Is Selling My Business the End Game ?

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The End Game

In the business world, your professional career, your job, what is your end game? Do you have a goal to “be done by the time I turn___ years old”? What is your goal? Starting a business and selling it for a very comfortable profit- is that your goal? Climbing the corporate ladder to the top- is that your goal?

Too Busy To Set Goals?

Putting a good meal on the table for the family and retiring comfortably at the age of 65 is that your goal? Retiring by the age of 30, 40, 50 60,70? Is that your goal? Sometime we get mired in our professional/business life and are to busy solving todays problem and have no time to really plan for tomorrow or for the years of tomorrows we will have after “retiring”.

“I want to start a business- grow the business-make it profitable – and hopefully be able to sell it for enough money for me to retire on.”

I believe this to be a reasonable and fairly common goal among business owners and or entrepreneurs.

But I think, like a lot of complex situations, the devil is in the detail. Lets say you are enormously successful and able to financially to accomplish your goal and sell your business at the age of 30, 40, 50, 60 years old? Do you plan to then just relax, and play out your years playing golf, tennis, and waiting for the 5:00 Cocktail hour?

Business Goals

Is Selling A Business Your Ultimate Goal?

Is selling your business the end game, finishing point, or just a step or part of your business life? The demographics of where I live is such that there are many many people retired (ages 50-80) who we live among and interact with on a regular basis. The need to stay active physically and mentally is a priority for most of them, and these are generally people than can be retired and “do nothing.” Exit planning from a business requires careful thought and potentially some soul searching as well.

Selling your business and retiring very often is not the end game rather the beginning of something new. There may be some people that can retire at the age of 35 and play golf, fish, play tennis for the next 40 plus years – And more power to them, but many cannot. And as we get wrapped up in the day to day task, opining to be out on a golf course day after day sounds pretty damn good. Do more than just daydream of retirement and recognize the need to have an exit plan. Take the time to consider your exit strategy to increase your chances for the best decisions for you and your family.

Profits are Up 90% – Sell My Business?

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I contribute a weekly blog post for a website called Noobpreneur that reaches and provides valuable information to entrepreneurs. New entrepreneurs or “newbies” are the focus. My current business activities focus on the buying and selling of businesses. Most /many “new” entrepreneurs are in the exploration, startup or newly started stage of their business venture.

Business Cycle – Start, Run and Sell

Where does selling a business enter into this paradigm? Everything seems to run in cycles. There is a start, a middle and an end. Much of the focus of a new entrepreneur is full of excitement and somewhat shorter term perspective of “starting, building, growing something.” Some entrepreneurs start a business with the specific goal of selling that business.

Some entrepreneurs goal is to buy a business with no goal of selling that business. But it is very easy to start a new venture without clearly outlining an end. Again most every business will have a start, something you may refer as to “the middle”, and an end. It is so much more desirable to sell your business when you plan to in lieu of being “forced” to sell your business.

Business Planning

Photo (c) business-express.net

The Importance Of Business Planning

Starting a business is an exciting time, and it takes a lot of work and effort to build a successful business. Afford yourself the time to consider your exit strategy. Too often one is “too busy running their business”, to fully consider where they are going. Planning to sell instead of “needing to sell” is so much more rewarding for the hard working entrepreneur.

You pick the time – Don’t let the time pick you. I know things may be looking good and everything is lined up, but what if General Motors 20 years ago targeted the sale of their business and provided all that value to their shareholders in lieu of the need for government assistance and bankruptcy?

Again, your business may be going gang busters, but I’m kind of thinking that if a Generals Motors can have an exit (or almost) exerted on them, maybe your exit of your business may not be what you planned on or didn’t plan on.

“I have Not Failed I’ve just found 10,000 ways that won’t work” – Thomas Edison

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My family and I lived near Fort Myers Florida for 11 years – Thomas Edison and Henry Ford had vacation homes right next to each other  in the  Fort Myers Florida.

Thomas Edison Business Mindset

Many stories and quotes are attributed to these successful men. The above quote – “I have not failed. Ive found 10,000 ways that wont work” – To me addresses the trials and tribulations of a small business owner or entrepreneur. Failure in start ups happens. It can happen again and again, and will happen. Failure doesn’t get dealt with as a defeat, rather is viewed as a setback. Many failures turn into policy and/or procedure to avoid similar future problems. If you buy a business you can have a pretty good feel on what to expect assuming you’ve performed adequate due diligence.

Thomas EdisonIve been part of many discussion revolving around starting up a company and how many years to either break even or make a profit. Some people say it is one year others say 2 years, others 3-5 years. For every business reaching this milestone of “break even” or “profit” is different. The measuring stick used and the timeline expected should be considered. Arbitrary goals and time frames should not be set. There are many unknowns in a start up. You can only do so much due diligence on something that has yet to happen – “You dont know what you dont know”- this quote may or may not be from Thomas Edison,- but applies.

