HireMyVA Podcast

HireMyVA Podcast 142- Why Should I Sell My Business Pt. 1

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Episode Summary

Do you ever think of selling your business? In this episode, we'll discuss the typical WHYs that drive business owners and entrepreneurs to sell their companies.

Here are some reasons why:

- Someday you may not want to do your business anymore, and thus you’ll avoid the mistake so many make, letting it die slowly and not actually taking advantage of all the assets you’ve built.
- Making it sellable means you’ll be creating it so that it can work largely without you.
- To get rewarded for all of your hard effort and investment.
- To force you to get proper financial systems in place.
- To maximize the value of what you’re delivering so that you can help your clients even more.

RESOURCES
========================
Episode 143 - Why Should I Sell My Business Pt. 2 - https://youtu.be/gWGKIW0X_hY
Episode 144- Why Should I Sell My Business Pt. 3 - https://youtu.be/hAGN1PPtAk0

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https://yoogozi.com/

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https://hiremyva.com

Need a website you can be proud of? Let us help you.
https://prowebsitecreators.com

Looking for a business mentor that will surely propel you to success? Check out Larry's site.
https://larrybroughton.me

Learn more about Larry Broughton
========================
Website: https://larrybroughton.me
Instagram: https://bit.ly/3vXPEoT
LinkedIn: https://bit.ly/3pIXjq8
Facebook: https://bit.ly/3pKVxEU

Learn more about Dave Braun
========================
Website: https://prowebsitecreators.com/about
LinkedIn: https://bit.ly/3EpvoQe

#HireMyVA
#VirtualAssistant
#SellingYourBusiness

Episode Transcription

Dave Braun
00:00:00
Hello, folks. Welcome to the HireMyVA Team and Business Building Podcast brought to you by Yoogozi.com. In this podcast and at HireMyVA, we help you to reclaim your freedom through hiring and thriving with Virtual Assistants without breaking the bank. And of course, that’s your bank. I’m Dave Braun, I’m here with Larry Broughton, my business partner with Yoogozi, and HireMyVA, a great friend, coach, mentor, all that stuff. Larry, what’s up, man?

Larry Broughton
00:00:29
Hello, sir. How are you?

Dave Braun
00:00:31
Doing great.

Larry Broughton
00:00:32
Thanks, Dave. It’s always good to spend time with you.

Dave Braun
00:00:35
Yeah, we have—

Larry Broughton
00:00:36
I’m feeling pretty chipper that we’re gonna see each other tonight with our little tribe of guys. It’ll be good to see you guys.

Dave Braun
00:00:43
We are. It’s gonna be great. All four of us, finally be together physically for it’s been like a few weeks.

Larry Broughton
00:00:53
Three or four weeks. Yeah. One of us has been zooming in each week for the last— It’ll be good.

Dave Braun
00:00:58
Yeah, he’s been on—

Larry Broughton
00:00:59
I hope you guys get a chance to do this. Man, I’m telling you, this get-together that we do every week where we hold each other accountable and share kind of our biggest challenges that we’re facing in life is really a good opportunity for each week to refuel. And so trying to encourage everybody that I know to be able to do this. Because if you’re a business owner, you don’t always have someone that you can confide in, or if you’re just going through life’s journey, battles, whatever it is. Boy, sure, it’s nice to be able to talk to someone that might not be your significant other, or might not be your, whatever. It’s nice to have a group. You know, twice during our little get-together, we remind each other that everything that we talk about there is held in the strictest competence. That’s just what we do folks, because we just encourage each other. This is an opportunity to be real and raw. And if you don’t have a group like that in your life, I encourage you to find one or create one. Why not just create one? That’s what we did.

Dave Braun
00:02:00
Yeah. And it can be 1, 2, 3, no, it’s gotta be more than one, but—with two. Right?

Larry Broughton
00:02:08
Okay. All right. Let’s dive into this, Mr. It’s good to see you, my friend.

Dave Braun
00:02:11
Yeah. You too.

Larry Broughton
00:02:12
Thanks for doing this.

Dave Braun
00:02:13
Well, you know, we got a really good question. And really, I think this question and the subject matter, we’re gonna, I think, divide it up into about three parts, could be four, depending upon how we go and what other questions we get. And of course, as we do these podcasts, some of these questions we can do quickly, or it makes sense to just do it in one episode, but I think this subject matter makes sense to break it up a little bit. Okay?

