Today’s episode of the podcast, Robert Hirsch from Freedom Factory discusses “How do I Build the Machine to Work ON My Business vs. IN the Business?”. Running a business can be complicated as it needs a lot of work and effort. However, by working on it effectively will make a huge difference when it comes to selling it. Watch the video, listen to the podcast https://vimeopro.com/freedomfa…/business-brokers/…/389990100
Robert Hirsch from Freedom Factory talks about how to build the machine to work ON your business versus how to build the machine to work IN the business. Freedom Factory is the world’s best business broker helping entrepreneurs sell their business for maximum value. Visit Freedom Factory’s official website here: https://www.freedomfactory.com/
Do you want to sell your business? Contact Freedom Factory for a business appraisal.
Selling a business can be done in different ways. You could sell it on your own, hire a consultant, or a business broker. Each option has its pros and cons. Determining what type of industry you are in, how soon you want to sell your business, and how much you want to sell it play an important role in your choice. Watch the video to find out which one best suits your situation and which one can help you sell your business at a maximum value. Visit Freedom Factory’s official website here: https://www.freedomfactory.com/
6 Things To Do Today To Prep Your Business For Sale
7 Steps To Selling Your Small Business
An appealing offer can go southern in a split second (Freedom Factory). Just since somebody you know sold their organisation in a comparable market for $5 million does not indicate your's will. You'll require to seek out professional recommend Tyler Tysdal net worth, typically from a broker, to aid offer you a much better understanding of what your organisation deserves.
Various markets use different multipliers. Some are profit-based or revenue-based and also some are cash flow-based. An organisation broker will offer you a good manage on what your numbers look like in the market place as well as have the ability to provide some great criteria figures. Once again Tyler Tysdal, a company broker can be actually rewarding in this capability - Freedom Factory.
Look within your very own market for possible candidates that may be aiming to increase. Firms that you have a cooperative partnership with might see you as a good prospect to increase their customer base or an expansion right into a brand-new line of product. Take your time. A lot of purchasers will certainly have less than $200,000 to spend and also usually haven't possessed an organisation prior to.
How Do I Sell My company Quickly
Check out their motivations for purchasing - Freedom Factory. People who just see buck indications usually are not practical customers for small companies. It is possibly a good idea to maintain the sale of your service quiet from most of your company. Letting also much information out might cause a panic as well as see vital workers hurrying to find brand-new work.
How To Sell My Own Business
Rather, generate a few essential people you count on. Get them to purchase into your vision and strategy for the sale. When the time comes, they can help alleviate any type of worries staff members may have and be able to steer the ship in the appropriate direction. If a buyer senses a possible mutiny, the offer will certainly be off.
With the large volume of businesses hitting the marketplace from boomers looking to retire, competition for the attention of professional buyers with sufficient resources to shoot will be intense. Just those that have put in the time to examine their business and also make the suitable changes will reap the benefits.
Ways To money Out of One's Business
For several entrepreneurs, the thought of building a successful company and also at some point offering it for numerous dollars represents the business dream. You can raise the chance of accomplishing this objective by taking particular steps to prepare your company for a successful merger as well as procurements deal (sell my small business). The complying with ideas represent the actions I took to successfully sell my previous business to eBay (NASDAQ EBAY) in 2009: Expand your profits.
Sell My Business - 8 errors to Prevent When Selling (In 2020)
Do not be excessively drawn in by leading line (gross) profits, as the bulk of acquirers will certainly simplify your profits to net or EBITDA (earnings before passion, taxes, devaluation and amortization). EBITDA is likely to be the statistics made use of for evaluation purposes. Ensure you do everything you can to expand this number.
Why And How You Should Build Your Business To Sell
Button up your publications. An audit or expert evaluation of your financials is likely to be called for as part of an M&A procedure - sell my small business. For that reason, you need to take into consideration getting one or the other finished (by a trusted bookkeeping firm) sooner as opposed to later on. An official review or audit will certainly additionally offer your buyer confidence concerning your revenue and will inform you on what a GAAP audit/review resembles.
For M&An objectives, concentrate on what the acquirer is seeking. Establish up a revenue juggernaut. Set up an earnings juggernaut (with rather unknown potential) that will certainly allow you to obtain a greater several. The juggernaut ought to be software program when possible (deal based and/or returning revenue). See to it your juggernaut has an aggressive money making method.
