Friday, August 24, 2012

The Power of the Word No When Selling a Business

The power of the word No when selling a business is immense. It is especially true in this difficult economy. In a normal market it is difficult to sell a business but the current market has a few more challenges. Let's have a look why.

To sell a business you need a buyer or nothing will happen. To be more accurate you need a buyer that is motivated just as you need a seller is motivated. A judge once made a ruling that is known as Revenue Ruling 59-60 that I've abbreviated that says Fair Market Value is "the price at which the property would change hands between a willing buyer and a willing seller when neither party is under any compulsion to buy or sell nor both parties have reasonable knowledge of the facts."

That sounds easy and simply enough but when selling a business or buying a business, as both parties soon find out, there is much more to it and can get complicated. The first complication comes along when there is a landlord. A landlord is in the business of making money by renting or leasing their real estate. A landlord is under no obligation to accept the buyer and allow the lease to transfer from the seller. A landlord has their own risks and responsibilities they need to manage. To help them do this they will ask the buyer to provide a personal financial statement, a copy of their credit score and credit report and other personal information they decide is necessary. The seller can think the buyer will be a wonderful tenant but if the landlord disagrees you have your first no.

If the buyer needs to obtain finance to buy the business, you are now looking at your second no. The banks are reluctant lenders in this current economic environment. There is no question it is getting better but over the last few months I have been working with SBA lenders and I have finally been successful at bank eight. That is, after a no from seven different banks I was finally able to get a yes from bank number eight. And this is not unusual. Part of the reason the banks are cautious with the loans they approve is because each bank has a slightly different focus. What it may take to get a yes from a bank is the geographic area they are willing to do loans, the industry of the business, the management experience of the buyer, the credit score and credit report of the buyer. Some banks are no longer willing to approve a loan to a buyer if they have ever had a bankruptcy or have a poor credit score. These are some of the factors and there are others so getting a yes from a bank takes hard work and persistence, plus a business they like and feel they understand.

Tuesday, August 21, 2012

Selling a Private Company: Should I Tell The Staff?

Last week I took a call from an extremely agitated client. One of his staff had found out that the business was for sale. Now our client was in damage limitation mode. The employee involved worked in the warehouse. She had talked it through with her workmates who had suggested asking the warehouse manager if it was true. He was as surprised as the staff member and took it up with my client's PA, and the Operations Director. In short the cat was well and truly out of the bag.

Does the cloak of confidentiality inevitably break down in every transaction? Absolutely not, but it can happen, and this set me thinking about the best approach. Is it best to tell your employees or to keep quiet?

What are the fears that make an owner decide to keep quiet? At the least serious end of the spectrum a fear that staff will feel let down, or even sold out. Most business owners I know are tough enough to cope with this. More serious concerns might be that fear of job losses will impact quality or customer service. Could anxious sales staff tell customers causing a flight to the competition? Might key employees start to look for new jobs? Any of these things might jeopardize the sale of a company or reduce the selling price.

Monday, August 20, 2012

A Good Credit Score Is Critical to Business Success

A good credit score is critical to business success and this seems simple enough. However it plays out in many different ways. When a new business starts out, it makes sense to keep costs low and save time by simply operating the business as a Sole Proprietorship. As the business becomes successful, the business owner wrestles with many aspects and one of these includes if and when to move from a Sole Proprietor to a separate legal entity such as a corporation or LLC. This is an important decision as legally separating the business assets from the owners personal assets may provide some protection if the business loses a lawsuit. It also helps when the business grows and needs access to finance or capital to grow or wants to apply for credit from suppliers. Moving into a new legal entity can be a good business decision.

One of the reasons to consider when making this move is that it allows the owner to separate their personal and business assets. Personal assets are fairly obvious as they include the family home, car, family bank accounts and personal effects. The business assets are also fairly obvious and include items such as the fixtures, furniture and equipment, the inventory, goodwill items such as the name of the business, and any intellectual property you as the owner create.

