If you’re thinking about selling your company, do you know what successful sellers do?
When it comes to selling your company, you have one chance to get it right. To be blunt, don’t screw it up.
What’s makes successful sellers successful?
That’s the question I asked after saying “no” to a wolf in sheep’s clothing which gave me a low ball offer for my EdTech.
At that time, I didn’t know what I didn’t know, and it showed. I was that kid who started his company right out of school with no money, experience, or team.
Like most entrepreneurs, I flew by the seat of my pants. I had no business being in business. Failure became my new best friend. All-day. Everyday.
My saving grace was my grit and passion to solve a painful problem.
Through trial-and-error, my EdTech became successful. Success that put my EdTech on the radar for competitors and future buyers.
Most people thought I was “crazy” to turn down a 7-figure offer based on 3 times EBITDA.
When dealing with the wolf in sheep’s clothing, aka the first buyer, I realized two things.
First, the skills needed to sell a company aren’t the same as the ones that help you build a successful company. Second, successful sellers have a system and process that makes them successful.
It became my obsession to learn the secrets of successful sellers.
What happened?
Two years later, I accepted a 9-figure offer based on 13 times EBITDA from a different buyer.
Successful sellers follow five strategies that set them apart from the crowd.
What are the five strategies of successful sellers, you ask?
Keep reading.
Successful Sellers Know That What Got You “Here” Won’t Take You “There”
The whole purpose of education is to turn mirrors into windows – Sydney J. Harris
If you’re thinking about selling your company, congratulations. Your sacrifice, hard work, and sleepless nights have paid off.
It’s at this point that successful sellers realize something their fellow entrepreneurs don’t:
The skillset that helped you build your company is not the same as the one needed to sell your company.
Know this and know this well.
The skillset that got you “here” won’t take you “there” when it comes to selling your company.
Most entrepreneurs argue that their maters at transforming the “impossible” into “I’m possible.”
When it comes to building a successful business, my Rockstar entrepreneur, you’re right.
But let’s not forget a crucial fact. Chances are your early days had failure as your new best friend. It was your grit and passion that saw you through failure-after-failure.
You enrolled in the School of Hard Knocks when you started your business. It took you years, but you graduated with a Doctorate In Success.
Remember?
Now that you’ve beaten the odds and are about to cash in the chips, are you prepared to gamble your future?
Successful sellers know that what got them here won’t get them there.
Successful sellers don’t gamble with their future.
Instead, successful sellers realize they don’t know what they don’t know and get help, and so should you.
Successful Sellers Know That Failing To Prepare For Their Exit Is Preparing To Fail
Winning is the science of being totally prepared – George Allen
Successful sellers know that failing to prepare for their exit is preparing to fail.
Is a successful exit that simple?
Y.E.S.
Every mistake you make puts your money in your buyer’s pocket.
Read and prosper from, Do You Know The 7 Mistakes Every Buyer Wants You To Make When Selling Your Business?
In the previous section, you learned that successful sellers ask for and receive help.
What’s the help?
Successful sellers building an exit team for the sole purpose of selling a company.
Members of your exit team include investment bankers, accountants, and lawyers. Successful sellers also include tax specialists, strategists, and a Chief Exit Advisor.
Read and prosper from Assembling Your Exit Team? How To Crush It And Win.
Successful sellers do one more thing that sets them apart.
What’s this one thing, you ask?
Preparing their virtual data room before hiring an investment banker.
Preparing a virtual data room is painful, time-consuming, and expensive.
The time and money spent is a rounding error compared to the higher valuation you’ll receive.
Read and prosper from How To Increase Your Company Value With A Virtual Data Room.
Successful sellers realize two things.
First, successful sellers realize that the system is set up against them. Second, successful sellers understand that the key to success is preparation.
And you’ll need your preparation to protect yourself from the next item that is the killer of deals.
What’s this one item?
Keep reading to find out.
Successful Sellers Incentivize Their Exit Team Today So Everyone Prospers Tomorrow
Show me the incentive and I will show you the outcome – Charlie Munger
You’ve worked hard, beat the odds, sacrificed everything, and built a successful company.
Thinking about your exit has visions of a bank account full of zeroes, pina coladas on an exotic beach, and fun.
While you’re thinking those great thoughts, you better do one thing, or your exit may never happen.
Think about the optics of your exit to your exit team and company.
You’re here today and gone tomorrow with a bank account full of zeroes and a lavish life.
Resentment, jealousy, and greed by your management team can and will destroy your exit.
Successful sellers are aware of the negative optics and do one thing to make the optics positive.
What’s the one thing?
Successful sellers create an exit bonus for their exit team and key employees.
