When to sell your business

Title: Meet Ryan - Age 50 - Events business

Ryan ran an events catering business for years. He had a unique catering concept that made him extremely well known in the industry and highly sought after. You could say, he was quite the success.

But he was getting burnt out. The long hours, the late nights, the constant missing out on family time and social outings with friends. Ryan was ready to move on.

He wanted to sell up and try his hand at another entrepreneurial venture…

That’s when he came to me and asked if I could help.

“Steve, I want to sell up so I can spend more time with the family & work on a different business venture. Can you help?”

So we sat down over a coffee and took a look.

Unfortunately, it didn’t look good...

Despite how well known he was in the industry for being an exceptional caterer, Ryan had made one of the oldest mistakes in the playbook. He had made the business all about him!

He was the one with all the contacts in the industry, he did the selling, the marketing, the negotiating, collecting money, paying bills and delivering the service on time and within budget. No wonder he was burnt out!

And because of the way he had built his business, it was virtually worthless.

The problem with building a business like this is that it’s only valuable if the business owner remains. If they leave, the business won’t be able to operate without them so it becomes worthless to a third party and therefore, virtually unsellable.

It’s a horrible position to find yourself in after years of investing blood, sweat and tears building up what you think is a successful business.

But it wasn’t all doom and gloom for Ryan. There was real value there and if he wanted to sell the business for what he thought it was worth, all he needed to do was replace himself with automated systems, processes and competent team members to take over the day-to-day running of the business.

So I turned to Ryan and said, “Look, Ryan, I can help. But, the business isn’t ready to sell today. It needs a lot of work.” And I outlined the reasons why… “Let’s work together for the next 12 months, get your business back on track so we can sell it for what it’s really worth.”

He agreed and over the next 12 months, I put Ryan through a business bootcamp to tie up all the loose ends so it was ready to sell to the highest bidder.

Here are some of the things we did:

●       Created and established a brand image in its own right (i.e. not just ‘Ryan’)

●       Implemented an automated marketing funnel, enquiry processes and booking systems

●       Introduced an efficient financial process to handle invoicing, payments, bills, etc, comprising of software and human resources

●       Hired & trained an effective team with the right incentives to manage new enquiries, existing customers, and deliver the same service Ryan had become so well known for - this made the biggest difference.

12 months later, the business looked completely different. With a better and more organised marketing & sales process, the bookings grew faster than we could have imagined.

We were able to double the turnover and create bookings as far as two years in advance. The order book looked good.

Because of that increased turnover and future order book, it gave Ryan the confidence to recruit full-time staff to manage the day-to-day processes within the business freeing him up to focus on the bigger picture.

Believe it or not, but he actually enjoyed working in his business again!

So I asked him, “The business is ready to put on the market… Things are going well right now. Do you still want to do this?”

That’s one of the beautiful parts of running a ‘real’ business. Life gets better because you’ve got more time. But to Ryan’s credit, he stuck to the original plan.

We put the business up for sale and surprise, surprise, there was plenty of interest. The fact that the business could operate virtually on its own made it a huge asset.

We found a cash buyer within a couple of months, signed the deal and Ryan was able to move on, start his new business venture and spend more time with his family.

The results:

●       Sales increased by 100% (￡600,000)

●       Net profit (EBIT) increased by 20% (￡60,000)

●       The business was marketed and sold at ￡145,000

If you’re in a similar position to Ryan, i.e. you’re looking to sell your business and move on, I can help.

I’m currently offering three FREE 45 minute strategy sessions to business owners who are specifically looking to sell up and move on. This is not general business advice. This is for serious business owners who want to sell their business for what they think it’s worth.