Apr 13, 2020
Today's episode of the podcast, Robert Hirsch from Freedom Factory talks about "Can I Sell My Business By Myself or do I Need Help?."
Listen to the podcast, watch the video, or read the transcript below.
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Transcript of Podcast
Hey, it's Robert Hirsch from Freedom Factory, and I want to talk to you about choosing the right partner to help you sell your business. Now, if there's a lot of people that say, Oh, I know somebody, but just because you know somebody doesn't mean that you have the right person that's going to maximize the value on the biggest asset in your life.
Right? People say buying a home is the biggest purchase your sale you're ever going to make. And that's certainly not true. If you're an entrepreneur, it's going to be selling your business. So there's a couple of lessons that I found when for us choosing the right partners in terms of clients and for clients, choosing the right partner in terms of broker.
So here are a couple of lessons that I've learned over 20 years that I just don't bend on. One, nothing ever starts out hard and ends up easy. Meaning, if the first conversation is difficult and the second conversation is difficult, or if it's a very difficult negotiation on something as simple as a agency agreement, this isn't going to get better when you go to an asset purchase agreement or a stock purchase agreement, when you go to sell. Things that start off hard end up hard and half the things that started off easy end up hard too. The biggest litmus test for me is I find a partner where it starts out easy and are both singing from the same song book or from the same page.
Now a good way to evaluate that is make sure that you speak the same language. And I've said many times that bankers don't speak entrepreneur and entrepreneurs don't speak banker, and if you need someone to sell your bank, let me tell you now, I'm not your guy. But if you're an entrepreneur that takes accountability for your own results and you want to sell your business, I'd love to have a conversation with you and learn exactly why you built your business this way.
How do your passion and purpose align, and specifically what do you want in the next chapter of your life? What does that look like? So, a partnership and why I call it a partnership. It's not really an agency agreement in terms of a house or you have an agent just walking in and showing it.
The reality is when you sell a business, it's a six month process and sometimes significantly longer. We try and get it done in 147 days here at Freedom Factory. When we go to sell a business, it's really a partnership. What you need to do is run your business and make sure it's as profitable as possible.
The number one reason that deals go sideways when they're on the contract is because the revenue goes like this. The revenue goes down and the profit goes down. It raises concerns in the buyer mind and as any deal guy will tell you, time kills all deals. And when you give the buyer a chance to think about it and to think, Oh goodness, if it went down here, when they're running it, imagine what's going to happen when I do it. And at the very least, that's going to lower your sales price. And in the worst case scenario, it's going to blow up your business. So what I want you to do is do what you do best. I want you to run your business. I want you to make sure it's as profitable as you can. And what we're going to do is what we do best, which is creating deal tension from multiple buyers that are interested in your business. And that's how the partnership works. And that's how we both work to get it across the line.
Now when choosing a partner, make sure they're taking accountability for their results, make sure they think like an entrepreneur. You don't want to create a win lose situation where one partner wins and the other one loses. The way we structure all our deals is we only get paid when you get paid and your success is our success, and that's why we choose our partners very carefully. We don't represent every deal. We're very selective and we're just finding other entrepreneurs that want to sell their business for maximum value.
Last piece of advice, when choosing a partner, trust your gut. You're going to know it in just a few seconds. The best decisions I've ever made business wise are when I trust that little voice, the little voice inside your head, the one that doesn't yell at you, but the one that talks in a whisper.
That is the one you want to listen to. You don't want to listen to the, I should do it now, or they've been around for 200 years, etcetera, et cetera, et cetera. Trust your inner voice. And if you guys see eye to eye, and that's going to make a great partnership. If you don't see eye to eye, it’s not going to work out well in the long-term.
I had a mentor of mine tell me that at the beginning of our relationship, all the information that you need to judge it is available if you choose to see it. So make sure to trust your gut. Make sure to take in all the information you can. If you have any questions about how do you sell your business, how do you choose the right partner? What's my business worth? Why didn't give us a call here at Freedom Factory? I'm Robert Hirsch and I look forward to speaking with you soon.
Thank you so much for watching. Please like and subscribe.
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