Larry Broughton
00:02:42
I’m intrigued. All right. What is it?

Dave Braun
00:02:44
So the question is, can I really sell my business? And if so, why should I sell my business?

Larry Broughton
00:02:53
The emphasis is probably on the “really” right? Can I “really” sell my business? This is very interesting, Dave because you and I were talking about this recently. Weren’t we? Where I had a conversation with a business broker friend of mine after reading the survey, I was shocked because sometimes this is a mindset thing. For me I’m always thinking about, okay, how do I position this business for sale? How do we begin with the end in mind? And how do I get the most value out of this thing? What’s the end game here? But I guess most people don’t think about their businesses that way. So I was a little shocked when I learned that most businesses don’t sell, they close.

Larry Broughton
00:03:45
I was stunned by that. Again, I’m in my own mindset, I’m looking at life through my own lens. And we’re dealing with coaching clients all the time, who we’d beat this over their head. In the example that I oftentimes use now and I may talk about this in the Victory Book. I know that I talk about it in the Victory Program where we talk about the idea that if someone were to walk up to you today, Dave, and say, I wanna buy your business and I’m gonna give you X number of millions of dollars for it, or hundreds of thousands of dollars for it or whatever it is, with the caveat that you are no longer in the business, like tomorrow you’re gone and the business needs to continue to run.

Larry Broughton
00:04:37
Could you actually do that? Could your business actually do that? And so why did we ask that question? Well, we started asking that question, Dave, years ago. Remember when people couldn’t even take time off, they hadn’t built their structure, they didn’t built their business. So they couldn’t even take a weekend off or take a vacation and things like that. And so the question is, can I really sell my business? Well, yeah, you really can sell your business. There are always people looking for businesses. In fact, I think for most people, it’s easier to buy an existing business than to come up with their own ideas and start something. For me, I do it all the time, but I’m more of a maximizer. I’d rather take a business that’s actually running and make it better than start something from scratch.

Larry Broughton
00:05:28
It’s just hard for me, the way my brain works unless I have a team of people around me who can help. Anyway, there are a lot of people like that, that would rather just buy an existing business, learn the business and continue to bring value to it. So can I really sell your business? Yeah. You can. And oftentimes people want to know how you do it. Well, that’s a big topic and maybe that’s one of the parts we can break off, like how to actually do it. But why should I sell the business? That could be an interesting conversation. Can I really sell it? Yes. You can really sell it. Why should I sell it? Well, maybe we should dive into that. Is that okay if we kinda go that direction or —

Dave Braun
00:06:19
Yeah. Let’s do that. One of the thing that occurred to me as you were talking about it, is it’s not just people that will want to, Hey, I wanna own a business, I wanna be a business owner, whatever, and I’m gonna buy somebody’s business. They could buy your business to expand theirs.

Larry Broughton
00:06:37
That could be, can I really sell my business? Well, yes, you can really sell it. It might be to a competitor of yours. Particularly if it’s a specialized business. Oftentimes specialized businesses, you can find different value points if you find the right buyer.

Dave Braun
00:06:58
Yeah.

Larry Broughton
00:07:00
So yes. You basically did that recently.

Dave Braun
00:07:09
Yeah. Actually—

Larry Broughton
00:07:10
You bought a volume of a book of business.

Dave Braun
00:07:13
In a way. Yeah. We did.

Larry Broughton
00:07:15
I mean, in a way you did, that’s what you did.

Dave Braun
00:07:17
Yeah, we did. And if we hadn’t had certain things in place, like thinking ahead about wanting to sell someday, then it would’ve been a lot more difficult or we would not have been as appealing at all to the other business to do this. So yeah.

Larry Broughton
00:07:34
So…

Dave Braun
00:07:35
Yeah. Let’s jump into it, Larry. Like, some of the “whys” behind it.

Larry Broughton
00:07:39
Well, some of the whys might be that you’ve busted your tail for all these years. And if you just change your mindset that instead of— let me back up for a second. Oftentimes people don’t even consider themselves a business owner. They just say, I’m a plumber or I’ve got this business or I’ve got a that, but I’m not really a business owner. Because what they see is that they’ve been trading time for money. What? That hit a button.

Dave Braun
00:08:07
Well, yeah, because you were talking about a plumber is the guy who’s done a lot of plumbing work for us. He doesn’t realize the value of some of the assets of his business. He’s not positioning himself to sell. Because, like you talked about a plumber, why you’d wanna sell your business? Well, one of the reasons would be you can’t physically do it anymore.

