Have you ever been asked if you wanted to sell your business?
If someone came through the door today and asked you if you wanted to sell your business, what would say?
Maybe not today, but at some point in time you will consider this option.
At one point in my career, I was very fortunate to spend some time in Mergers and Acquisitions, which sounds like all high-level strategies and tactics, but I quickly learned it’s about helping people buy and sell their business, on a grassroots level.
I remember one client who wanted a million dollars for his business. Our team could not figure out how he came to this price as the company was not worth that much.
Eventually, we learned that he named this price because 10 years earlier he had declared to his wife that the business was worth that much.
Of course, everything is for sale if the price is right.
But what is the right price for a business?
First, let’s define business.
An internet search on the definition of a business was very discouraging. Most definitions, including the IRS, define a small business in terms of sales, employees, location served, or some other secondary criteria. However, these definitions fail miserably.
Here is my definition of a small business: “A legal entity consisting of an organized collection of strategies and tactics that systematically provide a quality product or service to a target population in exchange for money.”
This is what a business really is. And the degree to which each of these systems is developed determines the value of the business. The more developed and proven the systems are the bigger the value of the business.
In contrast, when it comes to selling a business, most people think in terms of the “book of business, the hard assets, and goodwill, ” which comes down to selling the customer list, plus whatever you can negotiate.
Why is this important?
Most people get into a small business to be their own boss, control their time, have creative control of the product, and earn some money. Then as time goes on they begin to feel like a captive of their business.
The way to break out of this gloomy time is to focus on the basics of building a business according to the definition above.
The huge bonus is that when a business has market value (is saleable), it’s a lot more fun to run it!
Then you’ll love your business because it provides for you the way you always dreamed it would!
In the next few days, I’ll be diving into this topic and describing how to make this transformation happen.
This will require more email from me, but if you are not interested, simply delete the email, or unsubscribe at the bottom of the emails.
Stay tuned for some free upcoming teleclasses on this very important topic!
Remember, you only get results when you take action on your ideas!
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