“I’m Selling My Business!”
Those were the words I never imagined I would say, and out they came- tumbling out, rushing out, loud and clear as I spoke them into a microphone at an event.
Suddenly it had become so clear to me, I was ready to do this. It was time to let it go. I was ready for the next challenge. But first, I had to plan.
7 years ago I had a business that while it looked ok on paper, wasn’t performing as well as I wanted. Turnover was ok, profit was terrible. I needed to do something, so I threw out every single product line I sold, and kept just one.
I went ultra niche, ultra specialized, made it my mission to become THE expert in this country on horse bits. Turns out, that scary, big, risky decision was one of the best decisions I ever made.
From a pile of confused, “all things to all people”, non profitable mess came a business that grew, and grew and grew. It wasn’t magic though, it didn’t happen over night. There were maxed out credit cards, stealing from peter to pay paul, mistakes and bad investments in marketing that didn’t work.
I worked, I learned, I worked harder and I never gave up. I made a commitment to myself, a promise, that I would go all in. So that’s what I did.
Until the day came that the business because a bit too routine. I got the same kind of calls daily, asking the same questions. Even the flow of sales became routine- Monday was massive, Thursday the quietest day.
I got bored. I started loosing interest, and the rapid growth of the business started to slow. I became my business’ own worst enemy.
I started toying with the idea of selling it, and moving on. People thought I was crazy. The business was so successful, it allowed me to live the life I wanted, I was really working part time hours, so much of it happened automatically because I had done the hard work.
But. I was proud of what I had built. I was proud of the service it offered. And I knew that if I kept it, the business would falter, I would grow to hate it, and no one would win, certainly not my customers.
So in October 2013 I made the decision to sell, and started work preparing it immediately. I started making notes of what I needed to document in the way of systems. I started culling products that were taking up space for no reason. I created more and more content. I learned what I needed to do to sell a business well (as well as legally) and I sought the advice of experts.
In April 2014 it was ready for sale. The accounts were clean, the sales figures were great, the systems were documented and tested. So, I wrote an ad.
Writing an ad for a business for sale is the same as writing any ad- you get what you ask for. It’s basically an exercise in defining your niche.
My first ad stressed the fact that I had enjoyed good cash flow from working part time hours- so pretty much every inquiry I got was from people looking for a passive income from a business that they didn’t have to work in. No one felt right to me, and no one made an offer, not surprisingly.
It took me a while to work out why I was attracting those biz-op kind of people though. I had written an ad that spoke to them, that called them- so that’s what I got.
When I realized that, I wrote a new ad focusing on the results of the business, the turnover, the growth, the profit margins, the client list- the assets and value of the business. It was NOT about the lifestyle it gave me.
The people who enquired after seeing that ad were a completely different kettle of fish. They asked the right questions, they followed up, they did their due diligence. That ad resulted in 4 offers, and the sale of the business settled in October 2014.
Yeah, I could have kept going with it and just watched the cash come in via the online store. Its only once you get to year 3 or 4 that the fruits of all your hard work really start to pay off in your business.
I could have, but I shouldn’t have. I did the right thing selling it. Its gone to the perfect new owner, who after a few months of following my systems to the letter, has stamped it with her personality, her dreams, her ethics and her ambitions. Its grown, and grown and grown.
It’s way bigger now than when I had it, and THAT I am super proud of.
I know that I couldn’t have achieved what she has with it. It needed fresh eyes, enthusiasm and joy- I was jaded, tired and there was no joy in it for me. I had to set it free.
But from the day I declared “I’m selling my business” I knew I wanted to do it right. I knew I wanted the brand to continue on and grow. I knew it was worth more than flogging off the stock on gumtree or trying the local paper.
Most people who sell their business do so under duress- health issues, moving interstate or internationally, relationship breakdowns and court cases. Less than 10% plan, strategize and prepare their business for sale.
Less than 10% of businesses for sale actually are sold for what they could be worth if prepared well.
So what’s the lesson here? There’s a saying that goes: “A business that’s ready for sale, is one worth keeping.”
A business that has been managed to generate the most profit, run leanly, run systematically, can be replicated and easily taught, that keeps good records and communicates well with clients- all those things create a business that is valuable to sell. It also helps you create a business that is worth keeping.
As an exercise for you this week, spend an hour or so considering what you would need to change or improve in your business if you were going to prepare it for sale. Write a list, take some notes. Then, use that list as an action plan to implement between now and the end of the year.
It’s a different perspective that will give you a valuable insight into the health of your business.