Can I Sell A Portion Of My Business?
Don't permit shocks to find up during due persistance. If there are any potential fires, placed them out before getting in an M&A process. Address problems come tidy with anything that a purchaser may consider "shady" as well as have a brief (60 seconds max) description for the concern or discrepancy. There is absolutely no factor to excuse anything that occurred in the past.
exactly Where Can I Sell My company
Discuss and also go on. Placed together a 3-year monetary projection. It will certainly be necessary to established 3-year monetary estimates. Make sure the numbers you job are possible (broker to sell my business). Striking your economic projections will be absolutely essential once you start the M&A procedure, including due diligence and negotiations. Hitting/beating economic estimates is fantastic while in the M&A process; missing monetary forecasts can stop the procedure or seriously jeopardize the value of your sale.
Any type of potential buyer is mosting likely to look carefully at the development capacity of your company. For that reason, before and during an M&A process, it makes tactical sense to grow your sales initiatives, which might mean hiring additional sales associates and also increasing your general investment in development campaigns (Tyler Tysdal). Create a SWOT analysis.
Your possible purchaser will certainly attempt to poke openings in your organisation, because they will certainly wish to obtain the very best price possible. Be prepared to concentrate on your strengths as well as possibilities and protect your risks and weaknesses. Increase your exposure. Prior to as well as during your M&A procedure, you must make the most of whatever opportunities are available to increase the exposure of your company.
Create a list of all your prospective acquirers. broker to sell my business. Make certain to include the evident (comparable organisations) and also the not so obvious (companies that would profit from your services). Treat this checklist like a sales checklist research study the firms, present on your own, review calculated partnerships and also always keep your possible buyers in the loop on your turning points.
Entrepreneurs tend to combine individual and also organisation properties for convenience. Nonetheless, for purposes of M&A, you need to get rid of commingling and make sure that you are paying yourself an income large sufficient to cover your standard expenses and also delight in a feeling of financial security. When bargaining throughout an M&A procedure, demonstrate a background of settlement.
6 Things To Do Today To Prep Your Business For Sale
M&An experts will certainly do a whole lot of the heavy lifting in order to pitch your business to interested purchasers. For starters, an M&An expert will aid you prepare a teaser file as well as administration presentation for your organisation. They will likewise help you better comprehend and present your financials. As soon as you prepare to head to market, the expert will make phone call to possible purchasers as well as set up firm management meetings.
Which Contract Structure Is Best to Sell My Business
Visit Freedom Factory for information about
Sale of Business ContractBeing able to successfully articulate your past, current, and future economic efficiency is critical to a successful M&A procedure. Have an experienced controller or CFO on personnel to aid with economic analysis and also monitoring. Cut the fat - sell my business online. Thoroughly check out your expenditures as well as ask what "fat" can be reduced to enhance EBITDA, margins and also overall earnings.
Meticulously consider your existing source allocation. Can you move sources from one area (reduced profit/EBITDA) to greater executing areas?Consider choices to M&A. Selling your business is just one of lots of ways to attain a liquid occasion. Alternatives to M&An include equity capital, partial liquidation (drawing some chips off the table, yet proceeding to construct for a larger acquistion), or raising mezzanine or bridge loan (usually in the type of a loan with some equity; payback terms are usually tied to an eventual sale).
February 21, 2013 6 min reviewed Point of views shared by Entrepreneur factors are their own. Are you seeking to market your organisation this year? If so, below's some great as well as trouble. Initially, the trouble. If you're aiming to market today, you possibly won't obtain amount, as it takes a great year of prep work to market prior to you in fact put your company on the marketplace.
And also, if you in fact make the effort to prepare your company for a sale, you'll greater than likely jump to the top of a customers' short listing, just due to the fact that most vendors don't do the appropriate "prep job" to make the sales procedure very easy and also transparent. So exactly how can you ideal established yourself up to win when you sell your company? Right here are some pointers to get you headed in the appropriate instructions to receive the most effective worth for your company by the end of the year.
The very same holds true for your service. You'll intend to run for the following year with great financials, so maintain your paperwork up-to-date and also document whatever. Robert Hirsch. Lay out every responsibility of each task and also consist of vital efficiency indicators that clearly establish what is anticipated of each gamer and group.
