Here are some tips to successfully sell your business.  Bear in mind that to sell your business successfully requires a lot of preparation, attention to detail and organization.  Most sellers badly underestimate both what they need to do and what to do if a qualified buyer comes along.

A good rule of thumb is that it takes about ten buyer inquiries to reach a potential buyer who has the qualification to buy the business.  There is not a shortage of buyers; there is a shortage of buyers who have the right industry and management experience, a good down payment and credit score and the most important ingredient of all, the motivation to move through the process to buy a business.  So if you find the right buyer, you need to have your “A” game ready so your business sells in the shortest time possible.

Here are 5 tips to help you prepare and be ready to sell your business.

1.  Assuming you know what the buyer wants

Buying a business is a unique experience; every transaction is unique.  If you meet a buyer with the right qualifications and assume you understand their needs, wants and motivations it is a bad practice as a smart buyer will not reveal their true motivations.

2.     Failing to understand the buyer’s objectives and needs

There is a big difference between assuming you know what the buyer wants and clearly understanding what the buyer wants to know from you.  The buyer has questions and needs and it will be their final decision as to whether or not this is the right business for them to buy.  If you can meet the criteria the buyer gives you…you are on your way even though the criteria may not ultimately be what the buyer says to you.  So listen and understand what the buyer wants to know and decide if it is the right time in the transaction to share it with them.

3.     Improper pre-sale planning and a lack of organization

There are so many steps to successfully sell a business.  Being organized and having all the right processes in place is a starting point to try and be successful.  This includes the legal forms and processes you want a buyer to sign such as a confidentiality agreement, buyer’s financial statement and buyer disclosure.

4.     Answering the question before the buyer asks

Be careful to understand the question and then provide the right answer.  You may be answering a different question than the buyer is asking…and that can be bad or very bad.  When you sell a business there can be great value in listening and answering as clearly and honestly as possible all the questions.  Too much information provides more questions, not enough information suggests something is being hidden.

5.     Allow the buyer to feel a sense of control

The standard practice is for all parties to try to control the process.  After all, if a deal does not eventuate each party feels they lost something even if it’s only their time.  Most deals collapse and the business does not sell because one party doesn’t understand what or why a question or process needs to happen at different points in the transaction.  Trust is one of the hardest components to create.

Selling a business requires a lot of patience, making sure it’s clear what you are selling, organization so you can respond to questions and requests for information while at the same time being alert to only answer questions at the appropriate time.

If you’d like more information on how to sell your business, you are welcome to sign up for my free monthly newsletter by clicking the following link Free monthly newsletter.  When you sign up you also get access to over 25 free documents to use when selling your business.

Successfully sell your business

Why would you bother when selling your business to include a sales and marketing plan?  After all, the sales and marketing plan is a document that most business owners don’t have time to get around to put together.  I’m not sure why that is as it’s more important than the business plan and indeed complement it but more importantly, when the business owner wants to sell their business it can be the difference in the business selling or closing its doors.

Why is it more important than the business plan?  The business plan outlines the vision, strategic direction and business and financial goals of the business.  The sales and marketing plan breaks down the business plan to show how you are going to get there and the tactics to be used to attract the customers it needs.  Or more importantly, the sales and marketing plan is about growing the business and how to maximize the use of precious and limited resources including money, knowledge, expertise and most important of all; time.

The sales and marketing plan can be as complex and with as much detail as you wish to make it.  It can include strategies and tactics or a combination of both.  It’s important, though, that you understand how to use each idea and importantly, the results each strategy and tactic will bring to the business.  There is an old adage in business management: If you cannot measure it you cannot manage it.  There is also a famous quote that says “I’m convinced that 50% of my marketing is effective, I just can’t tell which 50%.”

Some of the key items you want to see in your sales and marketing plan includes a profile of your typical current customer, what percentage of business they bring, where they come from and how they found you.  If you are planning on growing the business by either more of the same type of customer or a different customer demographic, this needs to be defined, measured and made sure it makes good business sense to target.

Sales and marketing should always be seen as an investment and just like all other aspects of your business, needs to bring a return that you measure or you need to go and try something else or adjust your sales and marketing plan.

