Exit Rich

Next week brings the new book, Exit Rich, The 6 P Method To Sell Your Business For High Profit, by Michelle Seiler Tucker and Sharon Lechter.

Read this invaluable book if you are an entrepreneur or business owner preparing to sell your business.

Read this book even if you don’t plan to sell your business but want to learn how to operate at peak performance.

You’ll find answers to your critical questions and issues, including:

When and how do I plan my exit strategy?
What’s the best time to sell my business?
What are the key factors in valuating businesses?
How do I maximize the profits of my business?
How can I optimize my customer and client base?
How do I create an emotional connection between a buyer and my business?
What are the mistakes that sellers make, and how can I avoid them?

Tucker and Lechter explain that buyers will pay top dollar for businesses that operate on the 6 Ps:

People – leadership, team, relationships
Product - deliverable
Process – business systems, communications, marketing
Proprietary – mission, legal, business systems, deliverable
Patrons – customers, clients
Profits – available resources

All six are essential components of any successful business.

Michelle Seiler Tucker

Today, Tucker answered the following questions:

Question: Of the 6 essential components of a successful business, which one is typically the weakest going into a sale?

Tucker: There is not a one-size-fits-all answer to this question as this is very situational. The component that is the weakest for a business going into a sale can be dependent upon many different factors, such as the condition of the overall economy, consumer demand, or the business itself. For example, a business that is dependent on its owner will have People as its weakest component. On the other hand, businesses in the hospitality industry that are currently looking to sell may have products as their weakest component due to the current pandemic.

If I had to pick the most common, however, they would be People or Products. Many business owners do not have the right people working in their business and therefore end up working in their business instead of on their business, a huge mistake. They also do not have tenured management teams in place to run the business after the sale, leaving the buyer with a larger than desired responsibility. As for a business’s products, many companies make the mistake of staying in an industry that is dying. They fail to pivot with changing consumer demands. An example of this is Blockbuster. They saw how Netflix was disrupting the industry they were in and chose not to innovate to keep up with the times, leading to their inevitable bankruptcy. That is why it is important to AIM: Always Innovate and Market.

Weak people or products then leads to weak profits. Weak profits are never the problem, they are always a symptom of not operating on the other five P’s.

Question: Of the top ten mistakes business owners make when trying to sell their business, which one is the most common?

Tucker: The most common mistake that business owners make is not planning their exit strategy from day one. I have always believed that all business owners and entrepreneurs should be thinking about an exit strategy from day one. However, my reasoning for this has changed slightly over the years. In 2013 when I wrote my first book, Sell Your Business for More Than It’s Worth, I researched small businesses extensively and found that 85-95% of all startups will go out of business in the first one to five years. However, when I wrote, Exit Rich, in 2019 and did the same research, I found that the business landscape had changed dramatically. Now, only 30% of startups will fail within one to five years and a whopping 70% of businesses out of 27.6 million that have been in business for ten years or longer will fail.

This is why business owners should be planning their exit from day one, so they do not become part of this startling statistic. When business owners do not think about their exit strategy until they have to, due to an internal or external catastrophe, business is normally trending down and will be worth much less in the eyes of a buyer. This is why it is so important to plan your exit strategy from day one utilizing my ST GPS Exit Model®. We take all of our clients through this GPS system. According to Steve Forbes, 8 out of 10 business will not sell. The more time a business owner takes to think about their exit strategy, the easier it will be to sell their company for their desired price tag.

Question: How best does a seller cope with post-sale seller’s remorse?

Tucker: The best way to cope with post-sale seller’s remorse is to plan your exit strategy from the beginning and to know what you are going to do after the sale of your business. You cannot go through with your exit strategy if you don’t understand where you are beginning. You also need to understand your WHY. Why are you looking to sell your company? Are you looking to retire? Do you have medical bills you need to pay for or are you looking to get out of debt? Are you looking to enter a different industry? Understanding your WHY is one of the biggest ways to avoid seller’s remorse altogether.

Also, you need to be clear on your seller’s sanity check. Before you sell, and especially if you are retiring, you need to ask yourself how much money you need to live on and for how many years. You also need to ask yourself what you are most concerned with regarding the sale of your business. Are you most concerned about the profits on the sale of your company? Are you most concerned about ensuring the happiness of your employees or your clients? Or are you most concerned with the new owner continuing to grow your legacy and taking your company to the next level?