Today’s episode of the podcast, Robert Hirsch from freedom factory talks about What How do I Connect to My Purpose with My Business? Listen to the podcast. https://t.co/OntPtx36wx
Hi Robert Hirsch again, and I want to talk to you about
something, which is a question that we get a lot, which is small
business consultants. Should I hire them? Do I hire them before
selling? And I must admit I’ve got a bit of a conflict on this. I
was a consultant for a long time, both a management consultant as
well as liquidity consultant.
So, just understand my bias before we get too far into it. So a
lot of consultants have relevant experience, but what very few
consultants have relevant experience in is selling their business.
What hasn’t worked well that I’ve seen in the past is when someone
has a general advisor and they’re giving them general information,
which may or may not help the valuation.
And usually in that handoff is where we lose a lot of value,
meaning the advisor gives the advice, the company implements it,
but it doesn’t make any difference in valuation. So if I was to
hire a liquidity consultant, I would make sure that they sell
businesses full time and don’t do anything else. I would make sure
that they’re a licensed broker and I’d make sure that they can take
you from consulting before you take it on the market all the way
through a successful sale. And so I would find a licensed broker
and be able to do that.
The other thing that I think is pretty critical is I would make
sure that someone speaks your language. For example, I’ve seen a
lot of miscommunication when an entrepreneur tries to work with a
banker and they find out that entrepreneurs don’t speak bankers and
bankers sure don’t speak entrepreneur. So find a broker that is an
experienced entrepreneur that’s been doing it for a long time, that
speaks your language and that’s going to give you the best results,
which is going to maximize your sales price.
Now, if you have questions on this or anything like it, feel
free to reach out to us at Freedom Factory and we’ll see you
soon.
Entrepreneurs make money by selling products or services to customers. What differentiates a successful business person from an unsuccessful one is his ability to connect his purpose to the business. Great business people use business as a Trojan horse to their goal. That way, the company becomes not just a source of income but a source of inspiration and motivation. If your business doesn’t connect to your business, then you must watch this video. Visit Freedom Factory’s official website here: https://www.freedomfactory.com/
How do you sell your business for maximum value? Robert
Hirsch from Freedom Factory, discusses the Secrets of Selling
Your Business for Maximum Value”.
Listen to the podcast, watch the video, or read the
transcript below.
What are the Secrets of Selling Your Business for Maximum
Value?
Hi, it’s Robert Hirsch from Freedom Factory. And I wanted to
talk to you about a really important subject. And these are really
the secrets of selling a business for maximum value. And so, at
Freedom Factory, we do a lot of the work for you in terms of what
it takes to be able to sell your business.
And we have a great partnership, and I’ll get into that in a
little bit, but more than anything else what we do is help you
craft your best story, and when you’re crafting a story, it needs
to make sense to buyers. It needs to make sense on why you’re
selling, why you started it, why the business has grown.
What are your sustainable competitive advantages or your key
differentiators in the marketplace? Some people call that unique
selling proposition, but we need to create a story that answers
more questions than it creates. When you create stories buyers hit
the brakes and it slows down. As we’ve talked about a lot, time
kills all deals. So it’s really working with the right broker
that’s going to help you craft that story. Also, when you’re
selling your business, be super authentic and true to who you are.
We’re in my backyard now in the mountains of Colorado, and it is a
gorgeous, yet slightly chilly all day. I was up here and we’re
thinking about it. I’m answering these emails and I’m like, . Why
don’t I just go outside and shoot a video and I’m not in the
office. I put on a sport coat because it was cold. But I get to
authentically be myself. And when you’re authentically yourself,
people can feel it and hopefully you feel that now.
And when you’re selling your business, we want
to make sure your buyers feel that. That’s unbelievably important.
And so I often talk about when you pick a broker, it’s a
partnership. You need to make sure the business is going. The
number one reason that deals fall apart is because something
changes. Your sales drop off a cliff. You don’t hit your
projections, et cetera, et cetera, et cetera.
