Tips from the Top - July 2015
7 Steps before Signing a Letter of Intent
Buying and selling a business can be a daunting task. If you’re planning on selling your business, take a moment to explore these 7 steps to follow before you sign a letter of intent…!Read more
Before You Add a Partner
So, you are thinking of acquiring a partner in your business. Maybe you want a partner to spread the workload or liability. You could have differing areas of expertise and want to become a “one-stop shop.” Or maybe you’re looking for someone to take over when you retire.
Either way, think before you get “engaged” and sign those final papers! As Lamar Curtis of IAG put it, “a partnership is like a marriage without the good parts.” Before moving forward, consider these suggestions…
Categorize Investors and Buyers
When raising capital for the business, I always recommend separating the potential investors into "A," "B" and "C" categories. The "A" group should be your best prospects (due to financial capability, the ability to bring more than capital to the party, industry knowledge, etc.). Because small business owners so rarely raise capital, I believe that they should start with the "C" prospects. Make your mistakes with the less desirable investor candidates, learn what questions will be asked and develop comprehensive answers to them. Revise your business plan or investment vehicle according to what you have learned. Then address your best prospect armed with better knowledge and experience, as well as a better rehearsed pitch. The same strategy works if you're seeking potential buyers for the business.
Selling Your Business Secretly
If you are planning to sell your business without a business broker and want to do it more confidentially, you can set up a separate legal entity for the purpose of the sale of the business. Go to your Secretary of State and for a few dollars you can set up the new entity. Use a Post Office Box for the address. This way you can send letters and talk about the sale of your business without letting people know it is “your” business. You can set up a phone number through Google (it is free) or you can use an answering service for incoming calls. Basically, for minimal cost you can have a completely separate entity to use for selling your business.
What Would You Do If You Weren’t Working?
As business owners, it’s easy to say we want to work fewer hours. But is this really true? Do you know what you would fill your time with if you were working less? More often than we want to admit, business owners spend time working on evenings and weekends because they’ve dedicated so much time to their business that they now have no hobbies. Sure, there’s always more work to be done, but this will be true whether we work that extra Saturday or not. If you want to find a way to work fewer hours, start by finding a hobby you enjoy to the point you will schedule time for it into your week. If this sounds difficult, find a class to take or a group to join that has a scheduled meeting time. Once you start making time for this outside commitment, you’ll realize that your business can get by – without you putting in those extra hours.
Are You Still Tap Dancing to Work?
It is really easy to get into business but hard to get out. Make sure you have your exit strategy/succession plan in place and work toward it. It is important to love what you do and to exit before it isn’t fun.