Planning on exiting or selling your business to a client, co-worker or family member can be stressful. These articles cover some of the challenges business owners face when planning to exit their business.

How Will You Value the Sale of Your Business

9881157_sWhen deciding whether to sell your business you probably have one question: How much will I get?

There are different ways to find the answer.

The value of your business is constantly changing. Some industries have standard valuing practices, such as selling for three times estimated book value or a multiple of cash flow, but transaction specialists use several standard ways to value your business.

1. Income Approach

This is a standard valuation. The buyer of a business looks at the transaction as an investment, so they focus on cash generating and growth metrics.

Pro Tip: Ask your analyst to focus on the Discounted Cash Flow Analysis approach. This approach factors in the future value of the cash-generating potential of your business and not the standard five- to 10-year outlook.

2. Market Approach

Under this approach analysts will compare your business to other businesses. They make comparisons to public companies or, similar to residential real estate, they will look at recent transactions in your area.

Pro Tip: Obtaining a valuation on a routine basis will help you take immediate advantage of market opportunities.

3. Asset Approach

Use this approach as a last measure. Analysts will use this method to determine the value of your company’s assets. No potential value-adds or growth will be reflected in the sales price using this method.

Pro Tip: Know your definition of financial independence. When the sale of your business meets your definition of financial independence, don’t hesitate to sell!

Knowing how transaction specialists calculate the value of your business allows you to focus on the key metrics that will ultimately impact the sales price of your business. 

I found this tool while looking to find ways to measure the growth of some of my clients business.  We found it really helpful and I would like to invite you to get your Value Builder Score.  There is no cost or obligation.  It will only take 13 minutes to complete.
Our research shows that companies achieving a score of 80+ out of a possible 100 get offers that are 71% higher than the average company. Whether you want to sell soon or run your business for decades, getting and growing your score makes economic sense.

Get your copy of the FREE REPORT… “12 Fatal Mistakes You Can Make When Transitioning Your Business”

I wish you all the insight and wisdom need to set your plans in place.  Until next week.

Health, Happiness and Abundance

Michael Stelter   Advanced Business Coaching, Inc.

“We help entrepreneurs leave their businesses with health, sanity and fair compensation for what they’ve created”

Watch the video and download your Free Report to learn how we can help!

8 Mental Habits Of Successful People

Executive CoachingWhen we look at ways to innovate, modify or change ourselves or our business, we often need to look at 3 different things… What do need to START, MODIFY or STOP?  Sometimes, success comes not from what you learn to do but what you learn to stop doing.

That bit of wisdom comes from Sandja Brügmann, serial entrepreneur and founder of the Passion Institute, a recently launched online educational program and consultancy for executives and entrepreneurs. “Once we have developed understanding of how we interfere with our visions and goals, then comes the challenging process of unlearning and changing specific behaviors,” she explains.

Unlearning is hard work. “It requires one to move out of automatic behaviors and into conscious understanding, where we take control of our own actions and lives,” Brügmann says. “It requires confronting uncomfortable feelings and an attentive vision for a different business life.” In fact, she says, it takes many of the same skills that entrepreneurs need to succeed in their businesses. “It’s a real act of self-love at a deep level,” she says. It’s also what you need to do to become a transformational leader.

What are some of the behaviors we all need to unlearn to become effective leaders? Here are the ones Brügmann says she encounters most often.

1. Pleasing

The need to please others comes from fear of not being good enough and fear of being rejected, Brügmann explains. “We engage in pleasing behavior in order to feel that we are OK or loved, but ultimately to make ourselves feel safe,” she says.

This is a behavior even experienced executives often need to unlearn, she adds. It’s a matter of striking the balance between giving too much and giving too little. “It is a learning process to find the middle ground, where giving comes from a centered and whole place–the only place where it can truly be of value to yourself and others,” she says. We need to start by “filling ourselves up,” building both self-confidence and self-care skills.

“It requires a deep understanding that we are good enough and worthy of love and belonging,” Brügmann says. “From there, we are able to truly become caring, giving, and serving leaders, and make a positive impact in our companies and the world at large.”

2. Being fuzzy about boundaries

“Most people need to learn to create better, healthier boundaries,” Brügmann says. Many of her students need to unlearn the belief that saying no is an unkind thing to do. “In truth, learning to say a clean and kind no is a key foundational skill to successful leadership,” she says. “For many of our entrepreneurs, it’s a big aha! moment when they learn that saying no is in fact saying yes to yourself–taking your own business dreams and visions seriously.”

Loose, fuzzy boundaries create dysfunctional organizations, she adds. “Learning to create healthy boundaries and communicating them with empathy and kindness creates clarity, safety, security, and order,” she says. “A good leader sets a clear framework for everyone in order to set his or her entire team up for success.”