You want to make sure that every time you give a buyer a set of
projections, you need to have an already hit. I speak virtually,
but you want to make sure that you’re going to hit it otherwise,
just be a little less optimistic. But we want to create a track
record of success with our buyers where we systematically exceed
their expectations. I’ve had sellers tell me at the end, they say,
Robert, this is my best sales month ever. Do I really want to sell
it? And I’m like, Huey, this is exactly the time to sell it. You’re
on a high, you’re on the home stretch, you’re selling it for
maximum value. And this is just making the buyer feel more
comfortable with their decision.
And not only are you getting paid once, but you’re getting paid
once, plus your multiple, right?
So if you sell it once, you get the money from that. If you sell
it on a four times multiple, you’re actually making five times
that. It’s great. These are the best problems to have. When you
have a business broker, you want to make sure that you find the
best one that’s going to be able to drive the most value. We’ve
taken businesses and been able to reposition them. We’ve been able
to recast their financials. We’ve been able to literally over
triple the selling price of the business to what they expected
coming in from their EBIDTA.
This is really different than a realtor or a broker for real
estate. Ultimately when you’re selling real estate, you’re limited
by the appraisal value. So even if you have the greatest broker in
the world, it’s not going to make that much of a difference
compared to at an average broker, maybe five or 10% but when you’re
talking about doubling or tripling your price, you need to take all
the information that’s available to you. Put it together. Find the
right partner, and then go to market together.
The broker, he or she is going to be selling your business. And
that’s all we do here at Freedom Factory. You the entrepreneur, are
going to be running your business and making sure that we stick the
landing to drive it through to a successful completion. If you have
questions on this or anything like it, why don’t you give us a call
here at Freedom Factory? We’d love to talk to you about it. I’m
Robert Hirsch. Thank you so much for spending your valuable time
with us and we’ll talk to you soon.
How do you sell your business for maximum value? For someone selling a business, your goal is to sell it at a maximum price possible. Unfortunately, not all businessman who sells their business sells it for the highest price because many factors can make or break the deal. There are secrets to maximizing your company’s value when selling, and that’s what you’ll learn in this video. Visit Freedom Factory’s official website here: https://www.freedomfactory.com/
How can you leverage other people’s money for buying a business? Robert Hirsch from Freedom Factory discusses frequently asked questions by business owners, and people who want to start a business.
How can you leverage other people’s money for buying a business? Robert Hirsch from Freedom Factory discusses frequently asked questions by business owners, and people who want to start a business. #business#entrepreneurship#startbusinesshttps://t.co/zCXeC5RVp1
Hey everybody, Robert Hirsch from Freedom Factory here, and I
want to answer a question that we get a lot, which is, how do I pay
for a business. Now after doing this almost exclusively for 20
years, all you do is see these deals go through. And what looks
normal to me is really different to a lot of my fellow
entrepreneurs.
And so I was with a group of entrepreneurs speaking to them last
night. And what they told me is they said, Robert, I don’t have 2
million sitting around to buy a business, you know, maybe a private
equity guys or venture capital guys, or more successful
entrepreneurs. But that’s not me. And I thought about it and I gave
a little bit of a chuckle and I realized that they’re probably not
the only entrepreneurs that think this. And so I wanted to talk
about different ways to pay for a business. So there’s a couple
ones that are pretty interesting. You can do it either through
equity or through debt. Right?
So let’s start with equity. So equity, you can
put together an investor round to acquire a company. You can secure
it by the business. For me, I do better with just a few investors,
not a lot of little ones – the friends and family. And that can be
nice for smaller things.
But for me, I like one or two sophisticated investors if I’m going
to raise an equity round. But the reality is, I think for most
businesses this size, I liked debt for in 90% of applications, and
we can talk about what the difference looks like in a little
bit.
So there are different types of debt. My favorite kind of debt
when I’m buying a business is seller financing. So if the seller is
selling a great business, and you’ve probably seen some videos of
mine talking about the difference between you’d rather buy a great
business at a good price and a good business at a great price. So
if you’re selling a great business and the seller is confident in
their business, they’ll be happy to take a note on it.
Sometimes it’s as little as 10 or 20% when you’re trying to
bridge the gap. Sometimes it’s as much as 90%. I’ve seen 90% solid
carry just secured by the business, and if you’re not successful,
the business goes right back to them and they like their business.
So they’re happy to do that.
There’s also bankers, but it’s so funny, the old Axiom about
bankers wanting to lend you money, when you don’t need it, and
don’t lend you money when you need it. In my experience, that’s
been true. If you’ve got a successful business, the lending of
money on it, but they’re going to want you to collateralize it with
your other business in most circumstances.
