Maximize Selling Price Of Your Business

Copyright Jeff Haltrecht | family business advisor 2011
10 Ways To Maximize
The Future Selling Price Of Your Business
Tuesday, June 14, 2011

“Why Should I Be Thinking Of Selling
If I’m Not Ready To Sell?”

‣ Every business should be sold or
transitioned at some point, yours
included. ‘When?’ is up for debate.

‣ But when that time comes, you need to
have put in place a number of

items in order to maximize the money
you will receive from the new owner
(regardless if that person is family or not).

‣ Waiting until you are ready to sell may
prove to be too little, too late to
maximize the value of your business.

2


Its Incredibly Hard To Predict
When To Sell The Business

‣ The right time to sell is easy in
hindsight. (It was at the peak of a 5-
year sales run, right before the competitor
introduced a new product!)

‣ It’s hard to predict the future,

knowing what that competitor, customer,
or market trend will do to your sales. This
is probably the most unnerving part of
owning your own business!

3


When Your Gut Says Its Time
Then Its Time

‣ No… the right time to sell is when
your gut says you have given
everything you can to making this
company the best it can be.

‣ You know in your heart that someone

else will be in a better position to
build on your legacy long-term.

4


Be Prepared For When Its Right;
Put Things In Order Starting Today

1. Do one thing really well
2. Remove yourself from selling the company’s services
3. Build leaders that will make effective decisions without you
4. Put in place an incentive plan for the key senior most leaders
5. Ensure positive cash flow
6. Create a pipeline of new products or services
7. Pay down debt to a manageable level
8. Have a 15 year vision and a 3 year strategic plan

9. Deploy technology that leads to improved productivity ‣ Some companies can
be sold right away, while
10. Improve employee productivity by removing roadblocks others need a few years to
put some order into things.

‣ What follows is my list of the
10 most important
items you can do to help
maximize the wealth you will
receive the day you decide
to sell or transition. 5


Do One Thing Number

Really Well 1

‣ Narrow your focus to one area of
business and do that better than
any other company. You can have a
number of products that you make or a
variety of categories that you retail, but
they must all be tied to the same tightly
focused theme.

‣ Provide your customers the
opportunity to buy repeatedly,
giving them choices to move up from
‘incredibly affordable’ to items that cost
more, but come with additional added
value.

6


Remove Yourself From Selling Number

The Company’s Products/Services 2

‣ The owner of a business must not
be the same person who sells its
products or services. If this were the
case, why would I want to buy your
business? I would have to keep you as my
sales leader and you and I probably don’t
want that!

‣ Remove yourself from selling and doing the
work, instead focusing on inﬂuencing
your strategy, people, and
productivity. Your role now, more than
ever, is to build future leaders who will
carry on without you.

7


Build Leaders That Will Make Number

Effective Decisions Without You 3

‣ Coach your leadership team to
make decisions without you. Yes,
you still need a say in high-risk situations,
but the day-to-day operations must be
theirs to manage.

8


Put In Place An Incentive Plan Number

For The Key Senior Most Leaders 4

‣ Smart employees start to sense
when you are preparing to sell
your company. They feel a shift in how
you go about things.

‣ While you must deny the company is for

sale publicly, you can and should
provide the most important
leaders with an incentive to stay
with the company through the transition,
and for up to 3 years after.

9


Ensure Positive Number

Cash Flow 5

collect sooner
increase sales
‣ Buyers pay more for companies
reduced cost of goods with positive cash ﬂow. Do as much
as possible now to reduce the days
reduce expenses outstanding on receivables or even charge
up-front for services.
charge up-front

10


Create A Pipeline Of Number

New Products Or Services 6

‣ What a joy it would be for a new
owner to have products ready to
launch. The value of this future revenue
increases their ability to pay a higher price,
driven by a greater conﬁdence in the ability
to get a return on their investment.

11


Pay Down Debt Number

To A Manageable Level 7

‣ The less debt the company has,
the more valuable it is to a buyer.
Money the new owner is prepared to
invest can then go directly to sales and
marketing initiatives that will deliver
increased proﬁts sooner, vs. being required
to reduce debt load.

12


Have A 15 Year Vision Number

And a 3 Year Strategic Plan 8

‣ In most cases, the current owner can
do a better job of painting a
picture of the opportunity than a
prospective buyer because of the
intimate knowledge you have of the
company and industry.

‣ Show the prospective buyer what
great looks like and they will pay for
the opportunity to make it a reality.

13


Deploy Technology That Leads Number

To Improved Productivity 9

‣ Technology is a catalyst to
increased profits because of how it
improves productivity. It can be a
piece of manufacturing equipment or
software that helps track customer
purchases; in both cases, the net benefit is
improved efficiency.

‣ It is best to steadily spend on technology

over the years so there is no one-time
major expense. Future buyers
appreciate the attention given to
efficiency and will feel more comfortable
paying for its steady deployment.

14


Improve Employee Productivity Number

By Removing Roadblocks 10

‣ While this is the last of the 10, it is no less
important than the others. The more
productive your employees are,
the happier they are with you as
their manager and the company.
This translates into reduced turnover,
more discipline, better ideas, and faster

execution – all leading to improved proﬁts.

‣ In the due diligence step of a sale, the
buyer can sense if people are
productive or not. Make the
necessary changes now by asking your
people what is keeping them from being
more effective and then acting on their
suggestions.
15


When The Time Is Right
Someone Else Will Build On Your Legacy

‣ Selling or transitioning your
company is the natural and right
thing to do. It maximizes your wealth,
while continuing to provide jobs for your
employees that help feed their families.

‣ Feel good about this transition and
look forward to doing something different
with your energy, time, and wealth. You have
earned it!

Cue the music, please!

16


Lead With Your Entrepreneurial Spirit
While Accessing Breakthrough Solutions

the
A bout r!
a utho
‣ I believe being a trusted advisor
involves listening ﬁrst. The more I
seek to understand your business and
what you are dealing with, the richer the
dialogue becomes. I have a friendly and
engaging work style that is balanced
between asking questions, challenging, and

providing solutions for you to consider.

‣ What I don’t do is make decisions
for you. Our conversations are designed
to stretch your thinking, for me to be a
sounding board, and most importantly, a
Jeff Haltrecht | family business advisor
catalyst for you and your company’s
growth.

17


Treating You With Respect,
While Challenging For Better Performance

the
A bout r!
o
auth
Strategic
Thinking ‣ When applied correctly, values guide behaviour
Dev and set the tone for interaction between
Lea opment
Mod ness
eling

people. Here is what you can expect when we
el
ders
work together:
i

Exceptional
Bus

hip

Experience
‣ Treating you with respect

n M
ar
atio ke
‣ Challenging for better performance
ov tin
g
Inn

‣ Helping you be internally driven

Jeff Haltrecht | family business advisor ‣ Putting ideas to action

‣ Embracing change as the path to opportunity

‣ Communicating candidly

‣ Delivering results 18


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To Have A Proactive Discussion
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Pro duct

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Build your business with powerful yet simple
strategies that add to company wealth owners realize wealth within the
company so that when you choose to
Family Business Advisor transition or sell sometime in the future,
Working one-on-one, we take a solid look at
your strategic plan, leadership style, and the business is valued at the highest price
management productivity, all with the intent of possible.
helping you realize value within the company

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Designed to give the senior leader(s) their own
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providing solutions, while being a catalyst for
leadership development and long-term
business growth.

19


Have A Terrific Day!
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20


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