on their fees.” It’s not about being cheap; it’s about seeing it as an investment that will pay back.
Understanding the Buyer’s Perspective
Buyers have their own goals, just like you have yours. Trever says, “Help the buyer understand how your business adds value to them.” Show them how it can grow or fit into their own company. This could make them willing to pay more.
When you’re ready to talk numbers, come to the table prepared. “Start negotiations knowing how to discuss more than just price,” Trever suggests. Understand how your business is valuable in different ways.
Knowing when to sell your business is crucial. Trever mentioned, “If I have a plan and I’m deciding, hey, I’m going to sell my company,” meaning planning ahead is useful. It’s about having clear objectives and knowing exactly what you want to get out of the sale, not just in terms of money, but also in terms of legacy and personal goals.
Try to visualize where your company is headed. Timing isn’t just about reaching financial goals but ensuring the market conditions are right too.
The Power of a Good Narrative
A strong story can boost your business’s value. Experts say that “narrative is 80% of the value.” What does that mean? Tell a story that gets buyers excited about your company. It helps them see future potential, not just what’s on paper.
Trever backs up the thought that how you tell your company’s story can be more important than the numbers themselves. A compelling story can drive up your company’s value when selling. “Help them understand the box’s content—that’s what creates pricing power,” says Trever, which means helping buyers see the true value inside your business.
When you tell the story of your business, focus on the benefits and the potential. Highlight future possibilities and not just past achievements.
Trever tells us, “Don’t be afraid to reach out for guidance.” Whether you’re a new business owner or looking to sell, talking to the right people can open doors. They help you see opportunities you might miss on your own.
Key Takeaways
- Build Early Relationships: Start building connections with advisors and investment bankers early for better guidance.
- Focus on Unique Value: Highlight what makes your business different and use that to your advantage.
- Master Storytelling: Create a compelling narrative of your business; it can be more valuable than just the numbers.
- Plan and Visualize: Have a clear objective and timeline for your business’s potential sale.
- Embrace Boldness: Don’t shy away from starting early and making big decisions.
Trever’s insights reveal that selling a business is not just about financial metrics but about telling a story, building the right relationships, and strategic planning. By preparing early and understanding your unique value, you set yourself up for successful outcomes.
Whether you are just starting your entrepreneurial journey or preparing to sell, use these insights to enhance your company’s value and secure the best deal for yourself. Remember, in the words of Trever Acers, “You’re solving for big, focus on experience,” which means always keep learning and growing.
Final Thoughts
Selling your business can lead to financial freedom. But it requires planning, good advice, and knowing your value. Follow these steps, and when the right time comes, you’ll be ready to make the most of your business sale. Remember the importance of having a plan, finding trusted advisors, and not being afraid to start the conversation about your potential sale. Experts like Trever are there to help you shine, maximize value, and ensure a smooth path to success.
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Today, Feldberg's passion is helping you extract your deep wealth. The 90-day Deep Wealth Mastery program helps create a solid foundation for three areas: increasing profits to enterprise value and optimizing post-exit life. Deep Wealth Mastery offers strategies and insights drawn from Feldberg's rich experience. The strategies from the trenches get results. Jeffrey's vision is to increase the social fabric of society one entrepreneur at a time.
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