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American Business Brokers & Advisors Founder & President MERGERS & ACQUISITIONS BUSINESS VALUATIONS
SEPTEMBER 2022
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Is Now the Best Time to Sell a Business?
I have owned over 40 different businesses and have sold over 847 businesses. Through these different endeavors and transactions, I have discovered the secret to what makes a successful and profitable business and the best time to sell a business to get top dollar. The answer was always right in front of me, but I was too busy working on my company (as most business owners are) to recognize what needed to be done. Let me explain. Let’s assume for this article that you have a profitable and successful business. Business has been good and is getting better. Recently we all went through a pandemic so for 2020 your business went through some funky times, but now we are in 2022 and profitability is either back to normal or better than 2019 (which is considered a baseline for businesses due to the pandemic). The business is trending up in profitability maybe your sales are not the same as they were in the past, but your profitability has increased over the last couple of years. Well, you discovered one of the secrets of when the best time to sell is. And that is when the business is trending upward in profitability. Why? Because it shows the business has upside and a positive cashflow, which is contrary to what a lot of people think is what you are really selling. Some people think they are selling a beautiful building, nice office, well-dressed and loyal employees — and they are right. But ultimately, what they are really selling is a cashflow stream. Yes, it is always about the money. Cash is king and cashflow of the business is the business. Because you can have one of the nicest and well-designed buildings located in a good part of town with everything in good
condition and in a great location, but if you don’t have a positive cashflow, you don’t have a sellable business. What you have instead is a building and property to sell … but not a business. Lately there has been a lot of talk about interest rates going up and valuations coming down, and all of this is true, but you also have to take into consideration the first rule of economics and that is “supply and demand.” Right now, as I write this article, I’ll bet there are certain items and equipment used in your business that are not available because they are on backorder due to the supply chain being messed up. Notice we didn’t talk about the cost of these items but instead their availability. The same principle applies to the housing market. If you have the money and wanted a home in a certain neighborhood or on the waterfront and it is not available, the price is not the dominant factor. Instead supply and demand becomes the issue. “Not available” means no supply, therefore the value and price increases. I have just shared with you the two most important factors when it comes to selling a business and getting top dollar for it. In fact, they are so simple I bet you almost missed them, and you’re not alone; most people do. First, is the business trending up or down? If the business is trending down, then it is not a good time to sell unless you need to. Next, what does the market look like? Are there a lot of other businesses like yours for sale on the market or not? If there are not very many businesses like yours for sale in the marketplace then the supply and demand
factor comes into play and you will get more for your business provided it has been trending upward in profitability the last couple of years. What I explained and shared with you is factual and will always prevail when working to get top dollar for your business. Presently businesses that fit what I have explained are bringing in top dollar especially when it comes to convenience stores and fuel distribution businesses. All of the businesses American Business Brokers has listed for sale presently are either under a letter of intent or under contract going to closing — and that is because the market is under-supplied and is paying top dollar. To learn more about whether your business is positioned to bring top dollar in today’s marketplace, send me an email at Terry@ TerryMonroe.com requesting my latest book “Hidden Wealth: The Secret to Getting Top Dollar for Your Business” and I will send you a free copy. You can also email me for a confidential market survey to find out what your business is worth in today’s market. –Terry Monroe
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‘The Five Secrets You Must Discover Before You Die’
THE FOURTH SECRET Live in the moment.
When I find a good book, I like to share it with as many people as I can — and one of the books I have shared with friends and clients is “The Five Secrets You Must Discover Before You Die” by Dr. John Izzo. In this book, he interviewed over 200 people, ages 60–106, who were anything from town barbers to Holocaust survivors, aboriginal chiefs to CEOs.
really matter to me? Am I being the person I want to be in this world?
THE SECOND SECRET Leave no regrets.
Do not focus on the past or the future, but experience each moment with gratitude and purpose because each day is a gift. We must live in the present moment because it is the only moment when we have any power. When we wake up each day, we should say thank you for one more day and ask not to waste it.
If we want to find true happiness and purpose in life, we should live with courage, moving toward what we want rather than away from what we fear. In fact, each time we play it safe, we move farther away from our truest self.
The book will make you laugh, bring you to tears, and inspire you to discover what matters long before you die. Below is a sample of what you will discover. THE FIRST SECRET Be true to yourself and live with intention.
THE FIFTH SECRET Give more than you take.
THE THIRD SECRET Become love.
We have control over what we can give. In reality, each day we have the power to give without limit. We can choose kindness, love, or to be generous. We should want to leave the world better in some way than we found it. Just think about it: The best time to plant a tree was 20 years ago, but the second-best time is today. The legacy you leave is the life you lead. Love what you do and do what you love.
To be a loving person, we must begin by loving our
own selves. Acting with love toward those closest to us — and making loving relationships a
Am I following my heart and being true to myself? Is my life focused on the things that
priority in our lives — helps us choose love and in turn makes it so we can change the future.