3. Not speaking your mind

“Holding back from saying your truth not only creates festering and negative emotions inside the withholder, but also deteriorates relationships and weakens the health of your organization over time,” Brügmann says. This is why unlearning this behavior, and understanding that it benefits no one, is crucial.

It’s not necessarily easy, she adds. “It takes courage and the willingness to learn new assertive communication skills, as well as relational management skills,” she says. “Leaders who do learn these things are exceptionally successful at driving their organizations forward.”

4. Avoiding failure

This is the surest way to kill success, Brügmann says. “Many people have a desire for success and fulfilling their dreams but an unwillingness to fail–or rather a desire to avoid experiencing the painful feelings that can accompany perceived failure,” she says.

Getting over this resistance to failure means moving away from the notion that you are a bad person if you aren’t able to create the successful company you envisioned. “Instead, it’s better to think of failure as the procrastinating behavior that fear holds us in when we never take the chance to live our dreams,” Brügmann says. “Real failure is not taking our inner yearnings seriously enough to try creating them for ourselves.”

5. Letting fear hold you back

“Fear is a natural human emotion, and we all experience it,” Brügmann says. The difference between people who take control of their lives and those who don’t is that the former have learned to cope with and take control of certain fears–which takes a lot of inner work. “It requires self-awareness, willpower, perseverance, resiliency, and a large dose of courage,” she adds. “Entrepreneurial pursuits are not for the faint of heart.”

6. Negative thinking

“When something bad happens and we attribute negative meaning to it about ourselves, we may be heading for a downward spiral,” Brügmann warns. “That’s something we most definitely want to unlearn.”

The solution is to take control of our own thought patterns, she says. For example, no one likes to hear no from a potential client or investor. However, if it does happen, it doesn’t mean that your project is bad or that your idea isn’t a good one.

“It probably has nothing to do with you as a person,” Brügmann says. “Don’t overanalyze it. Don’t make it mean anything positive or negative about you.” No one client or potential investor is the single key to happiness forever, she adds–there’s always someone else to pitch. “Think about what your next move will be to achieve your goal,” she says.

7. Getting really, really busy

“Unfortunately, it’s a common modern-day myth that being busy or having a packed schedule is equivalent to being a person of importance,” Brügmann says. “Gaining self-value and worth solely on the basis of being busy is a dangerous and self-sabotaging behavior that leads to, if anything, a deeper disconnect from your passion, purpose, and true fulfillment.”

Too often, she adds, people start unlearning this behavior only after a major stressor, or perhaps after someone they love leaves them. “Learning to slow way down can be very difficult for some people, especially those who live in overdrive,” she says. “Focusing on stillness, silence, and solitude, however, can be the doorway toward a deeper connection with self. It’s also called getting off the hamster wheel.”

8. Looking for your power outside yourself

“At the center of the storm is calm. Find your steady and centered place within yourself, and stay here as much as possible,” Brügmann advises. That calm place will give you self-confidence and allow you to stay committed to your long-term goals in spite of the short-term ups and downs of business and life.

“If your well-being, peace, and happiness depend on external factors, your level of stress will be too high to successfully stay on the entrepreneurial path for very long,” she predicts. Instead, she recommends trying to stay somewhat detached from external events. “You’ll be able to make better decisions for a larger good,” she says, “instead of just relieving short-term stress or fear.”
To your success,
Michael Stelter
P.S. To take a Test Drive on our system visit http://abcgrowthacademy.com/guidedtour  We created the ABC GrowthAcademy System™ with the perfect combination of online resources, tools and support to get you out of any financial distress you’re presently experiencing… help you get laser-focused on your highest income-producing activities… and help you develop and then apply the fundamentals that build multimillion dollar businesses. click here to see for yourself.
If you would like learn more about how you can learn what you need to STOP doing to grow your business, call Coach Michael Stelter at Advanced Business Coaching, Inc. (262) 293.3166.

Case Study: Start Up Funeral Home Takes 18% Market Share

success-logo

Funeral Provider

Business To Consumer

 

Client Situation – AT A GLANCE

 

Find a niche and serve it extremely well … the clients will come

CHALLENGES:

  • New provider of funeral services to a market that had the highest concentration of funeral providers per-capita in Wisconsin.
  • Limited working capital
  • Consumer education of the benefits of alternative funeral services

SOLUTIONS

  • Solid 10-year business plan with realistic projections for growth and market share penetration.
  • Business planning included an exit plan for the owners after 5 years in business.
  • Weekly measures of KPI’s
  • Alternative guerrilla marketing strategies to reach their target market
  • Multiple product and service offerings to generate value-add service to prospective client base

RESULTS

  • Investors were secured to allow for additional cash flow needs
  • Non-traditional marketing methods focused on relationship-building strategies with prospective clients and strategic partners.
  • Annual growth rates ranged from 23%- 57%
  • After just 3 years in business, 18% of the funerals conducted were performed by this provider.