So bankers are there, and if you’ve got a great banking
relationship, maybe it works out well. But what I’ve seen work out
the best is small business loans or SBA loans, small business
administration loans. And you can do it as with as little as 10%
down. So if you’re buying, let’s say you’re buying a business three
X and it’s 2 million, that means it throws 666,000 a year in free
cash flow.
And if you can buy that for $200,000 you look at stock
valuations and things along those lines, but when you’re buying a
business at three X and you’re putting 10% down, as an
entrepreneur, I can’t think of a better deal than that. An SBA
loans had their own restrictions. You have to put a personal
guarantee on it. I think they cap it at $5 million currently. We
can talk you through all the complexities of what that looks like,
but SBA loans are great. And then, the big thing in terms of the
plan that you put together is talk about your stupid human trick or
the one thing you do better than anybody else.
I’ve talked about it many times in the past and I’m pretty good
at sales and marketing. That’s all I do. All I do is sell
businesses. And if I look at a business that has a superior quality
product but a sales problem, well that’s a great fit for me because
I can fix it like that. Or maybe you’re a software engineer from
MIT and you can build great software programs and you’ve got this
business is on fire, but your software program is held together
with duct tape and bubblegum. Well, you can come in and solve that
problem right away. So when I buy a business, I try and be
strategic about buying a business that fits my skillset.
And remember, when you’re buying a business, you don’t have to
have $2 million to write a big check. And sometimes ironically,
buying a business is cheaper than building it yourself. If you’re
buying 666,000 and free cash flow for 200,000 I would have a hard
time building it for that. So I hope this stimulated your
creativity.
If you have any questions about that, why don’t you give us a
call up, freedom factory or anything else and we’ll be happy to
walk you through it. I’m Robert Hirsch. Thank you so much for
watching. Please like and
subscribe and we’ll see you soon.
Today’s episode of the podcast, Robert Hirsch from Freedom Factory discusses “Key Difference Between Owning a Business and Owning a Job”. Do you own a job or a business? Many entrepreneurs don’t recognize the difference between the two. If you are a businessman, it is essential to know how your company performs if you’re physically there and if you’re not. Listen to the podcast or watch the video here https://vimeopro.com/freedomfa…/business-brokers/…/389990100
Do you own a job or a business? Many entrepreneurs don’t
recognize the difference between the two. If you are a businessman,
it is essential to know how your company performs if you’re
physically there and if you’re not.
That way, you can find out if your business continues to profit or
not. There’s a litmus test to find out if what you have right now
is really a business or just a job.
Listen to the podcast, watch the video, or read the
transcript below.
Hi, Robert Hirsch here from Freedom Factory, and one of the most
frequent questions we get is, can I sell my business? And the
answer is always yes. It just depends on what’s the price. And if
you own a job, it’s very difficult to sell. And the multiple is
usually one or less. And if you don’t know whether you own a job or
you own a business, there’s a really easy litmus test to find
out.
Just don’t show up for a few weeks. If your income stays the same
or goes up, you’re on a business. If it goes down, you own a
job.
The good news is there’s a lot of value to be
created by taking people that own jobs and transition to them, to
people that own businesses. And what I mean by someone that owns a
business or a business that holds its shape, if you will, when
you’re not there, when you’re not the primary entrepreneur, you
have systems and processes and employees and team that makes sure
that you generate as much value as you can. So let’s jump into
that. Let’s jump into what that looks like. So again, if you’re not
sure if you own a business or you own a job, just don’t show up for
a couple of weeks. If your income stays the same or goes up, you
own a business. If it’s lower, you own a job.
The good news. If you own a job, you can transition it to a
business pretty easily. What you want to do is build your
operations manual, your systems, your processes, and your team to
get yourself out of the traditional workflow. So you’re working on
your business and not in it. If you need any help with processes
like this, just give us a call at Freedom Factory. Thank you so
much for watching. Please hit like and subscribe and we’ll
see you soon.
Hi everybody. This is Robert from Freedom
Factory and I want to talk to you about it a pretty serious topic
today, and it’s the biggest reason that deals don’t close. Now,
personally, my close rate on deals has been really strong over the
last 10 or 15 years, but I see a lot of people, you know, the
industry standard, they close less than 50% of deals.