If you are looking for different sales and marketing tactics there is simply no shortage of them.  Here are a few suggestions.  Each one needs proper consideration and research to make sure it’s the right strategy for your business.  These tactics include simple things like your business cards, office letterhead and stationery, email signature, coupons or flyers as well as things like your website, blog, monthly electronic newsletter, networking, taking someone out to lunch once a week, social networking media such as Facebook, LinkedIn and Twitter.  Other strategies could include TV advertising, seminars to educate customers about your service, trade shows, hiring a Public Relations expert, joining local associations such as the Chambers of Commerce or other local business or trade association groups.

Just like your business plan, the sales and marketing plan needs to be a living and breathing document.  It needs to include projections and just as importantly, the results from any activities undertaken so you can tweak and constantly improve.

If you do not have a sales and marketing plan, spend a little time and get one started.  It’s always a Work In Progress so adapt and make changes based on successes and failures.  Because it’s a planning document, write one for a 12 month period, implement and measure it and then review in detail when you update the plan for the next 12 months.

Reviewing the sales and marketing plan towards the end of its time frame is important.  It can be easy to discontinue a strategy or tactic in the belief it’s not working.  However, there may be value in understanding what something did not work and then make some tweaks to try it again.

A sales and marketing plan is all about planning and measuring results.  The approach does not need to complex.  Not all business owners are good at sales and marketing so bring in the right professional help so this critical business need generates the right success the business needs.

Having a sales and marketing plan that shows the strategies and tactics of a business with their results can be a great selling tool to the business owner when they try to sell their business as this is one of the biggest challenges a buyer wants to know and manage and determine if they have the ability to buy and operate the business.

If you are considering selling your business, this link will provide a summary of the steps.  http://www.rogersonbusinessservices.com/docs/TheManyStepsToSellingABusiness.pdf

The life blood of what we do as human beings and the glue that keeps us all together as a society whether at a local, regional, national or indeed international level is the ability to communicate with one another.  Many times that communication breaks down and many times this leads to negative consequences.  All entrepreneurs are familiar with a Business Plan and a Sales and Marketing Plan but not everyone has heard of a Communication plan.  So what is a Communication plan?

A Communication plan is an attempt to standardize the message that goes out from the business to its customers.  It complements and dovetails with a Business Plan and Sales and Marketing Plan.  In some instances there can be an overlap but essentially it includes all written, spoken and electronic communications.

Some of the ingredients of a good Communication plan include the brand of the business.  The brand, with no more than a graphic or a word defines the company.  Think of ‘Google’ and its colors.  I expect you would have trouble remembering what letter of the alphabet belongs to each color but there is no mistaking what the word ‘Google’ means.  Similarly, the word ‘Coke’.  As soon as you read the word ‘Coke’ the color red comes to mind.  So one of the first things to consider in your Communication plan is the brand and how you want it perceived by the market.

Many business owners choose to hire a graphic artist, brand or image consultant.  They look at things such as the business name, colors, logos, graphics and other items so that there is a consistent look and feel.  Large corporations spend a lot of money getting this right as it quickly represents the company.  Consider BP, Subway, Macy’s, United Airlines, FedEx, HP, AT&T and Edward Jones to name a few.

A good way to build a Communication plan is around objectives.  For example, it could include excellent customer service, customer retention or loyalty, how to touch each customer be it through a monthly newsletter, email or telephone call.  It obviously includes bringing the employees of the business together so they understand any objectives and understand their role of that communication.

Another suggestion includes identifying what tools you will use to communicate to your customers.  For example, it can be your website and blog as well as newspaper advertising, magazine ads, posters and even things such as report covers.  There is no shortage of ideas.

It’s also important to establish a timetable especially where it includes goals and objectives.  The current work environment is overwhelming and requires prioritization; especially if it involves employees or hiring outside help.

Finally, the Communication plan should include measurable results.  You can collect these results on a daily, weekly or monthly basis.  It is then important to review the results on a monthly basis and then communicate back to your employees or team so they know what they are doing is effective, or it is not effective, what needs to change to achieve the right results.  A final annual report then needs to be provided so it’s archived but available to review each year.

If you would like some free documents to help you sell, buy or operate your business, click the following link:  http://www.rogersonbusinessservices.com/sell-or-buy-a-business-free-documents

You can then get access to 25 free documents including templates to create a business plan, cash flow projection, break even analysis, competitive analysis, bank loan request forms and more.

