The Psychology of Selling – Are You Sure You’re Ready?

Selling your business is most likely one of the biggest decisions you'll ever make.  If you own a business, you understand just how all-encompassing it can be.  Nevertheless it is important for you to step back and seriously reflect on whether or not you are truly ready to sell.  The psychological aspects of selling are not trivial.  Various aspects must be taken into consideration before initiating the process to sell. Far too many business owners believe they are ready to sell, only to discover (much too late) that a better option exists and an executed sale is not optimal for their plans.  Selling When There is No Other Choice  Selling a business because there is no other choice, such as situations concerning failing health, personal issues or problems with a business partner, isn’t a true choice at all.  In this situation, the psychology of selling is essentially irrelevant, as you have one option, namely, to sell. The Case of Burnout  In other cases, owners hit a … [Read more...]

Is It Time To Think About Selling Your Small Business?

There are many reasons why small companies are put up for sale.  Some of the more common reasons can actually have little to do with the company’s general performance.  For example, many small business owners discover that they need to sell for health reasons or personal concerns, such as divorce or partnership issues.  While a business downturn or fear of a larger competitor looming on the horizon might prompt many business owners to sell, economic drivers are not the only issue.  Owners may want and need to sell, but often it isn’t always that simple. Many business owners are looking to retire, but are unpleasantly surprised to learn that they simply can’t afford to do so.  Still yet, many business owners don’t truly want to retire or sell, but instead they just want more freedom in their lives.  The day-to-day responsibilities of owning and operating a small business can take their toll.  Many business owners are looking to make a change and would love to be free of this burden.  … [Read more...]

Is Your Business Charging Enough For Goods & Services?

Many businesses could charge more for their goods and services than they do, but fail to do so.  A small increase in the price of your goods and services can make a tremendous difference to your bottom line.  Owners often do not realize the great value of charging just slightly more.  In this article, we’ll explore how charging even slightly more can dramatically impact your business. Consider a hypothetical example.  A business owner tells a potential buyer that he or she could safely increase their prices by 1.5% and do so without the price increase causing any negative impact to sales or business disruption.  The savvy buyer quickly realizes that the business, which has $70 million in sales, is leaving $1 million dollars on the table by not increasing its prices by 1.5%.  A smart buyer realizes that after purchasing the business, all he or she has to do is institute this small price increase in order to achieve a sizable increase in profits. In The Art of Pricing, Rafi … [Read more...]

3 Steps for Achieving Pricing Power

Most of us want to control our own fate, and this is especially true for entrepreneurs and business owners.  However, the truth of the matter is that for most business owners, their fate isn’t completely in their own hands.  For example, a variety of forces can prevent businesses from establishing their own prices.  Knowing whether or not your company has pricing power is essential and can influence a range of decisions that you may make.  Let’s take a closer look at what steps you can take to control your own pricing. What is Pricing Power? This economic term describes the effect of a change in a product price on the demanded quantity of said product.  Your company’s pricing power is linked to the demand for your products or services.  If you have a high level of pricing power, you can raise your prices over time and maintain your customers.  Who Has the Greatest Pricing Power?  It is no great secret that the Amazons, Apples, Wal-Marts and auto manufacturers of the … [Read more...]

The Art of Selling Your Business

The Art of Selling Your Business: Winning Strategies and Secret Hacks for Exiting on Top by John Warrilow was released on January 12th, 2021 is a valuable resource for business owners. John is the founder of The Value Builder System and accomplished author.  While not a business broker himself, Warrilow has gathered considerable knowledge and expertise on the industry.  His previous book Built to Sell was listed as one of the best business books of 2011.  In this article, we explore some of the key points in Warrilow’s latest book. Selling When the Time is Right One key focal point of the book is that business owners should skip trying to find the perfect “magical time” to sell their business.  Additionally, Warrilow notes, “I make the strong recommendation in the book that the best time to sell your company is not during some mysterious macroeconomic environment.  It is when someone is willing to buy it and you get an offer.  And that is because at that point, you’re in the … [Read more...]