So, it’s almost unbelievable when you think 50% of people that
agree to pay a price for a business don’t actually buy it. And I
want to jump into why that is, and more importantly, how can you
can make sure that doesn’t happen to you. So first of all, when the
biggest reason that I see that deals don’t close is usually when
the numbers drop off a cliff.
And the reason that happens is because the entrepreneur is
trying to do too much. So as running a business as an entrepreneur
takes a lot of work, and when we sell a business, we’re partners
for a short period of time. I talk a lot about our 147-day selling
process and a lot of times it works in that time. Sometimes it
takes a little bit longer, sometimes or even faster. But the number
one thing when we’re selling your business is to let us do our job
as you have to do your job and make sure the numbers are still
going on the same trend line that they were. If you’re growing at
3% a month. The this time can be the absolute most important time
for you to do it. Not only because you get paid the best. What that
means, for example, let’s say, you’re selling your business on
earnings and you’re getting a multiple of five times earnings. When
you sell it, you’re actually getting paid six times on every sale
you ever make, which means you’re getting paid once in the cash and
five times you’re earning is when you sell it.
Now, if you were making six times your usual value when you sell
a business, do you think you would sell harder? I sure would. And
having the right broker and the right partner to be able to sell it
for you, we’re going to handle the process. We’re going to handle
the phone calls. We’re going to handle the Q and a, the
diligence.
We’re going to prequalify your buyers. We’re going to take all
that off of your plate. In fact, until the buyers had been
prequalified, and we have an LOI on the table, we don’t even put
them on the phone with you. We want to preserve your time as much
as you can so you can run your business as profitably as we can,
and we can do our job.
And again, what we do at Freedom Factory is make sure to build
as much deal tension as we can. So that’s getting the most people
introduced to the business, either through a combination of inbound
or outbound and marketing materials going through a Q and A process
and getting all the buyers to go to our process, meaning the
sellers process.
We do Q and A here. We do prequalification here; we do LOI’s
here. We start to go through and we get the funnel and we find the
perfect buyer and the perfect fit for you. Bottom line is the
partnership’s pretty simple – for the next year, you run your
business, we focus on selling your business.
When you’re talking to a broker, you’re making the right decision.
Try and find somebody that’s not just a sales guy or just sells
businesses for a living. Find a career entrepreneur; someone that
speaks entrepreneur, somebody that understands that. Just because
you’ve built the business and got it to here doesn’t mean that you
want to run it for the rest of your life.
Sometimes as entrepreneurs, I look at us as the producers or the
builders or the contributors, and, and if I’m not on point and on
passion in my business, you can feel it. And it’s not the same
thing. And so if you’re an entrepreneur that has a business that
you’re no longer passionate about, just because you took the train
to Chicago, doesn’t mean you want to drag the train around with you
once you get there. Give us a call and we’ll be able to help figure
out the best way for you to transition to something you are
passionate about so you can build massive, massive value.
One other truth is that time kills all deals. And every deal
goes sideways. We have buyer’s remorse. People often talk about
it’s the house as the biggest purchase you ever going to make.
Well, that’s not true if you’re buying or selling a business. Often
for me, buying and selling a business is the biggest purchase, or
is the biggest purchase or sale that my clients are ever going to
make.
And the more time you have, more likely the buyer is to have a
little bit of buyer’s remorse. Or if one little thing goes wrong,
maybe they latch onto that, we have a bad month or bad week, and
they use that as an example of why the business isn’t as good as
they thought they would. So at the best-case scenario, they’re
going to try and buy it for a little less of a price, which isn’t
going to feel good to you, the seller, or to me, the broker. And
the worst-case scenario is they just back off and they go dark and
they don’t want to do it and they pull it out of escrow, and then
we have to begin the process all over again.
So again, when you, when you look at these types of things, what
I’ve found in 20 years of doing this is every deal is going to go
sideways at least once. And that’s where my experience comes into
play. That’s where we can get it through. I’ve seen deals go
sideways for every reason you can think of yet I still get
surprised and see new deals go sideways all the time. We’ll get you
through it. We’ll keep a smooth, steady hand. You keep running the
business and keep the fundamentals going up and up and up, and
we’re going to sell your business for more than anybody else in the
marketplace.