Everyone is familiar with the Christmas song, The 12 Days of Christmas.  Without going into every verse of the song, the carol works forward with the first day of Christmas being a partridge in a pear tree, the second day of Christmas two turtle doves and so on.  The song is full of optimism and hope that the giver and receivers of the gifts will be thankful for life, the opportunity to share and hope for the future.

From researching the origins of the song, I came across something interesting.   One of the articles I read suggests the 12 days of Christmas is not about the 12 days prior to Christmas but in fact, the 12 days from Christmas until the beginning of Epiphany which begins on January 06.  When I thought further about this, it naturally combined with another favorite thing we do during the Holiday Season and that is to make New Year’s Resolutions.

New Year’s Resolutions are a powerful opportunity as they allow us to do three separate things.  First, look back at our experiences of the last year and decide if it’s been a good year and what we could have done differently.  Because it puts us in the mood, we also tend to go back and look at more than just the last year but initially the last couple of years and decide whether or not it has been good.  Once we start doing that, we obviously look back at our life and decide what we like and what we wish we could do differently.

Our next reflection tends to move to the present where we look at our life and what we now have.  We reflect on our family and friends and how important they are to us.  We also look at whatever means we use to sustain ourselves and put a roof over our heads, the food on the table, the clothes we wear and the myriad of other things that allow us to live our life.

This then brings us to the final reflection and probably the most exciting and powerful opportunity of all and that is to look ahead and decide what changes we’d like to make to build and enhance our life and our immediate loved ones.  This reflection, for obvious reasons, takes us to both our job and what we are currently doing or, if we own a business, how that business is performing.  Regardless of whether we have or do not have a job or own a business, it is the time to ask some questions.  These questions include whether or not what I am doing is worthwhile and fulfilling, whether it produces the income I need to live the life that I want, what changes I want to make to achieve the personal, financial and emotional goals I’ve set for myself.

So the point of this article is a couple of things.  As you embrace the Holiday Season, enjoy it as it is a special time and I wish you nothing but peace and goodwill.  If your time allows, sit down and meaningfully decide on your New Year’s resolutions.    If your New Year’s resolutions are likely to include either buying or selling a business you may want to consider a thoughtful and logical approach.

If selling your business is an option you are considering, this link will provide a simple summary of the steps.  http://www.rogersonbusinessservices.com/docs/TheManyStepsToSellingABusiness.pdf

If you would like more information then this link will allow you to buy and download a copy of my book Successfully Sell Your Business.  http://www.rogersonbusinessservices.com/book-successfully-sell-your-business

If buying a business is an option you are considering, this link will provide a simple summary of the steps.  http://www.rogersonbusinessservices.com/docs/TheManyStepsToBuyingABusiness.pdf

If you would like more information then this link will allow you to buy and download a copy of my book Successfully Buy Your Business.  http://www.rogersonbusinessservices.com/book-successfully-buy-your-business

Owning, running, buying or selling a business is a major step for all entrepreneurs.  It comes with obvious financial risk which everyone understands and is one of the key focus and responsibilities all business owners.  It also prevents many would-be-entrepreneurs from starting their journey to own and operate their own business.  However, an element not all business owners understand or acknowledge is that the business ownership comes with many emotional risks that play just as an important role as the money itself.

Emotional risks constantly challenge all business owners.  The obvious one is success or failure.  For most entrepreneurs, once they come to terms with the financial risk, they must come to terms with the fact there is a possibility the business will fail.  The fear of failure links with the real concern about what to say to family and friends.

Another emotional risk which is part of an entrepreneur’s journey is handling the ups and downs which inevitably lead to burn out.  Every entrepreneur hopes there are more ups than downs and that the ups are greater and longer than the downs.  This means not only emotionally handling these situations but more importantly, building and using different tools and resources so they are available when needed.

A further emotional risk is having the self-confidence and self-belief that you have the skills, tenacity, and acumen to handle most if not all situations as they arise.  It is a given that the capitalist system goes up and unfortunately and inevitably goes down.  Each phase of the economic cycle requires using a different set of tools and approaches.  Similarly, each individual business has its ups and downs.  Generally they follow the economy but this is not always the case.  Many new businesses emerge and come to life in a recession.  A new entrepreneur sees a need or identifies a trend and takes the idea to the market.  The market embraces the idea and so the business moves forward and grows.  If the idea is strong enough, it attracts others who also embrace the idea and so competition pushes and refines the idea; another emotion an entrepreneur needs to handle.