Planning your exit strategy from day one and truly understanding your WHY will help you to avoid seller’s remorse altogether.

Michelle Seiler Tucker is the Founder and CEO of Seiler Tucker Incorporated. She has sold hundreds of businesses to date and currently owns and operates several successful businesses. She has appeared in Forbes, Inc., CNBC, and Fox Business (starts at 8:35 minutes). She has also been a “celebrity judge” on “Pitch Tank” alongside Steve Forbes and Whole Foods CEO John Macke.

Thank you to the book's publisher for sending me an advance copy of the book.

Comments

Why Your Middle Managers Are So Important

The book, Power To The Middle , shows how managers are the crucial link between a company’s ground floor and top brass. “Too often company leaders view middle managers in a negative light as expendable employees who can slow down productivity and overall strategy,” explain the book’s authors and McKinsey partners Bill Schaninger , Bryan Hancock , and Emily Field . “However, new KcKinsey research reveals that this outdated perspective needs to change and that well-developed managers are the strategy that companies must prioritize to succeed today,” they add. Most importantly, by the end of their book, the authors sum up their insights and provide a playbook that will help senior leaders let go of the command-and-control mindset that has hobbled their managers for so long. The authors define middle managers as the people who are at least once removed from the front line and at least a layer below the senior lead...

Read Good To Great

Near the top of virtually every list you'll see of the best leadership books, you'll find, Good To Great , by Jim Collins . The book, five years in the making, and published in 2001, addresses the all-important question of: Can a good company become a great company, and if so, how? Some of the lessons from the book are: "Leadership is equally about creating a climate where the truth is heard and the brutal facts confronted." "Leading from good to great does not mean coming up with the answers and then motivating everyone to follow your messianic vision. It means having the humility to grasp the fact that you do not yet understand enough to have the answers and then to ask the questions that will lead to the best possible insights." "Good-to-great companies use technology as an accelerator of momentum, not a creator of it." "Engage in dialogue and debate." Good-to-great companies are those who have the ability to get and kee...

How To Energize Your Work And Life

Tom Rath is the author of the incredibly popular Strengthsfinder 2.0 book . His latest book is, Are You Fully Charged? The book draws on the latest and most practical research from business and psychology and identifies the three keys that influence most of our daily well-being, as well as our engagement at work : Meaning : doing something that benefits another person Interactions : creating far more positive than negative moments Energy : making choices that improve your mental and physical health "This book will challenge you to stop pursing happiness and start creating meaning instead ," explains Rath. And, by doing so, you will rethink your daily interactions with the people who matter most. "The actions you take throughout every single day accumulate to shape your years, decades and overall life," adds Rath. Even brief interactions count, says Rath, such as exchanging a smile or greeting while passing someone on the s...

How To Survive, Reset And Then Thrive

“Uncertainty is here to stay. Rather than seeing it as an obstacle to overcome, integrate it into your strategic approach to invigorate your high-growth potential and outperform competition under any market condition,” explains Rebecca Homkes , author of the book, Survive, Reset, Thrive . “Most books aren’t honest enough about how hard it is to reset ,” adds Homkes. Yet, resetting and leaning into change is essential. “If you are ready to embrace change as a central element of your growth strategy, this book is for you.” Homkes’ book is a timely, comprehensive, and essential read for business leaders looking to take the next step toward ensuring high growth for their companies. The book brings together more than 15 years of Homkes working directly with high-growth companies of all sizes and across a wide variety of industries. Survive, Reset, Thrive (SRT) is a practical and innovative interconnected three-mode approach : Survive : Stabil...

My Favorite "Moral Of The Story" Tips From Harvey Mackay

I'm a big fan of best-selling author Harvey Mackay . He writes about business, sales and leadership and typically ends his articles with a moral of the story. Culled from his writings of the past few years, here are some of my favorites of his moral of the story endings: Change your thinking, change your life. It's not enough to know how to do things - you must know why you do them. If you live in the past, you won't have much of a future. If you want to outsmart the competition, you have to outthink the competition. Don't be afraid to make a decision. Be afraid not make a decision. What you learn on your first job will last through your last job. Minds are like parachutes - not much good unless they are open. If you can't be an expert, hire one. People have a way of becoming what you encourage them to be. It only takes a little spark to ignite a great fire. Doing the right thing is never the wrong thing to do. Mackay's best-...