Wait a minute, you say, why would I pay out-of-pocket to people I’m already paying.
Your exit bonus takes care of the “what’s in it for me” that everyone around you is thinking but not saying.
Remember, something of something is better than something of nothing.
A bonus to investment bankers for a higher value has them thinking of how to exceed projections.
The exit bonus to your management team and key employees has everyone wanting the exit to happen.
Be smart, and disclose your management and employee exit bonus to your future buyer.
An exit bonus transforms you from the rich villain to the generous hero.
Successful sellers leverage incentives for their exit team and so should you.
Successful Sellers Are Masters At Providing Hope For A Better Tomorrow
Hope sees the invisible, feels the intangible, and achieves the impossible – Helen Keller
Do you know what determines company value?
Hope.
Successful sellers are masters at providing hope for a more profitable tomorrow.
Investment bankers insist a company’s value is a financial calculation.
No more. No less.
The investment bankers are wrong.
Selling a business has both order qualifiers and winners.
Examples of order qualifiers include profits, a strong business model, and many clients.
If your company isn’t profitable, as an example, you’ll have issues selling your company.
Order winners include a new marketplace, service, or business model.
Your past performance gets you on the radar with future buyers.
Buyers know what you did yesterday.
What buyers pay a premium for is what your company can do for them tomorrow, the next day, and the day after.
Successful sellers are masters at painting a bright future of unrealized opportunities.
Remember that international expansion you couldn’t do from lack of time and money?
Your future buy is already in that country.
And let’s not forget that new offering you shelved from not having enough employees.
Your future buyer already has the people and experience to get that new offering to market.
Your so-called failures are gold, pure gold, to your buyer.
What you view as “failure” is a goldmine of opportunity for your future buyer.
But your future buyer isn’t a mind reader. Be bold and aggressive in painting the future.
Successful sellers are masters at providing hope to buyers.
Do this today, and you’ll thank me tomorrow after you receive a higher valuation.
Do you know the one person you must hire for your exit team, but probably won’t (at your own expense)?
Keep reading.
Successful Sellers Are Ultra Successful Because They Hire A Chief Exit Advisor
The only true wisdom is in knowing you know nothing – Socrates
When it comes time to sell your company, you have one chance to get it right. Don’t blow it.
What do you do?
Hire a Chief Exit Advisor whose only agenda is your success.
What’s a Chief Exit Advisor?
A Chief Exit Advisor anyone with a track record of success selling companies. Examples include investment bankers, lawyers, and strategist.
The first exit team position hired by successful sellers is a Chief Exit Advisor.
Successful sellers hire a Chief Exit Adisor for an important reason.
Do you know the one flaw of exit teams, even the best exit team in the world?
Exit teams want to get your deal done so they can get paid and move on to the next one.
Suppose your investment banker had to choose between a $40M or a $50M deal. The $40M deal is a slam dunk while the $50M deal may not happen.
You have $10M of your money on the line.
Investment bankers prefer certainty over risk and choose the $40M deal. The incremental commission from $10M is a rounding error compared to no deal.
Buyers know this, and so should you.
In the blink of an eye, $10M left your pocket and went straight to your buyer.
Enter a world-class Chief Exit Advisor who focuses on finding the deal with the highest value.
Whether you walk away from a higher deal or pursue it, the choice is yours. As it should be.
You don’t know what you don’t know, but a Chief Exit Advisor does.
Successful sellers leverage the power and benefits of a Chief Exit Advisor, and so should you.
Conclusion
When it comes to selling your company, you have once chance to get it right. Don’t blow it.
Many sellers make one fatal mistake that either kill their deal or lower value (a lot).
What’s the fatal mistake?
Assuming the skills that built your company are the same ones to sell your company.
Successful sellers realize they don’t know what they don’t know.
It’s the same successful sellers who follow five strategies to retire rich and happy.
How do I know?
I was that kid who started his EdTech out of school with no money, experience, or team. Despite the odds, my EdTech led the industry and became a massive success.
Enter the wolf in sheep’s clothing who knew that I didn’t know what I didn’t know. The result was a 7-figure offer based on 3 times EBITDA.
I knew I could do better and dedicated myself to mastering the art and science of selling a company.
The system is set up against you and me as entrepreneurs.
What I learned shocked me and pushed me harder to create an exit playbook that gets results.
Two years later, I accepted a 9-figure offer based on 13 times EBITDA.
What made the difference.
The five strategies I learned from successful sellers.
If I can do it, so can you.
And the great news is that you already have everything you need, right now.
You can do it. I know you can.
Here’s to you and your success!
Thanks.
Your BIGGEST Raving Fan,
Jeffrey Feldberg
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.
Learn more through https://iapdw.com/prosper
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