HERE’S THE STORY

Less than 4% of business that started 5 years ago are doing business today. Those numbers reduce to 1% when you look back 10 years. Those numbers are not encouraging, but entrepreneurs are willing to face the challenges in hopes of overcoming the odds to achieve success.

Funeral Service is a business that most people don’t know, or understand, but is one of those things you don’t think about until you need. Understanding the business model and being very clear on the products and services needed by your target market were the keys to success for these Start Up business owners. After meeting the owners and investors, we conducted an in-depth Evaluation / Alignment with the team members, vendors and suppliers. From those meetings, we were able to create a clear picture of their desired results.

When Advanced Business Coaching was introduced to the owners, we generated a 10 year (long-term plan) , a 36 month Road Map with success metrics and milestones and a 1-year action plan that would be visited monthly to ensure the Road Map would be followed. Quarterly meetings were held with investors and team to ensure that transparency of all ac- counting and activities was achieved. Immediate focus was placed on dividing roles and responsibilities of the principles of the business. The Organizational Chart for High Performing Companies was used to establish balanced growth and accountability. Empowerment measures were put in place to allow for key decisions to be made with- out unnecessary meetings.

The needs and wants of the Baby-Boomer demographic was a key component to the establishment of the marketing programs being developed. Focus groups and over 100 interviews were conducted. From this information, a plan was developed to deliver ‘education-based’ presentations to all interested parties. By diverting marketing/advertising dollars from traditional ‘image advertising’ to more direct-response approaches, the client was able to spend 50% less than industry averages and produce 3 times the results.

The first 24 months was time to develop systems and processes to maintain contact with prospective clients. Innovative marketing strategies and educational seminars were implemented to encourage regular contact between prospects and business owners. Strategic partner relationships were formed to find additional connections with their target market. After 5 years in business, market share is currently 18% and growing. What will happen in the future is still being determined, but growth rates continue and families happily call when the need arises

To take a Test Drive on our system visit http://abcgrowthacademy.com/guidedtour

To your success,

Michael Stelter

P.S. Please remember that at any time you feel ready and qualified to move forward and acquire the professional help that can enable you to build the business of your dreams, just click here and check out our ABC E-Learning Marketing System™. It’s helping small business owners just like you get the answers and the help they need to build the business they have always wanted.

We created the ABC E-Learning Marketing System™ with the perfect combination of online resources, tools and support to get you out of any financial distress you’re presently experiencing… help you get laser-focused on your highest income-producing activities… and help you develop and then apply the fundamentals that build multimillion dollar businesses. click here to see for yourself.

 

 

Case Study: Family Trade Turns Into The Family Business

success-logo

Residential Painters

Business To Consumer

 

Client Situation – AT A GLANCE

 

Just because he knows how to paint, doesn’t mean he knows how to run a painting business…

CHALLENGES:

  • Finding the working capital to meet payroll and material expenses.
  • Finding qualified workers
  • Development of replicate-able systems to build a solid business.
  • Limited understanding of business financial reports and the value the information brings to the business.

SOLUTIONS

  • Solid business plan for slow and steady growth of production and overhead costs.
  • Clear understanding of the 5 major areas of the Organizational Chart for High Performing Companies
  • Balanced efforts in all work-rooms of the business
  • Utilization of employee pre-hire assessment to determine learning traits and skill-sets.
  • Value-add relationship for all customers to ensure repeat business and active referrals.

RESULTS

  • Business growth is within 5% of plan numbers.
  • Employee retention is well above industry averages
  • Cash flow needs have been met and no additional financing has been needed since year 1

HERE’S THE STORY

In the 19th and early 20th century, it used to be a tradition that sons were taught the trades of their fathers.  The sons would learn the skills of their father as they were growing up.   This is what led to this new business owner getting bit by the ‘entrepreneurial’ bug.

He is a 3rd generation painter, but rather than work for someone else, he decided he wanted to own his own business.  But, as most business owners know, there is more to owning a business than just delivering the quality product and service you sell to your customers.

An existing client referred this business owner to Advanced Business Coaching.  When we first met this owner, he was extremely frustrated with the Business Owner / Business Leader,  Marketing / Sales, Systems / Team and Customer Service/ Customer Care areas of his business.  Defining each area and separating the principles, practices, measures and metrics for each area, we were able to put together a plan for balanced growth and his frustration lessened.

As with most business owners, his talents were in the Product / Production area of his business.  Establishing the Vision and Culture of the business was the corner-stone of all future growth.  Once that was written and confirmed, we started the search for team members that would thrive and grow within that culture.  Utilizing group hiring processes and pre-hire employee assessments we were able to save time and find qualified employees that were comfortable delivering the quality work that was important to the owner—and his customers.