Discover Your True North And Internal Compass

In his book, True North , Bill George shows you how to discover your true north - your internal compass that guides you successfully through life. "Only when you discover your true north can you unlock your full potential as a leader and human being," explains George. In the book, published a couple weeks ago, George shares with you how to: Cultivate self-awareness Define your values Find the "sweet spots": of your motivated capabilities Build your support team and lead an integrated life Make the journey from "I' to "We" as an empowering leader Become a global leader Bill George George shares profiles and stories from more than 100 leaders who in their own words explain how they discovered their true north. He also explains the characteristics differences needed to be a leader in the Twenty-First Century versus the Twentieth-Century. Today's leaders, he says need to be: Purpose-drive versus charismatic Globally focused versus U. S.-centri...

What's The Future Of Business By Brian Solis

Incredibly relevant. Highly visual. Timely. Enlightening. Instructive. Scary. These are all words I use to describe Brian Solis' new book, What's The Future (WTF) Of Business -- Changing The Way Businesses Create Experiences . You can likely already imagine that I consider this a must-read book for any business owner and any leader -- even leaders who manage businesses that don't directly connect with consumers. WTF is incredibly relevant and timely because Solis explores the non-stop transformation happening in business today, driven by new social and mobile technologies. The book is highly visual because it's the quality of a coffee-table style book, packed with compelling graphics, bright colors and a design that makes for easy reading -- all delivered on top-notch paper. And, it's enlightening and instructive , because the book delivers real-world examples that can guide you as you shape your business. Plus, WTF is scary . ...

How To Drive Your Team To Value Beyond The Ordinary

"It takes more than encouraging words to get a team thinking beyond the ordinary," explains Jackie Barretta , author of the book, Primal Teams . She suggests you must help team members to redefine the purpose of their work with broader and more expansive thinking. Use certain pointed questions to guide a team toward a loftier view of their purpose. Specifically, Barretta recommends you as the leader ask the following purpose-broadening questions to encourage the team to think of providing value beyond the ordinary : What major contributions can our team make to the company's success? What do we do that makes our colleagues and customers happy? What does our work do to give our company a competitive advantage? What do we do that no one else can do? What legacy do we want to leave? What future possibilities excite us? What difference does our work make in the lives of others?

The 12 Ways Marriott Practices Good Leadership And Customer Service

The next time you stay at a Marriott hotel look in the nightstand drawer for Marriott's booklet that highlights its milestones and tells the Marriott story. In the booklet, you'll find the following 12 ways that Marriott practices good leadership AND customer service : Continually challenge your team to do better. Take good care of your employees, and they'll take good care of your customers, and the customers will come back. Celebrate your people's success, not your own. Know what you're good at and mine those competencies for all you're worth. Do it and do it now. Err on the side of taking action. Communicate. Listen to your customers, associates and competitors. See and be seen. Get out of your office, walk around, make yourself visible and accessible. Success is in the details. It's more important to hire people with the right qualities than with specific experience. Customer needs may vary, but their bias for quality never does. Elimin...

Frustration In The Workplace Is A Silent Killer

" Frustration in the workplace is a silent killer," claim authors Mark Royal and Tom Agnew in their terrific book, The Enemy of Engagement . Further, "in an organizational context, frustration is not as simple as failing to get something you want. Rather, it involves the inability to succeed in your role due to organizational barriers or the inability to bring the bulk of your individual talents, skills, and abilities to your job." Royal and Agnew further explain that a staggering number of highly motivated, engaged, and loyal employees quit trying--or quit, period---because they feel frustrated . And what's causing all that frustration? It's lack of enablement . According to Royal and Agnew, as employees grow in experience in their roles, they begin to focus less on learning the ropes and more on achieving desired results. In the process, they are increasingly confronted with enablement constraints that limit their ability to get their ...

Eric Jacobson On Management And Leadership

Search This Blog