Why Businesses Get Into Trouble

While no two companies are exactly alike, with endless variables and many factors causing companies to fall into trouble, there are just a handful of  primary reasons why companies can fall on hard times.  Let’s take a closer look. Lack of Focus Companies that lack focus can often run into considerable trouble.  Not understanding their customers and what they need or want can lead to endless problems.  It is vital that companies frequently stop and assess who their customers are and whether or not they are properly servicing their needs. Management Problems Not too surprisingly, many companies can run into trouble because of poor management.  Management problems are not one-dimensional, but instead take a variety of shapes.  Management that isn’t focused, is incompetent, or simply doesn’t care about the business can translate into a business’s premature death.  Under the umbrella of “management problems” also falls such missteps as poor financial controls, quality … [Read more...]

Maximizing Your Time by Rating Buyer Seriousness

Your time is your most valuable commodity.  Regrettably,  many “buyers” are not truly buyers but are window shopping or acting out a fantasy of buying a business.  Others plan to buy only if they find the “deal of the century.”  The last thing you want to do is waste your time trying to work out deals with people who aren’t serious or qualified buyers.  The Plus and Minus System One approach to weeding out window-shoppers from serious buyers that are truly worth your time is to use a “plus and minus” system.    First, let’s evaluate factors for which you’ll want to deduct points.  If a buyer needed outside financing, then subtract 4 points.  Likewise, if a buyer has been looking for 6 months or more, you’ll want to also subtract 4 points.  If a buyer has no cash available, you should subtract 3 points.  Additionally, if a buyer is currently working in the corporate world, you should also subtract 3 points.  These are the 4 largest reasons to subtract points, but they are not … [Read more...]

Ownership Transition Survey Results

The ownership transition survey by Mass Mutual Life Insurance, though done about a decade ago, is worth examining even today.  These interesting survey results were based on feedback and answers from family-owned businesses.  Let’s dive in and take a closer look at the numbers and what they can tell us for 2021 and beyond. The one important point that leaps right off the page is the fact that a whopping 80% of family-owned businesses are still controlled by their founders.  A large percentage of those founders are Baby Boomers who will have little choice but to retire in the next few years. The survey indicated that 55% of CEOs over the age of 61 or older have yet to choose a successor.  This fact serves to emphasize the fact that a “retirement wave” will hit family-owned businesses, and will lead to some interesting shifts and opportunities.  While the survey indicated that 13% of CEOs state they will never retire, the reality of the situation is that ownership will eventually … [Read more...]

The Importance of Owner Flexibility

Don’t expect to sell your company overnight.  For every company that sells quickly, there are a hundred that take many months or even years to sell.  Having the correct mindset and understanding of what you must do ahead of time to prepare for the sale of your company will help you avoid a range of headaches and dramatically increase your overall chances of success. Perhaps most importantly, you must have the right attidude.  Flexibility is a key attribute for any business owner looking to sell his or her business.  There are many variables involved in selling a business, and that means much can go wrong.  An inflexible owner can even irritate prospective buyers and inadvertently sabotage what could have otherwise been a workable deal. Be Flexible on Price A key part of being flexible is to be ready and willing to accept a lower price.  There are many reasons why business owners may fail to achieve the price they want for their business.  These factors range from lack of … [Read more...]

Getting the Most Out of Confidentiality Agreements

When it comes to buying or selling a business, there is no replacement for a solid confidentiality agreement.  One key way that business brokers and M&A advisors are able to help buyers and sellers alike is through their extensive knowledge of confidentiality agreements and how best to implement them.  In this article, we provide you with an overview of what you should expect out of your confidentiality agreements. A confidentiality agreement is a legal agreement that essentially forbids both buyers and sellers, as well as related parties such as agents, from disclosing information regarding the transition.  It is a best practice to have a confidentiality agreement in place before discussing the business in any way and especially before divulging key information on the operation of the business or trade secrets.  While a confidentiality agreement can be used to keep the fact that a business is for sale private, that is only a small aspect of what modern confidentiality … [Read more...]