So being an entrepreneur comes with different emotional risks.  There are many more than the ones I have identified above.  However, to help an entrepreneur understand and manage the emotional risks, it’s my suggestion that the first main action the entrepreneur puts together is a life plan.  What is a life plan?

A life plan is a very broad and simple document that answers some basic questions.  They will vary with the individual and their situation.  Part of the reason for writing your life plan is so you can share it with the important people in your life and also as a place for you to come back to on an annual basis or as needed to remind you why you decided to become an entrepreneur, including your motivations.

From my perspective, this is critical.  We often decide to do something major in life at a certain point for reasons that make sense at that time.  However, our lives are constantly evolving and changing due to many external pressures, almost all of them outside our control.  To therefore have a document to look back at and jog your memory why you decided to become an entrepreneur can also help you decide in the future if your objectives have been met and it’s therefore time to try something else in your life.

Alternatively, it can be sustaining and invigorating to remind you why you decided to become an entrepreneur and allow you to refocus on that.

Just to repeat an earlier point, it’s important to share your life plan with those who are close to you.  Don’t share it too broadly as it may become a document others judge or hold you accountable.  It’s not a document of accountability, it’s a place to keep your thoughts so you can be comfortable with the decisions you are making.

Some of the thoughts to keep in your life plan can include what’s personally important to you and what you hope being an entrepreneur will allow you to do.  If it’s to support your family and allow you to also contribute to local society, include those thoughts.  If values are important to you, what values will you bring to being an entrepreneur?  What are your priorities and how do you intend to manage those priorities when they come in conflict with other priorities?  What should happen with the business if something happens to you?

The ultimate goal of creating a life plan is so you can become at peace with your decision to become an entrepreneur.

As I’ve mentioned, our lives are constantly evolving and changing.  We adapt every day to change.  Being able to easily and readily adapt to that change will be the main ingredient to your success as an entrepreneur.  Understanding why you decided to start that journey in the first place and being able to remind yourself about this will help you make the many decisions along the way and keep you grounded.  There is also great value in keeping your life plan up to date, at least on an annual basis.  Once again, it will provide a sanctuary for your thoughts in case you have to confront a major event or changes in your life such as a serious health issue, death of a loved one, divorce, birth of a child, a major change in the economy or any other unknown situation.

Owning and operating a business is a serious matter.  However, life is about fun, making mistakes, learning, growing and moving forward.  When owning a business loses its fun and no longer seems to fit in your life plan, it should be enough to tell you that it is time to do something else.

If selling your business is an option you are considering, this link will provide a simple summary of the steps..  If you would like more information then this link will allow you to buy and download a copy of my book Successfully Sell Your Business.

There is a US Court of Appeals judge by the name of Judge Learned Hand and he lived from 1872 to 1961 or until he was almost 90 years old. Originally from upstate New York, Hand graduated from Harvard Law School and became a lawyer. At 37 years of age he became a judge appointed to the Federal District of Manhattan and he became well known and respected for the quality of his judgments.

What caught my attention was one of the best quotes I’ve read regarding the paying of taxes. His quote is “…over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do it right, for nobody owes any public duty to pay more than the law demands.”

It looks like the campaigning for the 2012 Presidential elections has now started – some 16 months before votes can be cast. Perhaps it’s time to cancel your newspaper subscriptions and access to cable TV as the media are going to “entertain and inform” us with every happening. Wouldn’t it be nice to disappear for 16 months and come back on the day prior to the election and miss all this “noise?”

Regardless of your feelings about the above, what it is not time to do is ignore putting a business financial plan together. If you own and operate a business, just as it is important to have a personal financial plan, it is just as important to have a business financial plan not only for your benefit but also for those that work in the business.

Just as putting together a personal financial plan takes time, so too does a business financial plan. The place to start is by finding a qualified financial or wealth consultant to understand your business and the components you will use in your plan. The components you could consider using include:

• Medical, dental and vision health insurance – group or individual
• Supplemental health insurance
• Life insurance – group, keyman and individual
• Long term care insurance – group or individual
• Buy/Sell Agreements – with insurance funding
• Executive and employee fringe benefits
• Disability income insurance – group and individual
• Retirement planning – qualified and non-qualified

Other components to consider include debt management, property and casualty insurance and investment strategies.

