Tip #2 REMEMBER, IT’S ALL ABOUT THE NUMBERS SO MAKE SURE YOU KNOW YOURS.
The reason I like to quantify things is because all businesses come back to something that has to do with numbers. And numbers don’t lie. To deliver profitable growth, you need to be ambidextrous to sustain excellence in both growth and cost control.
If you are a business owner who has her books done by an outsider, then you better not be putting the reports you should be getting on a very regular basis in a drawer. Or worse, not getting the reports at all. You need to understand how money is flowing in and out of your business, how fast it is flowing, and who is giving it to you or getting it from you. You need to know how long you really spent doing a job, every minute of it, to know if the price you charged paid you fairly. How many times have you undercharged and overdelivered?
Now, let me tell you about a client who came to me already making a six figure income. Her business is mature, she is over 50, and she is, of all things, another coach. Her specialty is coaching celebrities and CEOs who have to present compelling messages to important people. When she came to see me, she had her act together. Her image was dialed in. She could explain her business quickly and effectively and she brought her financials, which she understood. She was interested in one main deliverable from our time together, making more income but spending less time earning it. She was thinking of early retirement and wanted to fund the kitty in preparation for that chapter of her life.
So, we did two important things together. She went back through her numbers and took a closer look at the projects she worked on and how long they really took her. I had her keep a time log for 30 days of every phone call to and from her clients, every piece of correspondence she wrote, every bit of research she did, and every meeting she sat through. She was amazed out the amount of time she had lost track of on each of her projects. When it was time to renegotiate her next year of projects, she went to each client with the ammunition of the time spent on their behalf and more importantly, what the client had accomplished because of her work. She was able defend her pricing integrity and to increase her income by 25% from this all important attention to detail.
Our next piece of her goal was to work less hours, so we needed to create a “make money when you sleep” scenario. This concept is more difficult for a service business, such as a consultant or a coach, than it would be for a provider of products who can post them on the internet, add a shopping cart, and ship things you can see and touch. We needed to extract items from her brain, package them up and post them on the internet.
When you go back to work tomorrow, think about capturing a record of the time you spend on each of your clients projects, take your financials out of the drawer if you put them there, and keep accurate notes of how your work and/or your products have benefitted your clients. If you provide a service to others, go back and read your reports to clients and notes from your meetings and figure out how you can reuse them in articles, seminars, or speaking engagements.
Next week, I will share with you Tip #3,
JUSTIFY YOUR DECISIONS FROM A POSITION OF BUSINESS SAVVY, NOT FROM A POSITION OF EMOTION, OR EVEN WORSE, A POSITION OF LAZINESS.
Sunday, April 8, 2007
Saturday, March 31, 2007
Top Ten Tips When Choosing A Business Broker
Okay, you are thinking about selling your business, YOURSELF, is probably a mistake. Spring for the commission and find a talented broker to handle the deal. Here's what to look for:
1. Find a broker that has the time for you. How many listings does he have? Is he in the business of “churning” new clients?
2. Referrals – Ask for referrals. Sure, she’ll give you the best she has, but you may discover good info in your conversations with her past clients
3. Does he specialize? Some brokers have narrow specialties, others will handle anything. A generalist may be just fine, but make sure he understands your business.
4. After the first conversation, subtly quiz her. Did she remember you and your business? Has she had further thoughts? Weed out the phone jockeys.
5. Meet with him in person if at all possible. Face to face meetings are essential.
6. Understand her marketing process. How will she market your business? Does she understand who might be “the perfect buyer”?
7. Is he resourceful? Business brokers can be very formulaic. Does his formula make sense for your business?
8. Judge her on her manners and etiquette. Remember, she is in charge of presenting your business – make sure you like the way she does that.
9. Ask for “business profiles”, or brochures, of businesses he has sold. Do you like the way the businesses are represented? Is there a sense of professionalism?
10. Trust your instincts. This is an important and somewhat personal decision. If you have qualms, talk to more candidates.
Want to learn more?
Bay Area Business Coaching, www.bayareabusinesscoaching.com, is ready to help you avoid costly mistakes.
1. Find a broker that has the time for you. How many listings does he have? Is he in the business of “churning” new clients?
2. Referrals – Ask for referrals. Sure, she’ll give you the best she has, but you may discover good info in your conversations with her past clients
3. Does he specialize? Some brokers have narrow specialties, others will handle anything. A generalist may be just fine, but make sure he understands your business.
4. After the first conversation, subtly quiz her. Did she remember you and your business? Has she had further thoughts? Weed out the phone jockeys.