Larry Broughton
00:08:24
Yeah, that’s right. So, that’s one of the reasons why. But also it’s a reward. Putting all these years into it. And what oftentimes people don’t recognize, Dave is that there’s actual value. There’s value in the systems that they’ve developed and how they do things. There’s the relationships that they’ve had. There’s the client list. There’s the reputation. There’s real money there. And so, instead of just saying, Hey at the end of the day, I’m gonna stop taking a check from my business. I’m just gonna close the doors. The “why” is, well, because you may be leaving a couple hundred thousand dollars or a million dollars or a couple of million dollars out there in the ethers that someone else would be glad to take that over and be an apprentice of yours for X number of months, just as an example. And they take over the business for you. And there are all kinds of ways that you can capitalize on that, Dave. You know, they can pay you money right out the gate. They can give you zero money out of the gate, but they pay you over time. All kinds of ways to do that. And business brokers can help structure that. But that’s a “why”, a reward for instance for all that sacrifice you’ve had over the years.

Dave Braun
00:09:43
And even if you’re at the point where I don’t need any—I don’t need the money anymore. I don’t want to hustle. Well, somebody would love to have that money. Even if you don’t have family, you would maybe wanna give that money to a charity.

Larry Broughton
00:09:57
Sure.

Dave Braun
00:09:58
Somebody else could really take advantage of it, plus, if you are really well structured and it makes it easier for somebody who’s buying it. But one of the examples that came to mind was a car mechanic that we had for years—their auto shop. And they did such good work, they were honest, knew what they were doing, they had a great number of clients, but what ended up happening is— So, it was the husband and wife doing it. He would do, and with some other folks, do the actual work and she would do the bookkeeping and all that kind of stuff. But she eventually got like Alzheimer’s and was really— I think it was Alzheimer’s but really declining mentally fast. And because he didn’t have his business positioned for sale, even though he wasn’t thinking about selling it, he couldn’t, he had to devote his time to his wife and he couldn’t go back and rebuild up his business to really maximize the value. And it was very sad, very sad because he had—I mean, he had a great shop, all these tools, and all this stuff and I’m sure what ended up happening is, in fact, I know it, what they sold it for is a fraction of what he really could have gotten out of it.

Larry Broughton
01:11:21
Yeah. Stories like that are heartbreaking for me.

Dave Braun
01:11:23
Yeah, they are.

Larry Broughton
01:11:24
And this is why we’re always encouraging our clients to start setting up those systems as soon as you open the doors, and before you open the doors, begin with the end of mind. Because you never know when tragedy is gonna hit where there’s the death of a family member, illness of you or a family member, economic downturn, whatever. We just don’t know. But if those systems are in place, then your friend, the car mechanic, actually— Well, if she’s having Alzheimer’s, guess what? There are all kinds of financial burden that goes along with that. And wouldn’t it have been nice if they actually got more money out of the business versus just selling, as you said for pennies on the dollar.

Dave Braun
01:12:11
Yeah. What if they could have at that time and it’s like, uh-oh, we better sell this thing in the next two or three or four months and if they were positioned properly, then it would’ve been great to have that extra money to help with expenses and all of that stuff. So I guess Larry, one of the big reasons why to position yourself to really think about selling it, even though you’re not going to right now, is because you never know when something will strike.

Larry Broughton
01:12:35
Well, you don’t know when something’s gonna strike. And a way to actually help with that is to actually plan for something to strike. And maybe that strike is for you just take a bleeding vacation. How many business owners do we know that just don’t take vacations?

Dave Braun
01:12:49
And in one of the groups I’m in right now, somebody’s like, I am so freaking burned out. I gotta take a vacation. How do you do it without losing your business and all that. They’re already burned out. Well, now’s the time to set things up before you’re burned out. Because it will happen. You will go through those times. Right?

Larry Broughton
01:13:07
For sure. So if you start with that, like how do I get through, how can I take a long weekend, then, how can I take a week of vacation? How do I take a two-week vacation? That’s something. So there are a few reasons right there. Another reason to think about this and we go through this just about every year with some of our coaching clients and a couple of our coaching clients are Accountants and CPAs and they complain about this every year. It’s like, why can’t these people get their financial systems in order? How much easier would your life be as a business owner, if you actually had your financial controls in place? Because if you’re gonna sell your business, you’re gonna have to have your financial controls and systems in place, which means having cash flow statements and balance sheets and financial statements and inventory control, inventory turns and those types of things, all those things that your CPA wants to see when they do your tax preparation.

