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American Business Brokers & Advisors Founder & President MERGERS & ACQUISITIONS BUSINESS VALUATIONS
JANUARY 2023
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Trying to Sell Your Business?
Don’t Make These 8 Mistakes
Sellers are typically experts at running their businesses. Some business owners know every single intricate detail of running the day-to-day operations, but they do not know and fully understand every intricate detail of selling their business. How could they? Selling a business is a complicated and involved process. It requires a tremendous amount of time, energy, effort, experience, and knowledge of that entire process. Here are eight of the top mistakes business owners make when selling their business. Hopefully, this list will help you avoid the costly mistakes many sellers make when attempting to sell their businesses. MISTAKE 1: MOST SELLERS WAIT TOO LONG TO DECIDE TO SELL THEIR BUSINESS. So many sellers wait until they are burned out and no longer have an interest in their business.
By not caring about growing or maintaining the business it will often start to trend downward, and when a business is trending downward, it is not the best time to sell. The best time to sell is when a business is trending upward in sales. It is also harder emotionally to sell a business because you may feel like you need to sell. When you think you may be interested in selling, begin gathering the information you will need. This information will help you to decide if you are ready to sell. MISTAKE 2: SELLERS TELL PEOPLE THEY ARE SELLING THEIR BUSINESS. Disclosing the sale can be detrimental to your business. Even if you tell one or two people about a potential sale, they might tell someone who tells someone, who tells a vendor. Before long an employee will get wind that you are thinking about selling, and they will tell another employee. Then there is a good chance some
experienced in all phases of the sale, it could not only cost you extra profits, but it could also cost you the sale. Instead, hire a professional to perform the following: 1. Package the business in a professional manner, describing all of the details in an intricate manner. 2. Market the business without disclosing confidential information that could be detrimental to your business. 3. Negotiate terms and conditions, something that most sellers are terrible at because they are too close to the deal. 4. Navigate the process of the sale of the business, because there is a process, and if not done properly there is a good chance the transaction won’t close. MISTAKE 4: HIRING A REAL ESTATE BROKER OR AGENT TO SELL THEIR BUSINESS AND NOT AN ACTUAL M & A ADVISOR OR BUSINESS BROKER. Most real estate agents and brokers are experienced in selling homes or commercial property, not a business. They do not have experience in valuing or selling businesses. They do not have access to industry business comps and are not familiar with a specific industry. If you need heart surgery, you do not hire a chiropractor. Therefore, if you want to sell your business do not hire a real estate agent to sell your most prized possession, your business. Continued on Page 2 ...
employees will leave, and you just lost a large portion of the assets you were planning on selling. MISTAKE 3: SELLERS ATTEMPT TO SELL THEIR BUSINESS ON THEIR OWN. Instead of hiring a professional mergers and acquisitions advisor or business broker experienced in their industry to sell their business, some sellers attempt to do this on their own. If you are not
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13 Characteristics of Successful People
3. SUCCESSFUL PEOPLE ARE STRONGLY MOTIVATED TOWARD ACHIEVEMENT. They take great satisfaction in accomplishing a task. 4. SUCCESSFUL PEOPLE ARE FOCUSED. They concentrate on their main goals and objectives. They do not get sidetracked. They do not procrastinate. They work on projects that are important and do not allow those projects to sit until the last minute. They are productive, not just busy. 5. SUCCESSFUL PEOPLE LEARN HOW TO GET THINGS DONE. They use their skills, talents, energies, and knowledge to the fullest extent possible. They do the things that need to be done, not just the things they like to do. They are willing to work hard and commit themselves to getting the job done.
Every successful person has five traits:
Decisions are not put off or delayed, they are made now!
1. They have a dream. 2. They have a plan. 3. They have specific knowledge or training. 4. They’re willing to work hard. 5. They do not take no for an answer. Remember: Success begins with a state of mind. You must believe you will be successful to become a success.
9. SUCCESSFUL PEOPLE HAVE THE
COURAGE TO ADMIT THEIR MISTAKES. When they make a mistake, they admit it, fix it, and move on. They don’t waste a lot of time, energy, money, and/or other resources trying to defend a mistake or a bad decision. They’re motto is: Fess up when you mess up.
10. SUCCESSFUL PEOPLE ARE SELF- RELIANT.
The following is a list of the skills, talents, and characteristics you will find in successful people.
They have the skills, talents, and training that are needed.
1. SUCCESSFUL PEOPLE HAVE A DREAM. They have a well-defined purpose. They have a definite goal. They know what they want. They are not easily influenced by the opinions of others. They have willpower. They have ideas. Their strong desire brings strong results. They go out and do things that others say cannot be done. Remember: People who excel in life are those who produce results, not excuses. Anybody can come up with excuses for why they have not made it. Those who want to succeed badly enough do not make excuses. 2. SUCCESSFUL PEOPLE HAVE AMBITION. They want to accomplish something. They have enthusiasm, commitment, and pride. They have self-discipline. They are willing to work hard and go the extra mile. They have a burning desire to succeed. They are willing to do whatever it takes to get the job done.
11. SUCCESSFUL PEOPLE HAVE SPECIFIC KNOWLEDGE They know the things they need to know to be successful. And when they need information, knowledge, or skills and talents that they don’t possess, they find someone who does possess them.
6. SUCCESSFUL PEOPLE TAKE
RESPONSIBILITY FOR THEIR ACTIONS. They don’t make excuses. They don’t blame others. They don’t whine or complain.
12. SUCCESSFUL PEOPLE WORK WITH
AND COOPERATE WITH OTHER PEOPLE. They have positive, outgoing personalities. They surround themselves with people
7. SUCCESSFUL PEOPLE LOOK FOR SOLUTIONS TO PROBLEMS.
They are opportunity-minded. When they see opportunities, they take advantage of them.
who offer them help, support, and encouragement. They are leaders.