5. Meet with him in person if at all possible. Face to face meetings are essential.
6. Understand her marketing process. How will she market your business? Does she understand who might be “the perfect buyer”?
7. Is he resourceful? Business brokers can be very formulaic. Does his formula make sense for your business?
8. Judge her on her manners and etiquette. Remember, she is in charge of presenting your business – make sure you like the way she does that.
9. Ask for “business profiles”, or brochures, of businesses he has sold. Do you like the way the businesses are represented? Is there a sense of professionalism?
10. Trust your instincts. This is an important and somewhat personal decision. If you have qualms, talk to more candidates.
Want to learn more?
Bay Area Business Coaching, www.bayareabusinesscoaching.com, is ready to help you avoid costly mistakes.
Friday, March 30, 2007
Seven Things NOT To Do When Selling a Business
Don't make costly mistakes when thinking about selling your business. Here are seven important tips to help you do it right.
1) Treat your business like you would treat your car if you knew you were selling it.
If you own a nice car that’s in good shape, you may be thinking about selling it now, before the defects emerge. Or you might have a car that looks good, but you know something is about to blow. The instinct in either case is to sell it before a buyer can find the defects. Buyer beware. When selling a business do the OPPOSITE. Get the business in great shape; expect a buyer to look everywhere for everything. Run the business as if you plan to keep it for 20 more years. Bottom line: don’t focus on hiding potential defects. Every business has challenges, and real buyers will understand this. Your job as you prepare for sale is to grow your markets, improve your sales, and focus on profitability
2) Let key employees know right away that you are planning to sell.
You may be thinking about your best and loyal employees. You feel like they’ve been good to you, so you should give them a head’s up. This is a worthy and decent instinct, but it could easily backfire on you and your treasured employees. Anything could happen, and the value of your business could diminish as they look for other jobs, tell their friends etc. In many cases, the employees will want to stay on. This is likely to enhance the value of the business. There IS a time to tell your employees – and that differs depending on the business. In most instances, the fact that your business is for sale is confidential, and is the subject of nondisclosure agreements. You need to maintain control of that process.
3) Let your suppliers know you are planning to sell.
One sure way to endanger your supply line and have the word spread without your knowledge.
4) Let your inventory and schedule capital improvements run down.
You might be thinking that depleting inventory would make the business more saleable – the new buyer pays less for the inventory and new equipment. Sure, you should keep an eye on unsaleable and unsuccessful inventory, but be sure your motives are in check. You must operate the business as if you were planning on keeping it. Keep up your standard ordering procedures.
5) Now that you plan to sell your business, focus on your next move
NOT!! Some business owners are anxious to move on. Some might even encumber the existing business with loans to fund the next business. Why not? You figure you’ll pay off the new loan with the proceeds of the sale. That’s quite a gamble! You also need to remember that the terms of a sale is likely to include a non-compete clause, so be sure your new business is in no way competing with the old one. You need to be focused: selling the business is a job in itself. Don’t underestimate the time it will take for meeting prospective buyers, stepping through due diligence, etc.
6) Leave the documentation to the broker, lawyer and accountant.
Sure, that’s what they are paid for, right? Well, yes but only to a certain extent. You have two primary tasks: 1) make the sure the business is saleable and is operating cleanly and efficiently and 2) be able to document #1. A good business broker will walk you through what you need, but at a minimum you should have tax returns, P&L sheets, balance sheets, and sales statistics.
7) Taking cash under the table is fine – most business owners do it. Now that I’m selling, why not?
Regardless of the illegalities – which is an individual choice – this does not make business sense. Your business may be valued using a multiple of revenue (gross or net). So, for every $1 you take in you may get up to $3 or more in a sale price. Why deny yourself that increased multiple. You might say, “well the business has been valued already based on past revenue. Now that that is done, why not take unreported cash?” The answer is simple: any buyer is going to look at revenues up to the current date. They may well demand a reduction in price if current revenues are not in line with historical revenues.
Want to avoid costly mistakes when selling your business?
Bay Area Business Coaching, www.bayareabusinesscoaching.com, is here to help.
1) Treat your business like you would treat your car if you knew you were selling it.
If you own a nice car that’s in good shape, you may be thinking about selling it now, before the defects emerge. Or you might have a car that looks good, but you know something is about to blow. The instinct in either case is to sell it before a buyer can find the defects. Buyer beware. When selling a business do the OPPOSITE. Get the business in great shape; expect a buyer to look everywhere for everything. Run the business as if you plan to keep it for 20 more years. Bottom line: don’t focus on hiding potential defects. Every business has challenges, and real buyers will understand this. Your job as you prepare for sale is to grow your markets, improve your sales, and focus on profitability
2) Let key employees know right away that you are planning to sell.