Hopefully from day one of opening the business, there is also a separate checking account and bank deposit book for the business that is kept separate from the business. This separation may mean if the owner is sued, if the legal action has any negative outcome may only touch the business assets and not the personal assets. Plus there is always insurance to help mitigate the owner's risk.

Sunday, August 19, 2012

How To Establish The Entrepreneur Mindset Through Success Coaching

I love entrepreneurs. In a lot of ways, they may be the most impressive people in any given walk of society. While it is easy to laud the more prolific professions--athletes, musicians, actors and artists to name a few--there is something magnetic, if not inspiring, about how entrepreneurs perform in their business and life.

Indeed we can learn much from the astounding performances of those lauded professionals of sport and culture, however let's take a deeper look into what it means to think like and entrepreneur.

As a success coach, I have the privilege of working with people who are focused and committed to pursuing their life's purpose: their MISSION. These are the entrepreneurs and creatives, the innovators and difference-makers. They tend to be big thinkers. They are leaders. And they are very certain about one thing: They are not content to toil long hours in dead end careers or pursuits that bring them little or no satisfaction.

Thursday, August 16, 2012

How to Start Online Without Money

IF you want to start online lots of people will tell you that you need a website, or two, or three.

While it is true that you will eventually need a website to build a residual income by having a squeeze page, or a blog, you can first start online without money, i.e, by not paying for having a website.

There are actually many ways you start online without money.

They are:

Having a Facebook account, and starting a Facebook fan page and driving traffic to it via the normal ways.

Set up a YouTube account and post videos to your account either using a web camera, or iPhone.

These are the best two ways that you could get started online without paying money for getting a website.

There are advantages to these than having your own website, but, there are also cons as well.


The advantages of these two methods are that you are on the two top traffic sites and unlike when you first set up a website, you don't have to worry about backlinking properly because wherever your backlink is, you are using the two top traffic sites on the internet that are classed as "authority sites."

Another advantage is that YouTube videos rank better in Google, and you are more likely, if done properly, to rank a video better in Google than a website.

A website or blog may take a while to build up page rank, whereas a video can be an instant hit on the rank checker.

Another advantage is that your affiliate links or website links will get more clicks if you post videos - but you have to do it right.


However, there are a couple of disadvantages, and these include:

1) Your YouTube account may be shut down at any time or flagged if you are caught doing anything improper or unusual in Google's eyes. Google own YouTube. Technically, your YouTube channel is not yours..

2) Even if you were not doing anything improper, it could take a while for you to get back your channel - in some cases you may never!

Tuesday, August 14, 2012

Eminem: Life Lessons for Entrepreneurs

Eminem. Slim Shady. Marshall Mathers III
. Love him or hate him, no one can deny that he leaves an indelible impression, nor can one argue his staying power.

Sure, he is not the only kid to come from a poor and broken home, or to have changed school every few months, or to have flunked the 9th grade three times. There are plenty like him who don't make it; but, make no mistake, Eminem has earned everything he has, fair and square, and there are inspiring life lessons to be learned here, for every entrepreneur pursuing a dream.

When the Going Gets Tough, Eminem gets Going (and then some):

Eminem is a fighter. He has overcome struggles, both physically and mentally, when most would have collapsed from overwhelming exhaustion. He's taken on challenges hardly suitable for the faint hearted (battling the Goliath of hip-hop as a young, white male). He had little emotional support from his family (his father left him when he was 18 months old and was raised by his mother on welfare); the one positive influence in his early life, his uncle Ronnie, committed suicide in 1991. A few years before that, Eminem himself almost died after being beaten up by a bully in middle school, leaving him in a coma for ten days. Barely in his early 20s, Eminem has a daughter. To top it off, rap labels continue to reject him because of the color of his skin, regardless of his rap skills. The odds were stacked against him before he was even out of the gate. Juggling the responsibility of a father with a less than stable career choice, e.g. aspiring white rapper, is enough for any sane person to go crazy.

Saturday, August 11, 2012

Hello Entrepreneur - Meet the Rule of 72

"Entrepreneurship is living a few years of your life like most people won't, so that you can spend the rest of your life like most people can't." -- Anonymous

This concept is appealing to most if not all Entrepreneurs. That's why it's baffling that most Entrepreneurs never make it to the point of living the life of their dreams.