13. SUCCESSFUL PEOPLE ARE ENTHUSIASTIC.
8. SUCCESSFUL PEOPLE MAKE DECISIONS.
They are excited by what they are doing, and that excitement is contagious. They draw people to them because these people want to work with them, do business with them, and be with them.
They think about the issues and relevant facts, give them adequate deliberation and consideration, and make a decision.
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MISTAKE 5: SELLERS DO NOT PRICE THEIR BUSINESS CORRECTLY. Approximately 50% or more business owners do not know what their business is worth. Markets change constantly, and what a business was worth last year is not what it is worth this year. It is too easy for a business owner to leave money on the table because they don’t know what their business is worth. You are only going to get one chance to sell your business, so make sure you get professional help to ensure you are getting top dollar. MISTAKE 6: SELLERS WILL GIVE AWAY THE FARM WHEN SELLING THEIR BUSINESS. Some sellers give away all kinds of proprietary information without having the buyer sign an NDA (non-disclosure agreement). Giving away
certain information too soon can cost a seller not only money but confidentiality, which can impact the operations of the business if the word gets out that the business is for sale. MISTAKE 7: SELLERS DO NOT QUALIFY BUYERS. Less than 40% of deals handled between a buyer and seller come to fruition and close. Most deals fall apart because the buyer was never qualified in the first place. Do not waste your time on unqualified buyers. MISTAKE 8: SELLERS TRY TO SELL TO THEIR EMPLOYEES. Selling to an employee is a huge mistake. First of all, they are an employee for a reason, and that is because they do not have the mindset to be a business owner. Nine times out of 10, the sale falls
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SUDOKU (SOLUTION ON PG. 4) Take a Break!
Get the Wisdom of Other Business Owners’ Mistakes FROM TERRY MONROE’S ‘HIDDEN WEALTH’
Are you planning on selling your business in the next 1–2 years? If so, you need to start planning now. But where do you even begin? Selling a business is a massive undertaking. With so many things to consider, some confusion is understandable, but if you don’t get the right kind of help, you could end up selling your business for far less than top dollar and leave tens of thousands of dollars on the negotiating table. These are the kinds of cautionary tales that market maker and four-time author Terry Monroe shares in “Hidden Wealth: The Secret to Getting Top Dollar
through for a multitude of reasons, usually financial. If the business does not get sold to the employee, but to someone else, there is a chance the employee will get disgruntled and quit or tell their fellow employees the business is for sale. Remember selling your business is one of the biggest decisions you will ever make. Keep in mind that selling your business is an emotional process. When people are emotional, they tend to make decisions based on emotion, not logic. When selling your business, hire a professional who uses logic to facilitate the sale of your business and maximize value to get you top dollar. –Terry Monroe TERRY’S QUOTE FOR THE DAY “Everyday is a Great Day & if you don’t think so, just try missing one!” for Your Business.” While we’d all like to hope we’re accomplished and savvy enough to sell our business without any help, the uncomfortable truth is that tons of successful business owners have lost out on millions of dollars in selling their businesses — all because they didn’t know exactly what they were doing. It has been said that we learn from our failures, not our successes, but the true sign of a successful individual is to learn from someone else’s failures and not your own. “Hidden Wealth” seeks to do just that — give every business owner access to the lessons learned from the mistakes of other business owners so they can avoid the setbacks and reap all the rewards. Find out how you can get a copy today by emailing Terry@terrymonroe.com .
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SCARF SLEDDING TRADITION WONDERLAND
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INSIDE 7824 Estero Blvd., 3rd Floor Fort Myers Beach, FL 33931 1 2 8 Mistakes When Selling Your Business 13 Characteristics of Successful People
Sudoku Solution
Get the Wisdom of Other Business Owners’ Mistakes
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The 5 Languages of Appreciation in the Workplace
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Through Encouragement and Consideration SHOWING APPRECIATION IN THE WORKPLACE
TANGIBLE GIFTS A nice, personalized gift can be a display that you acknowledge your employee’s or coworker’s passions and preferences. The more you converse with them and learn about their personal lives, the easier it’ll be to choose a more meaningful gift and bring a smile to their face. APPROPRIATE PHYSICAL TOUCH This language can be tricky, but it’s about respecting boundaries. A high-five, fist bump, pat on the shoulder, and a handshake are generally acceptable, but it is best not to assume. Everyone’s level of comfort differs, so always ask before initiating any type of appropriate physical touch. If you take the time to understand your employees’ preferred language of appreciation, you can communicate more meaningfully and positively.
Have you ever heard of “The 5 Love Languages” by Gary Chapman? It’s an incredibly popular book that identifies different ways individuals prefer to give and receive love. You can communicate more effectively with your partners, friends, and family by considering their personal needs and using the language that speaks to them best. But did you know you can apply these same principles to show appreciation and encouragement at work? When you understand and use your employees’ preferred language of appreciation, your workplace culture will significantly improve. WORDS OF AFFIRMATION A “thank you” note or shout-out from a colleague is quite powerful, but it’s even more effective when it’s specific to an act or moment because it shows that you are paying attention to what matters. For your message
to be clear, consider describing the situation you’re referring to, discussing the behavior you are looking to celebrate, and highlighting the impact of the behavior on you, the team, and the organization. QUALITY TIME This language is all about receiving complete and focused attention. This means taking the time for mentorships, checking in meaningfully, and creating moments for teams to connect. For employees who value quality time, having dedicated time to connect and learn from their employers and coworkers can be significantly impactful as they feel seen and heard. ACTS OF SERVICE Simply picking up an extra coffee for a team member, or alleviating a work task off someone’s plate, shows that you care about their overall well-being and brings them joy.
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