You may be thinking about your best and loyal employees. You feel like they’ve been good to you, so you should give them a head’s up. This is a worthy and decent instinct, but it could easily backfire on you and your treasured employees. Anything could happen, and the value of your business could diminish as they look for other jobs, tell their friends etc. In many cases, the employees will want to stay on. This is likely to enhance the value of the business. There IS a time to tell your employees – and that differs depending on the business. In most instances, the fact that your business is for sale is confidential, and is the subject of nondisclosure agreements. You need to maintain control of that process.
3) Let your suppliers know you are planning to sell.
One sure way to endanger your supply line and have the word spread without your knowledge.
4) Let your inventory and schedule capital improvements run down.
You might be thinking that depleting inventory would make the business more saleable – the new buyer pays less for the inventory and new equipment. Sure, you should keep an eye on unsaleable and unsuccessful inventory, but be sure your motives are in check. You must operate the business as if you were planning on keeping it. Keep up your standard ordering procedures.
5) Now that you plan to sell your business, focus on your next move
NOT!! Some business owners are anxious to move on. Some might even encumber the existing business with loans to fund the next business. Why not? You figure you’ll pay off the new loan with the proceeds of the sale. That’s quite a gamble! You also need to remember that the terms of a sale is likely to include a non-compete clause, so be sure your new business is in no way competing with the old one. You need to be focused: selling the business is a job in itself. Don’t underestimate the time it will take for meeting prospective buyers, stepping through due diligence, etc.
6) Leave the documentation to the broker, lawyer and accountant.
Sure, that’s what they are paid for, right? Well, yes but only to a certain extent. You have two primary tasks: 1) make the sure the business is saleable and is operating cleanly and efficiently and 2) be able to document #1. A good business broker will walk you through what you need, but at a minimum you should have tax returns, P&L sheets, balance sheets, and sales statistics.
7) Taking cash under the table is fine – most business owners do it. Now that I’m selling, why not?
Regardless of the illegalities – which is an individual choice – this does not make business sense. Your business may be valued using a multiple of revenue (gross or net). So, for every $1 you take in you may get up to $3 or more in a sale price. Why deny yourself that increased multiple. You might say, “well the business has been valued already based on past revenue. Now that that is done, why not take unreported cash?” The answer is simple: any buyer is going to look at revenues up to the current date. They may well demand a reduction in price if current revenues are not in line with historical revenues.
Want to avoid costly mistakes when selling your business?
Bay Area Business Coaching, www.bayareabusinesscoaching.com, is here to help.
THE 90 Day Plan to Increase Your Income and Have the Time to Enjoy It!!
In September, 2006, I put my home on the market. Although I am a native New Yorker, after 18 years in the Bay Area, I consider myself a “real Californian”, so I did the California thing and had it staged.
I knew from both research and hype that staged homes sell faster and for more money than non-staged homes. Quality sells, particularly in a competitive marketplace. So, about 90 days before I put the For Sale sign on the lawn, I was off to the races on the staging idea.
What happened after I hired the stager you ask...well, most of my belongings, furniture, pictures, and personal stuff went into a storage area and some new, more streamlined pieces appeared in its place. The goal was to:
o help a potential buyer understand what each of the rooms could be used for,
o get a buyer to want to pay my asking price,
o prove that the value of my home is in the details,
o somewhat, but not totally, depersonalize it, so the buyer could imagine living in it with their “stuff”
o and make it the “best in the marketplace” during a slowdown in the real estate market.
That got me thinking about how I work with my clients and their businesses...I work with the same principles as the home stagers. The key ideas I was supposed to focus on during the somewhat gut -wrenching process of house staging were the same ones I work on with my clients: clarify, quantify, justify, and modify, in order to amplify success.
In January, didn't you think that 2007 will be your best year ever? Let me tell you that’s the standard response at the beginning of the year. However, it does not just magically happen by the end of it.
So, we are going to stage your business. I am giving you a 90 day plan, which is generally how long it takes to jumpstart your income, whether you are starting, growing or thinking about selling your business.
Let’s Start with:
Tip # 1 YOU NEED TO CLARIFY WHAT YOU NEED AND WHAT YOU WANT
BECAUSE IF YOU DON’T, NOBODY ELSE WILL.
Let me tell you about a young woman I met when she was finishing up law school and we started talking about her plans for the future. She mentioned to me that she had no interest in joining a law firm because she wanted the flexibility that an associate was guaranteed NOT to have if she ever wanted to make partner. But, she also wanted the income that went along with a big city law firm offer.
