Starting with the End in Mind!
Tips for Planning the Successful Sale of Your Business.
To many entrepreneur-minded folks, starting a business holds an immeasurable allure! The typical tract starts like any new romance, with spark and dazzle. We soon encounter the challenges of growing business, running daily operations and the work it takes to focus more on strategy and less on the ‘day-to-day’, the development of systems and delegating to a well-trained team. I certainly learned in my business that without a clear vision, repeatable systems, planning and perspective on how I wanted to grow my business, I quickly became caught up in day-to-day operations, synonymous to a laborious hamster wheel for an owner! As the allure of retirement or the desire for your next big adventure looms on the horizon, we owners find ourselves wondering how to transfer ownership of our ‘baby’. Business owners are sadly and too often ill-prepared.
I had the pleasure of attending a wonderful workshop, (sponsored in part by Prospera Business Network), conducted by Compass Advisor’s President, Bryce DeGroot and Fortis Group’s Co-Founder Christopher Gregory last month. This week I had the added delight of a sit-down chat with these two passionate business professionals, both of whom work to help business owners build an exit strategy toward eventual sale. Having just sold my Atlanta based event venue, Carl House in April, I was curious to learn what they recommended in the way of preparedness in selling a business so I might help my clients with some tips beyond what I learned in transferring ownership of my own.
Below are excerpts from my chat with Bryce and Christopher:
BB: As two similar, yet different organizations owned by the same parent company, explain why the differentiation.
Christopher: Both our companies work on a singular goal, to assist large organizations, (Compass Advisors) and smaller companies (Fortis Group) in making businesses transferable to new ownership.
BB: In short you are business brokers. What differentiates your brand and services as the intermediaries to help owners sell?
Bryce: To clarify first, I’d estimate that about 25% of our collective clientele are ‘serial’ entrepreneurs, big and small, who have bought, developed and sold organizations in the past. 75% are smaller, typically around 100K in discretionary earnings and higher, seeking counsel on how to sell their organizations. Our brand differentiation as ‘brokers’ is the way we work to coach and counsel our varied clients to ready them for sale. Additionally, unlike many other brokers, we as trusted advisors have over the years developed a ‘best practices’ process to support companies with whom we work. We guide our client’s toward a profitable sale having built a large national network to find the right buyers for our clients.
BB: Having recently sold my business in Georgia I understand the concept of starting with the end in mind which you mentioned in your workshop that I attended. Can you speak more to that point?
Bryce: We begin by getting to know the business owner and their goals. It becomes apparent quite quickly at what stage in the process they are in terms of readiness to a profitable sale. We administer a tools survey and value builder system to help owners diagnose and reflect where in the process they are.
BB: What typically do many business owners lack in order to sell quickly?
Bryce: If the business is dependent on the owner being important to the day-to-day running of the business there is work to be done in training other key personnel in taking over what the owner does. Creating repeatable systems that can be easily transferred to new ownership is another area that often needs attention. Both create value for any potential sale. We work with our clients and recommend ways they can improve in both areas, often suggesting coaching from key support partners with whom we work to assist in developing systems needed for sale.
Christopher: BB, we also work to assess the current profitability of any business we are looking to help sell. To speak to Bryce’s point, having the current owner out of the day-to-day operations creates added value with their salary alone which another owner can choose to take or redistribute toward other future growth initiatives. We identify these and other key areas of potential profitability.
Bryce: Our job is in part helping to ‘clear the fog’ and make a defined pathway to owners interested in retiring, passing their business on to a partner, family member or selling the business to a new buyer.
BB: With that said, your bottom line advice then to the business owner thinking about sale or transferring to a partner or family member is what?
Christopher: Start the process early. It’s never too early to begin to prepare for that transition. The greatest disappointment we experience from business owners is their wanting to sell but not being ready.
BB: So, starting with the end in mind, NOW!
Bryce: Exactly!!
BB: Thank you gentleman. I appreciate your time and the guidance you provide to organizations not just here in Bozeman, but throughout the country.
(For more information on how you can prepare your business for eventual transfer to a new owner, contact Bryce DeGroot, (Compass Advisors) at (406) 282-6000, bryce@compass-advisors.com or Christopher Gregory (Fortis Group) at (406) 404-8810 or christopher@fortisgrp.com.
For information on how BB can help you arrive at your next best business solutions, build better processes, clarify your company culture and vision, email her at bb@bbwebb.net to begin a dialogue and receive an assessment for taking your organization forward and YOU where you most thrive!