Assessments, Business Consulting, Sales & Marketing, Retreats, Speaking

Expert in Performance & Profitability

Expert in Performance & Profitability

Assessments, Business Consulting, Sales & Marketing, Retreats, Speaking

         

 

P.O. Box 41236
Tucson, AZ 85717
520.795.7498
520.795.7556 (FAX)

Contact Sharon

 

"Sharon is that rare individual - extremely intelligent and multi-talented,"
-- Hussein Kamel, PhD, Computer Structural Analysis, Professor Emeritus, University of Arizona


"I can say we would not have accomplished our goals without your assistance."
-- Chester Teaford, HDR, Inc.,
formerly, V.P., Michael Baker Jr., Inc.

 

 

Articles for Executives

Avoid Losing Money Selling Your Business

One of the first things you want to do is get a good idea of what your firm is worth on the market because not knowing can cost you a lot of money. Considering there 178 plus ways to valuate a business and the wide range of professionals vying to valuate your business, how do you get the information you need? Your first line of defense against losing money on the sale is to do some research. Talk with your management consultant, your accountant and your attorney. Do some reading and talk with colleagues who have sold their businesses. In this day of internet research capability there is no reason why you can't get enough information to make an intelligent choice. Do not chose a professional to valuate your business until you have informed yourself and know what and who you are choosing to set the base value on your business. You are not going to use this valuation as the gospel but it will be an important piece of information for you to keep in mind during negotiations.

Before you even entertain offers from prospective buyers or list yourself with a broker you want to understand the strengths and weaknesses of your business from the point of view of a potential buyer.

Your strengths will be your talking points - those points you will use during negotiation to add value to your base value - the intangibles of your business strength. Recently, I helped a firm identify their talking points. I asked the executives to come up with their list of things that they felt were real selling points for their firm. They came up with 7. I had worked with them as a management consultant for three years and I came up with 29 talking points. Why the discrepancy? It's the old "can't see the forest for the trees" syndrome. You need to work with your outside professionals because they can by definition of their relationship with your firm be more objective. Also, they are experienced with many organizations and have a basis for comparison and recognizing what you do well.

You want to identify your weaknesses before the buyer does and be prepared to discuss them. CEOs whose firms are publicly traded have a lot of experience with this because they have to justify weak spots and outright failures to stockholders. Private companies are not as well rehearsed on how to handle bad news. Tell your accountant to evaluate your financials as if he were doing preliminary due diligence for one of his clients interested in purchasing your firm. Identify your weak points and develop positive talking points for each item. For example, if revenue was soft in the third quarter be prepared to acknowledge it and also the action taken and the anticipated results.

Work with a coach or consultant brushing up your negotiating skills. Choose one who is familiar with techniques to quickly assess personality styles and adapt your presentation to the chief negotiators' style. Include topics such as where to sit in the room, determining who has the power, and how to control the negotiation.

Role-play with the executive team. Practice how you will introduce positive talking points and how you will field and overcome negative points.

There are other things to get you ready to go to market but if you do these five things you will spend about 20 hours of your time. In our experience this preparation will bring you at least 20% more on your transaction. Let's say $1,000,000. It could be worth $50,000 an hour to you. Don't lose it.

2009 Sharon A. Youngblood. All rights reserved.

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Youngblood Consulting, Inc.
P.O. Box 41236Tucson, AZ 85717
say@youngbloodconsulting.com www.youngbloodconsulting.com
 

 

Teleseminars

2009

 

 

       
     

2009 Youngblood Consulting Inc.