Whether you are starting your business or well into into it, you need to set the ground rules for what you want out of it and how much effort you are willing to devote to making want you want actually happen. You need to clarify to yourself, your family, your friends and your client what you want in order for it to become a reality.
All of my clients begin their coaching with several assignments.
First, I would have you come to our first session dressed as if it was the most important meeting of your life. I spent half of my career running Human Resources for major corporations. If you do that for a living, you know, within the first four minutes of meeting someone, if you are going to hire him or her, regardless of his or her resume. Whether getting a job or getting a client, all of you know that first impressions are important. Research shows that in that four minutes, first impressions are made up this way:
o 55% visual impact, dress, facial expressions and body language,
o 38% tone of voice
o 7% what you actually say
How you walk into the room, shake your hand, maintain eye contact, and the attention to detail on how you put yourself together for the meeting tells a lot about your confidence and how you will fit with the culture, which is as important as your ability to do the job. You would be surprised at how many people don’t have a convincing handshake, a commanding and confident presence, or don’t take the time to shine their shoes. Attention to detail makes an employer or a client take you seriously. And a word of caution. If you meet with your next potential client two or three times before closing the deal, which is the case many times, make sure you keep a log of what you wore to each meeting. There is a good chance that you will forget what you wore and show up in the same outfit again. Unfortunately, for you, your potential client probably will remember you wore that same outfit last time and conjure up any number of reasons why, none of them positive.
So, think about with whom you can dress rehearse your first impression and go home and practice. Remember, your potential next client may be drawing conclusions about you before you have gotten to excite her with your presentation. Don’t lose your shot at the next best deal on things that are so easily fixed.
Next, I would ask you to tell me in 30 seconds what your business is. You need to be able to fine tune your “elevator pitch”. In a study conducted by a professor at University of Toledo, she concluded that the first 30 seconds make or break the connection between two people when they meet for the first time.
You need to be able to capture the essence of your business in a few sentences, so go home and practice until it rolls off your tongue.
Then, I would ask you to make a wish list of what will define success in your life. Notice I said “your life” I don’t want a list of business success factors. I want to know about your personal life too. So, your list might have an income goal, a fancy car, retirement at age 50, travel with your family and friends, community service, even a Nobel Peace prize. I don’t care as long as it is all inclusive.
And finally, I would have you write your obituary. Now, I am not trying to bring you down with this seemingly morbid thought. What I am looking for is a document that represents how you want to be remembered. It should be “New York Times” worthy. It should reflect your wishlist, even if none of the items on it have happened yet.
Over the next few weeks, sit down and make a wishlist and write your obituary. Once you do, or if you already have done this, make sure you pull them out several times a year and see that you are doing the necessary things to keep it on track and make the documents come true. Update and modify them as needed. And, most importantly, don’t procrastinate to the point where wake up later in life and have regrets that you didn’t accomplish your goals and dreams and are not remembered the way you so brilliantly wanted to be when you wrote that obituary.
Now let’s go back to the law student. She is now an attorney who specializes in elder law. When she started out, she did not have the confidence to stand in front of a group and give a talk about her business. So, she started by practicing in front of me, including dressing for the image she wanted to convey. And then, she practiced in front of small groups of seniors from her church and she got her first client. As far as her wish list, it included working the 4 day week, getting married, having a family and earning as much as a partner in somebody else’s law firm in significantly less time. Her income last year was over $400,000, she works Monday through Thursday, 25-30 hours a week and last year she and her husband had a their first child. So far, she is living her definition of success.
Next week, I will share with you Tip #2, REMEMBER, IT’S ALL ABOUT THE NUMBERS SO MAKE SURE YOU KNOW YOURS.
Visit us at Bay Area Business Coaching, www.bayareabusinesscoaching.com, to learn more.
I knew from both research and hype that staged homes sell faster and for more money than non-staged homes. Quality sells, particularly in a competitive marketplace. So, about 90 days before I put the For Sale sign on the lawn, I was off to the races on the staging idea.
What happened after I hired the stager you ask...well, most of my belongings, furniture, pictures, and personal stuff went into a storage area and some new, more streamlined pieces appeared in its place. The goal was to:
o help a potential buyer understand what each of the rooms could be used for,
o get a buyer to want to pay my asking price,
o prove that the value of my home is in the details,
o somewhat, but not totally, depersonalize it, so the buyer could imagine living in it with their “stuff”
o and make it the “best in the marketplace” during a slowdown in the real estate market.
That got me thinking about how I work with my clients and their businesses...I work with the same principles as the home stagers. The key ideas I was supposed to focus on during the somewhat gut -wrenching process of house staging were the same ones I work on with my clients: clarify, quantify, justify, and modify, in order to amplify success.
