Show Me

Don’t show me – show yourself. Look in the mirror and have that conversation with yourself. Are you doing everything within your influence to be the best owner, the best leader, having the best business you can everyday? Or, has time worn down that energy, the excitement you began with on day one? Has the up’s and down’s of the past 30, 40 years resulted in a status quo you’re good with? We get it. We’ve been there and we know exactly the roller coaster emotions you’re feeling right now. You’re not average and you’re not mediocre!

The average person is just trying to survive – not to be their best, not to thrive. Average has a great day, a great week, month or quarter and then coasts. Catching your breath and enjoying the moment is one thing. Being okay with status quo isn’t. At JSP, we look for people who want to be the best, to have great results with great relationships – a great exit and an exciting next chapter. The goal with our Insights is to inform, educate and answer any questions you may have in considering ‘what’s next’.

“…you can never have any team chemistry for this reason. Mediocre people don’t like high achievers, and high achievers don’t like mediocre people.” – Nick Saban

The point of Coach Saban’s statement is there’s one way to create cohesion on a team, any team, and the ONLY way is for the people to buy in to the same principles and values of the organization at the same high standard. Each and every team member must strive to achieve the standard through the process regardless of their knowledge, skills or abilities. Taking your eyes off the end result and focusing on the little things within a process guarantees the result you must achieve. Competition is about being the best version of yourself by meeting and beating the standard. Perhaps you’re asking yourself, what the hell does any of this have to do with selling my business?

“High achievers prepare their life’s work ensuring it’s a transferable asset. Mediocre people just want out, hope they get a reasonable settlement and then regret they didn’t prepare.” – Scott Spector

Focus grasshopper. In an ideal case, sellers need to move from an operating mindset to a selling mindset within a 7 year (or less) exit window. Depending on the complexities and the nature of your desired exit, you’re going to need a minimum of three years unless you are the 1% – who’s done it right since Day One. The ones who aren’t prepared at all may need the full 7, and those who are adequately prepared actually begin 3-5 years before the desired exit*.

What does a sales process look like? Simplistically speaking selling your business involves several key steps, including preparing your business for sale, determining its value, and finding potential buyers. The process typically includes organizing financial documents, addressing any operational, commercial, legal and environmental issues, and negotiating the sale terms to ensure a successful sale and a smooth transition.

Why do some owners succeed and others fail during a process? Success during a business sale process often hinges on having a well-prepared and executed exit strategy supported by a skilled deal team. Failure will result from a lack of preparation, unrealistic financial and terms expectations (the #1 reason so many exits fail), and/or not addressing potential risks. You are in control of your sale! The importance of thorough preparation and strategic decision-making is up to you and your M&A advisor.

What can owners do to prepare for a successful sales process? Start now if you haven’t started already. Everyone everywhere has 7-steps, 10 Must-Do’s and 15 Do’s and Don’ts. We don’t play BS games like that. Your situation is unique –  you’re on point with some things, other’s you’re not. We’re going to identify, evaluate and discuss what you’re willing to work on and what you don’t want to deal with. It’s about understanding circumstances and being okay with your decisions and the financial impact of both. It’s your case and it’s your life. We’re the complementary asset to help you secure your stated goals and objectives.

What are the common attitudes and behaviors of unsuccessful owners? The single biggest detractor financial buyers, investors and strategics have shared with JSP is a detrimental ego – one that lacks humility.

What will no one tell you because they have some agenda? At JSP, we’re in the 7th inning stretch of our careers and we’re prepared to go extra innings. However, what we dislike about our industry is too many people are greedy and won’t tell you what you need to know BEFORE you sell your first business. Here’s the answer: Learn to say ‘NO’ and be okay with the silence once you say it. You control your business case. We will offer insight and suggestions, however the final say-so is up to YOU! What you must decide is:

• How much money you must have to live or maintain a desired lifestyle
• What conditions must be part of your deal, and
• What conditions are not acceptable

You need to know in advance what your boundaries or guardrails are!

1. Your exit floor – the least amount of money you’ll accept
2. Whether you will/will not accept an earnout
3. What you will/will not do with your rollover exit (the rules of engagement) 
4. You have final ‘say-so’ which employees keep their jobs with NewCo and for how long

What are some common characteristics in selling businesses in your industry, sector, segment? Common characteristics in selling businesses include understanding customer demographics, psychographics, behaviors, and preferences, which guide personalized marketing strategies for your specific case. Additionally, effective segmentation based on factors like age, income, and geographic location enhance customer engagement and improve sales outcomes.

What’s working and not, what does it take to fill that gap, can you/will you? A valuation gap arises when a business owner wants to sell their company for more money than a buyer is willing to pay. There will be some things you’ll address and other’s you won’t unfortunately. What we’ve learned in 3-plus decades is unmet expectations often lead to resentment and disappointing results regarding the business’ value. This lack of knowledge and a misunderstanding of the diligence process can be disheartening. As such, too many business owners fail to make any or enough effort or don’t invest any or enough resources in bridging the gap even though it’s costing them millions!

Can you be honest with yourself or does your ego get in the way? Simply put, ‘yes’ or ‘no’.

Which group do you want to be a part of? Buyers either want you or they move on quickly! There’s a number – what you must have after taxes to maintain or enjoy the lifestyle and what you’ll get. The question becomes are you willing to do what it takes in your business at this stage to achieve the price you want? You can keep on running your business until you die if you want. If you want to sell smart, then you have to grow smart. Or, drop your expectations to the level of your current value. Buyers do the same. They add people and process to achieve value they need to generate IRR once the asset is sold for their investors. It’s a proven formula, a playbook that works. Ages ago, there was a Fram oil filter TV commercial that stated, “…you can pay me now, or pay me later…the choice is yours…” You control the last chapter’s sweat equity.

*Source, M&A Source, 2021