ENTREPRENEURSHIP IN FAMILY BUSINESS
Can we all agree that the idea of entrepreneurship is an extraordinarily inspired concept? It conjures emotions of freedom and self-sufficiency, risk taking and the possibility of failure. To some, it’s a self-directed solo adventure that beckons with images of Richard Branson circling the globe in a balloon or Elon Musk blasting humans into space for 15 seconds of weightlessness. Just shoot that adrenaline straight into my veins.
was someone without a job. It didn’t always seem like a glamorous aspiration. And often, it was a calling born of economic necessity — not glamour. Eventually, the idea of entrepreneurship became a hodgepodge of get-rich-quick schemes and franchises that all promised wealth in 10 easy steps for a small investment of $10,000. Again, not exactly enticing and in some instances financially catastrophic. Over the last couple of decades or so, entrepreneurship has become aspirational. It’s sort of sexy to be an entrepreneur now. Kind of shiny. Everyone seems to be chasing that dream of starting something meaningful (or, if not meaningful, at least an exit with a pocketful of cash money). There’s something magical about the idea of forging your own way in the world, leaving a legacy of creativity and innovation. In fact, many university programs now require liberal arts, science, and humanity students to take courses about entrepreneurship. The searing truth is that entrepreneurship is hard; the failure rate is high and the access to capital is low. Very few startups make it past the two-year mark, and fewer still make it past the idea stage. Yet, humans are natural-born dream chasers — and that’s a good thing for family businesses because somewhere in your past, there is an origin story
Thirty years ago, entrepreneurship was something entirely different than it is today. Self-anointed entrepreneurs were often viewed as ne’er-do-wells or snake oil salesmen looking to turn a quick buck. But generally, an entrepreneur
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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 start? 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 for Your Business.” While we’d 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. Sometimes, contemplating the financial implications of selling your business and dealing with the strain and grief that comes with doing so are worse than actually selling the business. So, what then? Well, in Terry Monroe’s “Hidden Wealth,” you’ll also learn how to realistically assess your situation, deal wisely with the business you’ve built over the years, and maximize the money you’ll receive when you decide to sell. 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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of an entrepreneur who was a dream chaser. And that dream chaser was the founder of your multigenerational business.
And the amazing, oft-overlooked thing about family business is that you are the success stories of entrepreneurship. You are the stewards of that dream- chasing founder. The challenge, of course, is how to remain entrepreneurial over generations when the family tree sprawls, disagreements erupt, and the focus is less on opportunity and more on governance. But there are questions: How is entrepreneurship a part of your culture? How do you define it and encourage it in your family business? And, really, should you? Entrepreneurship should be a part of all family business strategy and all business culture — from the board level to the CEO and the shareholders. It encourages new thinking. Without it, you risk irrelevance. And believe me, you do not need to float around the globe in a balloon to be entrepreneurial. You just have to be open to opportunities. –Amy Cosper,
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Editor of Family Business Magazine & Past Editor of Entrepreneur Magazine
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INSIDE 7824 Estero Blvd., 3rd Floor Fort Myers Beach, FL 33931 1 2 Is Now the Best Time to Sell a Business? ‘The Five Secrets You Must Discover Before You Die’
Sudoku Solution
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Entrepreneurship in Family Business
Get the Wisdom of Other Business Owners’ Mistakes
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Finding Your Audience Is Key
Which One Should You Use? SO MANY SOCIAL MEDIA OUTLETS
A social media presence is essential to connecting with your company’s customers and prospects. But do you need every media platform to engage with others? Each outlet meets different needs and interests, so it’s crucial that you analyze which one will net the most engagement for your business. In fact, the demographic of your targeted audience will help you decide. Let’s look at the three main outlets customers use to discuss their needs and wants. FACEBOOK is primarily used for family-friendly content. Recently, there is an added focus on business ads for networking purposes, which can help you attract more leads. The demographic on Facebook mainly focuses on individuals who are 45 years old and older. This platform is great for businesses targeting seniors, like those in the home improvement and estate planning industries INSTAGRAM was popularized by teenagers, but now over half of its users are between the ages of 25–34. Small businesses use this outlet to share upcoming events, sales, and products because of the new business feature on the app. Relationship-building is the sole focus for companies on Instagram because you can engage with customers through stories, live videos, and interactive polls.
25–49, and 56% have completed some college courses or have a degree. Some businesses use Twitter to see what others are saying about their services and resolve any issues that occur. This is a great way to build trust with
your customers and ensure that they know you care about their
experience with you and your company.
If you want to learn more about the different demographics for each outlet, go to Blog.Hootsuite.com/Social-Media-Demographics for more in-depth analysis and statistics.
TWITTER is the best place to have personal conversations, brainstorm, and share news. Over 59% of Twitter users are between the ages of
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