In January, didn't you think that 2007 will be your best year ever? Let me tell you that’s the standard response at the beginning of the year. However, it does not just magically happen by the end of it.
So, we are going to stage your business. I am giving you a 90 day plan, which is generally how long it takes to jumpstart your income, whether you are starting, growing or thinking about selling your business.
Let’s Start with:
Tip # 1 YOU NEED TO CLARIFY WHAT YOU NEED AND WHAT YOU WANT
BECAUSE IF YOU DON’T, NOBODY ELSE WILL.
Let me tell you about a young woman I met when she was finishing up law school and we started talking about her plans for the future. She mentioned to me that she had no interest in joining a law firm because she wanted the flexibility that an associate was guaranteed NOT to have if she ever wanted to make partner. But, she also wanted the income that went along with a big city law firm offer.
Whether you are starting your business or well into into it, you need to set the ground rules for what you want out of it and how much effort you are willing to devote to making want you want actually happen. You need to clarify to yourself, your family, your friends and your client what you want in order for it to become a reality.
All of my clients begin their coaching with several assignments.
First, I would have you come to our first session dressed as if it was the most important meeting of your life. I spent half of my career running Human Resources for major corporations. If you do that for a living, you know, within the first four minutes of meeting someone, if you are going to hire him or her, regardless of his or her resume. Whether getting a job or getting a client, all of you know that first impressions are important. Research shows that in that four minutes, first impressions are made up this way:
o 55% visual impact, dress, facial expressions and body language,
o 38% tone of voice
o 7% what you actually say
How you walk into the room, shake your hand, maintain eye contact, and the attention to detail on how you put yourself together for the meeting tells a lot about your confidence and how you will fit with the culture, which is as important as your ability to do the job. You would be surprised at how many people don’t have a convincing handshake, a commanding and confident presence, or don’t take the time to shine their shoes. Attention to detail makes an employer or a client take you seriously. And a word of caution. If you meet with your next potential client two or three times before closing the deal, which is the case many times, make sure you keep a log of what you wore to each meeting. There is a good chance that you will forget what you wore and show up in the same outfit again. Unfortunately, for you, your potential client probably will remember you wore that same outfit last time and conjure up any number of reasons why, none of them positive.
So, think about with whom you can dress rehearse your first impression and go home and practice. Remember, your potential next client may be drawing conclusions about you before you have gotten to excite her with your presentation. Don’t lose your shot at the next best deal on things that are so easily fixed.
Next, I would ask you to tell me in 30 seconds what your business is. You need to be able to fine tune your “elevator pitch”. In a study conducted by a professor at University of Toledo, she concluded that the first 30 seconds make or break the connection between two people when they meet for the first time.
You need to be able to capture the essence of your business in a few sentences, so go home and practice until it rolls off your tongue.
Then, I would ask you to make a wish list of what will define success in your life. Notice I said “your life” I don’t want a list of business success factors. I want to know about your personal life too. So, your list might have an income goal, a fancy car, retirement at age 50, travel with your family and friends, community service, even a Nobel Peace prize. I don’t care as long as it is all inclusive.
And finally, I would have you write your obituary. Now, I am not trying to bring you down with this seemingly morbid thought. What I am looking for is a document that represents how you want to be remembered. It should be “New York Times” worthy. It should reflect your wishlist, even if none of the items on it have happened yet.
Over the next few weeks, sit down and make a wishlist and write your obituary. Once you do, or if you already have done this, make sure you pull them out several times a year and see that you are doing the necessary things to keep it on track and make the documents come true. Update and modify them as needed. And, most importantly, don’t procrastinate to the point where wake up later in life and have regrets that you didn’t accomplish your goals and dreams and are not remembered the way you so brilliantly wanted to be when you wrote that obituary.
Now let’s go back to the law student. She is now an attorney who specializes in elder law. When she started out, she did not have the confidence to stand in front of a group and give a talk about her business. So, she started by practicing in front of me, including dressing for the image she wanted to convey. And then, she practiced in front of small groups of seniors from her church and she got her first client. As far as her wish list, it included working the 4 day week, getting married, having a family and earning as much as a partner in somebody else’s law firm in significantly less time. Her income last year was over $400,000, she works Monday through Thursday, 25-30 hours a week and last year she and her husband had a their first child. So far, she is living her definition of success.
Next week, I will share with you Tip #2, REMEMBER, IT’S ALL ABOUT THE NUMBERS SO MAKE SURE YOU KNOW YOURS.
Visit us at Bay Area Business Coaching, www.bayareabusinesscoaching.com, to learn more.
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