Larry Broughton
01:14:09
But we know people, I mean, frankly, and if you admit it, many of the people that are watching this are listening to this podcast right now, you know that your financial house is not in order. Just from a systems perspective. You may have money in the bank, but you don’t have the systems in place to monitor it. But if you’re gonna sell it, that does indeed bring value to the business because the potential buyer’s gonna say, well, gosh, if I can easily look at these financial statements and see what’s going on, I can trust the numbers I’m looking at. If I don’t have any financials, I can only make assumptions. And if I’m only gonna make assumptions, then I have to discount potential value on it. So that’s—

Dave Braun
01:14:55
So, what you’re saying is the person that would be buying it is absorbing some more risk. And the more risk that the person buying it absorbs, the less the price.

Larry Broughton
01:15:06
Think about if you’re buying a house for instance, and there’s a reason why you do all these inspections on the house. But if somebody says, I’m selling it as is, and you can’t even walk through the house. Are you gonna offer the same price as a house where you can’t actually walk through and test, make sure that the roof is okay and the foundation is good and there actually is wiring and plumbing inside those walls?

Dave Braun
01:15:30
Yea, it seems pretty obvious when you put it that way.

Larry Broughton
01:15:35
Yeah. So anyway, getting your financial house in order will actually help you when it comes time to sell. So why not do it now? Again, just think about the headache that you go through every month or every quarter, or every year with your accountant, when, if instead of taking a shoebox with all your receipts and then handing ’em to your accountant, you actually had. Even if something as simple as QuickBooks, financials’s done. Right?

Dave Braun
01:16:02
Yeah. And the advantage of getting your financial systems in order, obviously it’s gonna make your company more valuable for the future, but it’s gonna make it more valuable now because you’re gonna be recognizing places where you’re bleeding money as well as opportunities for future revenue.

Larry Broughton
01:16:19
Good, great point.

Dave Braun
01:16:21
So, setting yourself up now just makes so much sense for, like what we talked about, vacations, for an emergency that may come up, or maximizing the value of what you’ve got now, which is gonna help you even more now.

Larry Broughton
01:16:41
Yeah. I think maximizing the value is an important thing. We should always be looking at that. Shouldn’t we? How do I maximize the value to my own personal life and future? How do I maximize the value to the clients or the services that I’m offering? Because all of these systems are gonna help. How do you maximize the value to your team members? The more efficient their lives are, the easier it becomes, the more productive they become, the more profitably become, the happier they are, the more joyful they are, the better the guest and client experiences, all this kind of bleed together. But I’m glad that this question was asked Dave, and it’s just funny how the timing on these things work. So there’s something in the ethers out there right now. So hopefully, Dave people start to recognize that all the hard work and effort that they put into this, electricians, traders, solopreneurs, or plumbers.

Larry Broughton
01:17:36
I’ve got a buddy of mine years ago, who was an electrician up in San Francisco and he just busted his butt. He had his van and his house was—he had his garage, and his house was—he had all of his equipment, he just busted his butt day in and day out, didn’t work for anybody else. And he was out there constantly hustling for new team members, but I’ve always wondered like whatever happened—Steve Warner, if you’re out there, let me know. How the heck are you doing? But I’ve always wondered, like whatever happened to him and his business, because he was always trying to get a side hustle going. And if you look at, Hey, all of these hours of training and expertise and hard work and blood, sweat, and tears, you put into this thing, if instead of just trading time for money, there was actually a payday at the end, upon retirement, death or illness of a family member or illness of yourself. Boy, like I say, a couple hundred thousand dollars or a couple million dollars goes a long way in most people’s lives.

Dave Braun
01:18:41
Yeah. And it really does. And you know, you never know, man, it could be, oh my God, you could have to take care of an ailing parent, and you can’t devote your time to your business. So if you’ve got your system set up, you’ve got a team, you’ve got your financial systems in order. And we’ll talk about the “hows” later on in another episode. If you have all that stuff in order, you’ve got, one of the things that we talk about, Larry is you’ve got the freedom to make choices.