Minimizing tax is good business. Minimizing tax and putting that money to work for the long-term is better business. The place to start is with a good business financial plan. What’s holding you back from getting starting?

One of the services I provide is a valuation to an owner that wants to sell their business. Almost without exception, the owner of the business overvalues their business. There are many reasons this happens but I think it mostly comes from business owners seeing shares trade on Wall Street based on the gross sales or gross revenue of the business. I have recently done valuations where the company value was just over $1,000,000 but the owner thought it was closer to $10,000,000.

Just as most business owners are unaware of the true market value of the business, most business owners are not sure how their business creates value or more importantly, how to calculate the value of the business or even the return on the investment made over the years of owning and operating the business.

In many cases, if not most, the business is the single biggest asset or investment of the business owner. To avoid treating the business as a ‘checkbook’ to pay the bills or as a job to feed the family and with little concern over the impact on either personal wealth nor the investment of time and money, the solution is to get a Business Assessment.

The Business Assessment looks at the strategies that build personal net worth as well as business net worth; maximizing the return to the business owner and their family. By understanding the value drivers of the business it then allows the owner to reduce the time and/or money in the operation or the amount of money they can extract from the business while still increasing the business net worth. The Business Assessment also provides clear data on historical calculations, forward looking “what-ifs”, and the growth of personal net worth to the owner so they can accomplish either a retirement objective or the next business endeavor.

If you would like more information about the different types of Business Assessment, click on this link.

If you would like to see a sample 182 page Business Assessment that reports at enhancing the value of a company, click on this link

To create the Business Assessment, we use proprietary software and this includes providing you with a limited license so you can see specific changes in the business and how this impacts your personal and business net worth. In addition, this software helps educate on the relationships between business value, personal net worth growth, and the specific sales, costs, overhead, and profit within the business and clearly shows how one number, large or small, can make a huge dividend towards any end game. A separate model demonstrates the relationships between business value, personal net worth, monthly contributions to retirement (or a desired level of liquid assets), and the performance of the business owners portfolio of investments to clearly demonstrate what they need to accomplish their overall life goals. Lastly, this software puts the acid test on the capacity to grow the business or shines a light on the underutilized capacity which has tremendous cost to the business and the owner.

After six months of licensed use of these tools, the owner can now focus on the direction of the business and operate with more effective objectives, and ensure the desired return on investment is managed with an ever watchful eye on the achievement of the end game.

If you have questions or would like more information, please feel free to call me on 916 570-2674 or email Andrew@RogersonBusinessServices.com

So many small business owners are buried in the minutiae of running their business they forget to step back, question where they have come from and why and then make sure they know where they are going. I am not talking about the direction of their business; I am talking about one of the most important assets of the business and that is, themselves. If something serious was to happen to them, what would that mean for the business? Can it continue? What steps are in place to replace themselves or any other key employees? If the business supports their immediate family what would happen to them and how would they survive? Perhaps the joy of running the business is declining and so it’s time to think about handing the business off to some fresh blood or find a new owner?

To help formulate an approach there are two key components to use. The first is an Estate Plan which can be a standalone process, or an Exit Plan which can include as one of its components an Estate Plan.

At its simplest level, for a business owner, an Estate Plan is a legal review where the assets a business owner accumulates over their life passes to the party the business owner chooses. In addition, part of the purpose of an Estate Plan is to move the assets in the most tax efficient way so the receiver avoids the burden of paying taxes or spending time and money paying taxes and thereby endangering the very assets the original owner is trying to protect. Remember the quote – an ounce of prevention is worth a pound of cure? That is the purpose of a good Estate Plan. And to make sure it’s done properly, an Estate Planning Attorney is the resource you need.

As a business owner moves towards retirement and winding down their day to day involvement in a business and sufficient time exists, an Exit Plan is a great tool. Its purpose is to capture all the critical components of a business to make sure the baton passes cleanly from the current owner to the next generation of managers or owners. For a business owner that has spent many years building their American Dream, it is a very emotional time as it includes reflection and looking back on where they started and what they arrived at and how they lived their life. At a practical level, an Exit Plan is about the future and ensuring the next generation continues the success of the business.