I think that many people have a certain entrepreneur spirit within. Only a certain percentage act on that spirit. And the successful ones I believe are the ones that are successful at understanding failures will happen, and are resilient enough to accept the many failures that will come your way. Failing 100’s and or 1000’s of times and then coming up with the light bulb is a prophecy most any small business owner / entrepreneur would accept.


Free AK-47 with Purchase

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How to win new business

What would you do to get a new customer or some more business?   While vacationing with my family in South Carolina, I drove by this sign that stated “FREE AK-47 WITH PURCHASE”.

I kind of view it as an interesting marketing effort. It certainly can increase the visibility of this company among all the other similar businesses along this somewhat rural, lake area street. I am not sure of the details or what exactly this tractor and boat shop was offering. It made me consider the various methods and or limits we all go to, to gain business. I work with people that are interested in buying or selling a business, but recognize that all businesses need new business. I’ve hear it said “If you are not growing you are dying”, I’m not so sure it is that black and white but subscribe to the concept.

Today’s business climate encourages cost cutting measures. It is fairly easy to cut marketing/sales expenses, as these cost very often are not “fixed cost”, and can be readily modified or reduced if needed. Maintaining marketing sales effort now in preparation for a recovery is a sound approach. Ultimately gaining the attention of prospects or potential customers is one of the more critical parts of a marketing effort.

It`s All In The Marekting

This Tractor/Boat shop through no real additional cost certainly grabbed my attention. (And I am not in the market for a boat a tractor or an AK-47.) While I pulled off the road and into the parking lot to take a picture of this sign, I saw no customers coming out of this place of business with a tractor and AK-47 over their shoulder. But, I do believe the effort and uniqueness of this sign did and will help bring more potential customers into the store.

Marketing efforts can be fairly inexpensive, and sitting back, stopping marketing efforts and waiting for recovery can prove to be very expensive as well.

Today’s business climate encourages cost cutting measures. It is fairly easy to cut marketing/sales expenses, as these cost very often are not “fixed cost”, and can be readily modified or reduced if needed. Maintaining marketing sales effort now in preparation for a recovery is a sound approach. Ultimately gaining the attention of prospects or potential customers is one of the more critical parts of a marketing effort.

Starting a Business or Buying Business with Family or Friend – STOP

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What is the 1st step one must take when thinking about buying a business or going into business with family or friends? STOP – and allow yourself careful consideration.

Is Starting A Business With An Acquaintant A Good Idea?

I think the concept of going into business with a life long friend, or a good buddy from college, or your brother, dad, sister is a fairly common thought process. Family run businesses are prevalent throughout the business communities. There are many successful family businesses, so they must be a good idea – right?

My short answer is I’m not so sure.

Businesses that have the ability to sustain over long periods of time- 10 years, 20 years or more to me are classified as successful businesses. But do the businesses sustain at the expense of breaking apart family values, feelings, or structure? Are holidays at the dinner table among the “family business associates” enjoyed as a family or another business meal, or worse?

I think there are many success stories of family businesses or buddies that go in together to buy a business. But, I also think the number of family/”friend partnership” businesses that fail are large, and the number of businesses that are bought, started, or run by buddies or family members that adversely affect those important relationship may even be larger.Why is it so easy to come up with the idea of asking your buddy to go into xyz business with you? I think a big part is the feeling that you know your buddy or your brother/sister. But the missing link here may be that you know a certain part of that person real well, and the other part- the business part, – you may not get to know until it is too late.

Family Business

Photo (c) topnews.in

I can speak of this matter from experience as I have been in business with both family and friends. For me it has worked out. I certainly experienced some bumpy roads along the way, but overall I have been happy with the end result of those business/personal relationships.

But I have always felt that my experience may have been more the exception rather than the rule. Stories of friends that went into business together and it didn’t work out surround me. I currently am evaluating a new venture that involves this same subject matter.

Friend Offering A Good Business Opportunity?

So what do you do when a friend offers you a very interesting business opportunity? I say STOP, and move beyond the idea, and analyze the business deal.

I’ve heard someone say STOP and get an MRI on your brain, but I prefer the non-medical approach. There are steps that can be taken to mitigate some of the pitfalls of such an arrangement and these may vary with the type of venture whether buying a business with family of friends or starting a business with family or friends.

Below are a few step that can be taken and I will take when evaluating the opportunity of buying a business with a friend.

  1. Does the concept make sense? It must be a well thought out concept, and numbers must support the concept.
  2. The business plan needs to spell out everything, and then it must be followed. Moving forward without a plan is a bad plan.
  3. Draft the terms of the agreement between the parties involved. Expectations, Roles, compensations, exit strategy, are among the items to lay out in such an agreement.
  4. The agreement has to be a win/win for those involved . The more situations that can be addressed going in can only help to mitigate problems that may occur later on.
  5. Plan on X% more time and X% more money than you planned to open the doors.
  6. Have a long term plan. Success can be surprising sometimes, and possible success and benefits to those involved may be best addressed upfront

Part of me says Ive had a fair amount of good long term business relationships which are valuable, but I value the long term friendships I have more. Good friends seem farther and fewer between than good business partners.

What do you do when your buddy approaches you with this idea to buy this great business?