Now, if you have any questions on selling your business, why
deals go sideways or what the process looks like. Why don’t you
give us a call at freedom factory? We’ll talk you through that and
any other questions that you might have. Thank you so much for
watching. Please like and
subscribe and we’ll see you soon.
A seller’s goal is to close the deal the soonest time possible. Great deals are a win-win situation for both the buyer and the seller. However, selling a business is not always a smooth sailing process. There are factors that cause the deal not to push through. As a seller, it is a must to know what these reasons are and avoid them as much as possible. It only takes a single mistake to break the entire deal.
Robert Hirsch from Freedom Factory talks about whether you should ‘Grow a Business or Buy a Business’. Watch the video, listen to the podcast, or read the transcript.
Hi Robert Hirsch from Freedom Factory, and I want to talk to you
about something that’s pretty important for an entrepreneur. And
frankly, I don’t think most entrepreneurs consider, which is when
they want to grow their company, do you want to build it or do you
want to buy it or growth by acquisition.
Now, historically, a lot of entrepreneurs haven’t really
considered it, and the reason for that is that buying and selling
small businesses has been a pretty inefficient asset class. It’s
hard to find the right one. It’s hard to find a real one. It’s hard
to know what business you’re in. Not a lot of brokers really
disclose a lot of meaningful information and unless you’re applying
EBITDA of 5 million or more, you don’t necessarily view it that
way.
But I’m here to tell you that that’s not necessarily the case
anymore. Money is made on the buy and you want to, you want to find
something at a fair valuation. Warren buffet said it, I think best.
He said, I’d rather have a great business at a good price than a
good business at a great price.
I think what he means by that is an exceptional business with
this sustainable competitive advantage will always be worth more
than an average business. Again, when you’re looking at it, you’re
trying to think, okay, how do I find a great business at a fair
price? So at Freedom Factory, we really specialize in selling great
businesses. If you can find a great business at a good price, it
can make a ton of sense. There’s two other points of leverage that
you might want to consider. One is if you have a complementary
product set or a complimentary customer set. And what I mean by
that, let’s say you sell phones and you’re looking at buying the
headset company, or buying headsets to would plug right into your
phones. Your existing customers would be interested in it. And if
you could get a 10 20% take rate on that, you might be able to pay
for your business in less than a year if you bought it at three,
four or five times earnings.
The other thing which I talk about more in other videos is what
I like to call your stupid human trick. Or really, that’s the one
thing that you do better than anyone else. And everyone’s heard of
the 80 20 principle, right? 20% of your work delivers 80% of your
results. Well, when you get to an expert level at something, in my
experience, it’s really turned into 95 -five. So 5% of my work
delivers 95% of my results.
Now, that can really multiply your efficiency and efficacy in
your business. And what I mean by that is if I could do that 5% 20
times, I could deliver 20 times the business results that I could
otherwise. So let’s land the plane and talk about exactly what I’m
saying. So let’s say, for example, for me, my background is in
sales and direct response marketing.
So if I can find an engineering company with a superior quality
product that’s extraordinary, that has a sales problem, I can
probably dramatically shift the line by focusing on fixing the
sales and marketing problem, which comes really naturally to me,
and allows me to make huge differences in your company.
So for example, we’ve had clients that have bought companies at
four times earnings, and they’ve paid for itself in less than nine
months because you use that stupid human trick to really
dramatically shift the line on your business. Going back to build
versus buy. I know it’s been an inefficient market class, but you
don’t always have to build organically.
Money’s made on the buy. Look for great, great businesses. See
if you can find businesses that are complimentary to yours. Maybe
it’s a luggage company and you have a travel site. See if you can
plug it into your existing customer set, or you can plug your
products into their customer set.
And finally, as entrepreneurs, we all do a lot of great work on
figuring out our stupid human trick. And there are a lot of tools
for that – Kolby, Meyers Briggs, figuring out your profile and what
that looks like. A lot of people like the enneagram model, but
whatever you can do to sharpen and hone that edge of figuring out
what you’re best at and making sure that you can leverage that in a
business, can provide dramatic results and make buying a business
really makes sense. If you have any questions on a great business
for you or under stupid human trick, why don’t you give us a call
it freedom factory? Thank you so much for watching.