Creating a shared risk/reward compensation plan for all employees was an important part of the business model that contributed to the first years Family success.  Having all employees concentrating on cost containment, productivity and efficiency led to better than planned job profit analysis and high than expected income by the team.

For the small business owner, finding balance in their business is imperative to sustained growth and long-term success.  Working in all areas of the business to achieve the most important things that would contribute to strengthening the business.

Focus on delivering customer expectations was the biggest area of concentration over the first few years.  Happy customers provided quality referrals, held ‘open house’ parties to show neighbors and friends their newly painted home, and made took advantage of opportunities for the owner to do interior work that kept his team working year round.

To take a Test Drive on our system visit http://abcgrowthacademy.com/guidedtour

To your success,

Michael Stelter

P.S. Please remember that at any time you feel ready and qualified to move forward and acquire the professional help that can enable you to build the business of your dreams, just click here and check out our ABC E-Learning Marketing System™. It’s helping small business owners just like you get the answers and the help they need to build the business they have always wanted.

We created the ABC E-Learning Marketing System™ with the perfect combination of online resources, tools and support to get you out of any financial distress you’re presently experiencing… help you get laser-focused on your highest income-producing activities… and help you develop and then apply the fundamentals that build multimillion dollar businesses. click here to see for yourself.

 

 

Case Study: 27% Growth While Owner Is Away

success-logo

Heavy Equipment Repossession 

Business To Business

 

Client Situation – AT A GLANCE

 

Business Is Reorganized To Allow 27% Growth While The Owner Is Away!

CHALLENGES:

  • Revenue streams were concentrated 60% on 2 clients.
  • Partner disengaged from the business.
  • Employees compensated by salary with incentive pay or production goals
  • Loosing $50,000/month

SOLUTIONS

  • Established Key Performance metrics in Production, Sales and Customer Service.
  • Adjusted compensation plan adjustment to provide above-average income to strong producers
  • Diversified customer base so that no customer is responsible for more than 20% of monthly revenues

RESULTS

  • Made necessary expense reductions to get to Break Even within 60 days.
  • Negotiated a transition of 100%business ownership to manger-owner.
  • Margin contribution goals from all producers with incentive pay for strong performance.
  • Increase Sales by 135% in 2 years
  • Created an Organization that allowed the business owner to be away from the business for 6 months.

HERE’S THE STORY

Frustrations of business ownership, flat sales over the past 4 years, lack of employee productivity and accountability, and a partner that was disengaged from day-to-day operations while continuing to take a significant salary were all symptoms of the pain being experience by this service provider to the financial services industry.

An existing client referred this business owner to Advanced Business Coaching in hopes that we could provide a path through the challenges they were experiencing.  After a thorough Evaluation / Alignment with the client, team members,  vendors and suppliers, we were able to see a clear picture of the current   situation and present a 36 month Road Map to achieve the longer-term goals envisioned by the business owner.

Immediate focus was placed on expense reduction and strengthening the  balance sheet of the business.  Cutting costs, liquidation of assets and alternative financing options were evaluated and implemented over the first 60 days to stop the ‘financial bleeding’.  During this period, we also  developed a clear understanding of employee productivity and how that   related to Margin contribution to the business.

Development of a new compensation plan that rewarded high performing   employees was implemented within the first 90 days.  Adjustments in  employee new-hire process, employee assessments, supervisor deliverables and clear understanding of the roles and responsibilities of all employees created a pro-active environment of growth and profitability for the company.

Over the first 12-24 months, regular team meetings focused on short-term deliverables for each department, combined with updates on company successes and failures, created an culture of trust within the team and a willingness to work together to grow the business.  At the end of the second year of working together, revenues had increased by 135%, while net profits grew to 11.5% monthly.

The strength and commitment of the team was proven when the owner was afflicted with a life-threatening health condition.  He was completely  disengaged from the business for over 6 months.  During that time, the  Advanced Business Coaching Leadership team provided leadership insight and guidance and direction the business management team.  During that time away,  the business revenues grew by 27% and net profits increased by 32%.

To take a Test Drive on our system visit http://abcgrowthacademy.com/guidedtour

To your success,

Michael Stelter

P.S. Please remember that at any time you feel ready and qualified to move forward and acquire the professional help that can enable you to build the business of your dreams, just click here and check out our ABC E-Learning Marketing System™. It’s helping small business owners just like you get the answers and the help they need to build the business they have always wanted.

We created the ABC E-Learning Marketing System™ with the perfect combination of online resources, tools and support to get you out of any financial distress you’re presently experiencing… help you get laser-focused on your highest income-producing activities… and help you develop and then apply the fundamentals that build multimillion dollar businesses. click here to see for yourself.