If your thoughts are moving to what you should be doing with your business and you would like a simple one page summary of the items to consider in an Exit Plan, please click on the following link The Many Steps in an Exit Plan.

If you are thinking of selling your business and want to know what items a buyer may want to review as part of their due diligence when buying your business, a 127 point checklist is available for free by clicking on the following link Business Transition Checklist.

As always, if you have questions about buying or selling a business, please give me a call on 916 570-2674 or send me an email to Andrew@RogersonBusinessServices.com

For many small business owners, the single most important document for their business is the lease. Unfortunately a lease is generally a long and fairly complicated document. Because of its complexity, many small business owners either accept what they receive or do the bare minimum. Here are some suggestions for you, in no particular order.

• If your lease is coming up for renewal and you wish to continue operating your business, you have a choice. Stay in your current location or move. If you are seriously thinking about moving, do an analysis to weigh up the costs and lost time to move. Landlords are very motivated to find new tenants so it’s definitely the right time to review your options.

• If you plan to move, consider getting a qualified Commercial Real Estate Agent that specializes in negotiating leases to help you. I am a member of the Association of Commercial Real Estate Agents or ACRE and they have experts in different market segments.

• As I just said, landlords are motivated at the moment. Even if you decide not to move and your lease is up, consider negotiating not only your current price but also the terms and conditions of your lease. For example, if you want to run the business for another two or so years and then sell, negotiate with the landlord that they will assign the lease and you will no longer be liable if the buyer defaults and does not continue paying the lease.

• Similarly to the last point above, if your lease has a clause that says the seller must pay a fee to the landlord to review and approve the buyer, have this clause removed. I’ve seen instances where a seller has introduced three buyers to the landlord when trying to sell their business and each time the lease requires the seller to pay a fee of $1,000. The total cost to the seller was therefore $3,000.

• Consider having a qualified attorney that does business law review your lease. There is a cost to you but if they can save you time, money or a situation you did not know about that can be a good investment. Some attorneys may even negotiate with the landlord for you.

With the economy still soft, now is the time to negotiate with your landlord. “Make hay while the sun shines!”

If you own a business and receive an unsolicited offer to buy your business please be careful. If your business is currently for sale be even more cautious. There are con artists that have developed a clever process of taking your business from you and leaving you not only with absolutely nothing, but totally destroying your business and leaving you in debt.

Here’s a basic breakdown of their process.

Their easiest target is to contact the owners of businesses for sale, usually via listings on the internet and identify themselves as acting for a private party or a small investment group. They are looking for businesses generally that have at least a $1,000,000 selling price.

If the business is for sale by a business broker or intermediary, they will try to build a strong relationship with the seller. If they feel the broker or intermediary is an impediment to what they are doing, they then try to get the broker or intermediary out of the way by saying to the seller that the broker or intermediary is a hurdle to closing a deal.

Once they have a good relationship with the seller, they then make a strong offer with the condition they finance the deal over a short buy out period (say 6 to 10 months.) The offer will include a small downpayment, say 10% down AND as a stock sale (not an asset sale.) Under this scenario, the seller holds all the stock of the corporation as collateral, and of course, the sale includes the cash, Accounts Receivable and other items on the Balance Sheet.

Once they pay the seller the 10% deposit, they then require signature rights to the business bank accounts, credit cards and other assets while the seller “trains” them in the day to day operation of the business for the agreed two to four week training period.

Once the training is complete, they then clean out the cash, run up the credit cards, factor the Accounts Receivable, may sell off some or get loans on the fixed assets (vehicles, etc.) and do not pay any payable/liabilities. They even sometimes fire employees, usually never paying any of the businesses (or employee’s) payroll taxes or other taxes. Then, they disappear in a month or so having cleaned out the company by taking everything as cash.

Bottom line: These scams really do exist. It’s another reason to make sure your business broker is part of a State Association such as the California Association of Business Brokers or association such as the International Business Brokers Association. If you are planning to sell your business, please give me a call so I can help you. If you want to know how to find a good real estate agent, the California Department of Real Estate has a very good document to read that you can see by clicking this link: http://www.dre.ca.gov/pdf_docs/re16.pdf