Larry Broughton
01:19:12
Well, that’s the key here, right? We’re trying to help people find more freedom. And by selling your business, yes, you can sell—I can’t think of a business, literally, I cannot think of a business where you can’t sell it for something, even if you may not get any money down, but you can get— There are a couple of ways you can negotiate. You can negotiate price, you can negotiate terms. I’d rather negotiate the terms and the price any day of the week. And we can talk about that on another podcast, I suppose someday. But even if your business is not profitable, there is very likely some kind of assets that your business has, even if those assets are past clients.

Dave Braun
01:19:53
Mm yes, absolutely. Yes.

Larry Broughton
01:19:57
There are a lot of ways to look at value. Even if you may have a business that’s not profitable, but boy crying out loud. Maybe one of your competitors would like to have your business, have your territory, have your clients. And who knows, by them gobbling up your business, do you really care at the end of the day? The economies of scale that they bring may just be that extra nudge that they get an extra 5, 10, or 15 points in profitability while all of a sudden it makes sense for their business. Because you know, some businesses need to get to a certain size and scale before they become very profitable. So there are a lot of people— So you may think, well it’s not profitable, who would buy my business? You may be surprised, and there are a lot of ways to sell. So maybe Dave, what we could do in one of the future episodes is talk about where would we actually list a business or how would we hire a business broker. If that was the way to go.

Dave Braun
02:21:00
Yeah. That would be really good. That would be excellent.

Larry Broughton
02:21:01
That might be something to do.

Dave Braun
02:21:03
Okay.

Larry Broughton
02:21:03
So can you sell your business? Yes. Why should you sell it? For more freedom to actually put some money into your pocket, to help another business owner who’s just been busting their butt and they’ve been looking for an opportunity. And boy, wouldn’t it have been nice when you were young when you started your business if you had something that was already partly built. So there’s a bunch of ways or a bunch of reasons on why you could sell your business. Frankly, you may be the only person who knows why. If I can tell you, you can sell businesses even if they’re not profitable.

Dave Braun
02:21:37
Yeah. And the reality is you will be selling your business in some way somehow at some point. You will, either to a family member or— Reality is your friend, as you say. So we are gonna physically, no matter what we’re doing physically, we won’t be able to do it someday. Mentally, we won’t be able to do it someday. We are gonna die or something’s gonna happen. That’s the reality. So why not prepare for that now? As opposed to awake.

Larry Broughton
02:22:08
That’s right. You just don’t know when something like that could happen.

Dave Braun
02:22:12
Yeah. I don’t want to end the episode on that dower note, but—

Larry Broughton
02:22:14
This could bring freedom. Yes, it can absolutely bring freedom. You and I have seen plenty of people who have sold their businesses on an upswing and they were able to do it because they had prepared for the eventual sale of it. And frankly, let’s be honest. There may be times where you try to prepare the business for sale and the right buyer is not there. And so you have to hang in there a little bit longer, then mystically, magically, the right buyer comes along. But had you not been prepared? You will never be prepared.

Dave Braun
02:22:51
Yeah. So, a good way to close up.

Larry Broughton
02:22:55
Okay.

Dave Braun
02:22:56
All right. Well, thank you everybody for being with us, and remember building a team is the way to reclaim your freedom. As we talked about in this episode, how important freedom is with your business. And of course, we’re here to help you with our Course and Community and our White Glove Service, where we find a Rockstar VA for you. So three things we’d love for you to do right now and we’d really appreciate it. Number one, subscribe to this podcast if you haven’t already done so, either on your iPhone or your Android phone. And on YouTube, hit the subscribe button. And then number two, give us a rating. We’d love to have a five-star but rate us what you can and give us a comment, especially on YouTube, say, Hey, I learned something or I have an additional question, or this point really made sense to me. Just put a comment in there because it will help you get the word out.

Dave Braun
02:23:46
It helps us with the YouTube algorithms. You know, when they see engagement, that’s what they want. And so we can reach more people. And number three, just go to Hiremyva.com for more information on our Course and Community and our White Glove service. And of course, we have a free checklist to learn what you need to do to properly prepare for hire and thrive with a Virtual Assistant. And remember, even without experience, you’ll learn how to prepare for hire and thrive with Virtual Assistants with us. So, Larry, we’re helping folks as we speak and we’ve helped a lot and we want to help even more. So guys, just go to Hiremyva.com for more information.

Larry Broughton
02:24:22
All right, my friends. Do yourself a favor and do the world of favor. Go do something significant today. God bless you. God keep you. God hold you. We’ll see you again next time.

Dave Braun
02:24:32
Bye, everybody.

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