Fact: money is and will always be required to survive. Most people (Entrepreneurs included) work hard for money and spend that money on doodads and liabilities: things that will either sit somewhere without producing a return on the investment used to purchase it or worst; things that cost more money to maintain while siting somewhere without producing a return on the investment used to purchase it.

Wealthy people use the money that they work for to purchase assets: things that will generate a return on the investment used to purchase it. There by putting their money to work for them. They then use those returns to purchase doodads and liabilities.

Friday, August 10, 2012

The Competitor Myth: Why You Should Never Sell Your Business to a Competitor

It is hard not to think of a competitor as your buyer. After all, who would want to buy a web-design business other than someone who knows how to design websites. Or a printing business, other than someone who knows how to work printing machine. This is reasonable logic. It is also the commonly held belief among business owners that they will eventually sell to a competitor. Indeed, probably someone that you already know of, and who knows of you and your brand.

However, you will never achieve the best price for your business by selling to a competitor. Ever. The simple reason is that a competitor will only ever value your business by looking at the turnover and profit and making a calculation based on how long it will take them to earn back the price they pay for your business. In other words, they are valuing your business on a 'return on investment' basis. For a competitor, the purchase of your business is rarely a 'strategic' purchase.

Achieving the maximum value for your business is all about finding a buyer who is the right strategic fit for your business. In other words, a buyer who will benefit to the maximum extent by owning your business - who has the potential to make the most money from your business. Because such a buyer will be prepared to pay more for your business than any other purchaser.

Wednesday, August 8, 2012

3 Ideas for Getting Out of Your Comfort Zone

Another saying I love that my husband shared with me is just because something feels good doesn't mean it is and just because something feels bad doesn't mean it is. Staying in our usual routine may feel good but it doesn't get us anywhere. I know that if you are reading this you want to grow so here are some things you can go this week to get out of your comfort zone:

• The number one thing you can do to move yourself forward is put it in writing. I have a recent example of how this worked for me... I've been wanting to get a spiritual adviser for some time now and there was a woman I saw every month who I wanted to ask. Month after month went by and I would think about asking her but I wouldn't do it and I'd leave telling myself I'd ask her the next month. Finally, I added it to my One Year Goals and within two weeks I saw her again and I finally approached her about it. I almost didn't though. I almost waited another month but I knew it was in writing and I wanted to check it off my list. So, write down one thing you will do this week to stretch yourself out of your comfort zone.

• You don't have to do it all at once. Break your goal down into manageable pieces. For instance, say you absolutely hate networking. Every time you think of it you imagine having to be witty, charming, and making sales. Relax. It doesn't work like that. All networking requires is for you to show up and make friends with a couple of people. Networking isn't about going to an event and "wow"-ing everyone with your amazing products and expertise and walking out with connections with everyone in the room. Start by choosing a group you want to visit and then show up and be friendly. It's that easy. No pressure.

Monday, August 6, 2012

Is Democracy The Enemy Of Entrepreneurialism?

We all love democracy, right? It's the best way to organize a society, right? Everybody gets to vote? Well, maybe. Let's take a closer look. First of all, chances are you don't live in a democracy. If you live in the United States, you live in a participatory republic. This means you vote for people who make the rules. You don't make the rules yourself. But let's not split hairs.

How can democracy be in any way against people who want to build and thrive in private industry? After all, that's what entrepreneurs do, right? Think up stuff to make and sell to people? And isn't that the basis of all free market capitalism? People selling stuff to each other on the open market?

At first glance, it would seem that a democracy, or something close to it, is best for business to thrive. But is it really?

First of all, let's look at something called "time preference." This is the idea that people tend to postpone present satisfaction in exchange for future satisfaction. The lower your time preference, the more likely you are to put off pleasure now for more pleasure later. The higher your time preference, the more likely you'll just take the goods now and let the future bring whatever it's going to bring.