May 20, 2020
Today's episode of the podcast, Robert Hirsch from Freedom Factory discusses "How Can I Live My Best Life by Selling My Business".
Listen to the podcast, watch the video, or read the transcript below.
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Transcript of Podcast
Whenever I go to a cocktail party or a dinner party and I meet a fellow entrepreneur, I usually get the same question, which is how much to sell your business for. There's lots of videos and lots of tools and many things that I've done in the past that will talk to you about valuation or multiple or earnings or all the math that goes into selling your business but what I want to talk to you about today is a bit more of the art. What I mean by that is really as an entrepreneur, what does it take for you to live your best life? So I remember early on in Facebook's days, Mark Zuckerberg had a chance to sell Facebook to a private equity firm. I believe it was John Dora Kleiner Perkins for $50 million.
And John Doerr told Mark Zuckerberg that with 50 million, you can do anything you want. Mark Zuckerberg had a very thoughtful response, and it was only in his twenties he said, I would do that, John, but I don't have a better idea than this. And I remember when I first heard that story, I thought about how mature he was because he knew that he was on a big idea.
And so when you think about selling your business, what I want you to think about is what is a bridge to the other side? Do you have a large family or a small family? What does it take to create work for you where you're not necessarily worried about finances from here on out? Do you have seven kids going to private school or do you have no kids and live a pretty simple life?
So, how I frame that is you want to make sure you're building a bridge to the other side, not just appear into the middle of the Lake. Because if you sell your business and immediately you have to start a business to meet your financial needs. What did you really accomplish? It makes more sense to put your wood behind the arrow that's really penetrating, or what I mean by that is to really put the effort into the business.
It's already got traction to make sure you build a bridge to the other side. Now, when we talk about it, we can look at comparable sales and we can look at multiples and we can look at earnings. We can come up with a good idea for it. But the one other factor that I would think about on it is, how long do you want to close?
Are you looking to sell close sometime in the next two years? Where you're looking to close before the end of this calendar year. Because if you are, your price and your strategy is going to be a little bit different, right? If you've got a two-year timeline, you can come out very high and start lowering it down to find the market spot.
On the other hand, if you want to close before the end of the year, maybe we start out more aggressively, get more buyers interested and create a bidding war. So there's lots of different strategies. When people say, how much to sell my business for. I'm Robert Hirsch from Freedom Factory, all we do is help entrepreneurs buy and sell their businesses.
Now, if you have questions either on the art side or the science side of how to sell your business, why don't you give us a call for a free appraisal? We look forward to talking to you soon, and thanks for spending your time with us.
Thank you so much for watching. Please hit like and subscribe and we'll see you soon.
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