Monthly Archives: August 2010

How to approach selling your business

How to Approach Selling Your Business

So finally the time has come to sell the business.  After investing years of your time and uncounted thousands of dollars, it has become successful, providing for your needs and wants, and it’s time to enjoy the fruits of your labor.  Where do you start?

A good time to start thinking about selling a business is right after startup, when it shows signs of beginning to succeed and become self-sustaining.  Even if you are planning on bequeathing it to your progeny or a partner, it’s never too early to think about what will happen afterwards.

The first step is to take your time–selling a business is a complex process and you will only do it once.  Confidentiality is a necessity at this point, as word of an impending sale can cause repercussions among employees and business partners (suppliers, customers, etc.) alike.

Your position in the business is also a point to consider.  If you are the sole proprietor, the decision is yours alone.  However, if you are a partner or board member, selling your part of the business will involve more considerations.

Finding a good broker is worth any amount of time needed to locate one you are comfortable with.  Check the Better Business Bureau for any investigation history, and get referrals from fellow business owners or from industry associations like the International Business Brokers Association (IBBA).  This is a non-profit “trade association of business brokers providing education, conferences, professional designations and networking opportunities” (IBBA), as well as professional certifications and boasts over 1300 members.

Next, a professional appraiser should be consulted, as just like selling a home, a professional appraisal will give a fair value to begin negotiations with.  Keep in mind though, an appraisal is an estimate of the fair value of a business’ hard assets, and the market value of the business may be higher or lower, as a business is only worth what someone else is willing to pay.  

Determining major terms and price are issues that you are going to have to work out with your broker, but a few basic factors come into play: what do you want to get out of the sale?  Continuing salary?  Lump sum?  Stock options?  This is a step often overlooked until late in the negotiations, often to the detriment of the seller.

Financing the sale is usually about 90% left to the seller.  If you can’t or won’t be willing to cover the costs of the sale, it may not be a good time to sell.

Once you and your broker have located a buyer and agreed on a price, a Letter of Intent is drafted.  This letter outlines the terms and tentative price in a non-binding document and allows the buyer time to thoroughly investigate the business.  This process is subject to Due Diligence, as the onus of discovery is placed upon the buyer and buyer’s agent.     

After the discovery process is completed to both parties’ satisfaction, the Purchase Agreement is drafted.  This set of paperwork creates a formal agreement between buyer and seller regarding purchase price, terms, and other legal details.  Once the respective lawyers have finalized the details and complied with state law requirements regarding the sale, the Purchase Agreement is signed, closing documents finalized, and the sale is complete.  If everything has gone well, it’s time to breathe a sigh of relief and start planning what to do with all that free time!

Identifying and analyzing key performance indicators

Identifying and Analyzing Key Performance Indicators

Over the years businesses have developed and implemented many approaches to gathering and analyzing key performance indicators. Obviously, the most basic of these would be net sales and net profits but the problem with these two key performance indicators is that they are on the tail end of the process.

The Sooner the Better

Sure, they are helpful to an extent but ideally a business would like to be able to acquire and use key performance indicators that are much closer up front, so to speak. The quest for this data has kept managers busy trying to make sense of relevant data that they have gathered in the hopes of coming up with key performance indicators that will allow them new earlier insight into business operations.

New Solutions for Old Problems

The endless quest for more subtle and earlier available key performance indicators has in turn led to the development of new performance and recording software. Another offshoot of this growing need for business intelligence of this sort is online reporting software, which in turn has progressed even further to real time online reporting software.

Subtle Hidden Key Performance Indicators

What these on line services do is take complex data that a business generates and gathers on a day to day basis, process and refine it then returns it to its source as needed in a far more comprehensible format. The result, is that subtle new key performance indicators that would have otherwise gone unnoticed can be made available to be used as needed.

Real Time Key Performance Indicator Analysis

How to kick recession depression

How to Kick Recession Depression

Okay, okay I finally have to admit it—the economy is kind of crappy right now. And it’s scary (not that the media isn’t fanning those flames just a bit). People are afraid they might lose their jobs, entrepreneurs are afraid they might lose their businesses, people are afraid they might lose their homes. So what to do?

1.) Tattoo the serenity prayer in a prominent place on your body. Refer to it often. Remind yourself that there’s a lot you can’t control and let it go. But there are some things you can control. Those are the things to work with. Example—I can’t control if any particular prospect will buy from me. But I can try to do my best with every prospect. I can’t control prices, but I can control my spending. Why lay awake at night worrying about the stock market? We can’t do a damn thing about it. Take a deep breath, say “Serenity now” and let it go.

2.) Go back to basics. I think back to what worked for my business in the past—attending networking events (something I didn’t have time to do when I was busy), personal notes, this newsletter, the basics. What works best for keeping you job? The basics—showing up on time, having a great attitude, dressing nicely. What about your finances? The basics—spend less than you earn, save some money for a rainy day, etc. I think we got away from the basics when times were fat and happy.

3.) Review your risks. I paid off my mortgage this year rather than taking a cool vacation. I’m usually not so risk averse, but this move makes me feel very secure. And ironically I feel like I can take bigger risks! I let go of 35% of my clients right before the bottom fell out of the economy. The fees they paid me were significantly lower than my other client, but still—35%! It was scary, but it was the best decision I’ve made. I work less, earn more money, and do better quality work (because I’m not rushing and exhausted). Don’t let this time stop you from taking risks—just take the right ones.

4.) Review how lucky you are. I don’t care what your situation is right now, you have something to be grateful for. I’m grateful you are taking your precious, precious time to read this. I’m grateful for all the people who have had enough faith in me to work with me over the years, I’m grateful to all the people who have been in my audiences and didn’t boo (or throw things). This time should make you more grateful for the customers you do have, the employer who gives you a job, the employees who understand when you ask them to give a little bit more, and the fact that the Russians haven’t invaded any place (lately).

5.) Lower your expectations. I am not advocating giving up—far from it. But maybe you can’t pay for that Ivy League education after all. Maybe little Timmy will have to go to State. Maybe you won’t get the $5,000 bonus this year, because sales are off. It’s okay. All you can do is your best. You are hardest on yourself—ease up.

6.) Review what’s really important to you. I think this is a good idea no matter what the economy is doing. A lot of times we don’t realize what this is until we lose it. How important is your family? Your health? I do adore my work, but before I let some of my clients go, it was my entire life and I was exhausted. Now I have a fun blog, a new hobby, and time to sleep and work out. Maybe this is a good time to change how you think about success. Is it how much money you make or how happy you are?

7.) I’ve said it before and I will say it again (mostly because I need to hear it) stop comparing yourself to others. You really don’t know what you’re comparing yourself to anyway. I used to always feel bad about being single. But the more marriages I see, the better I feel!! At the end of the day, all that matters is how happy you are in YOUR life. Isn’t that what we all want—to be happy? And as Abraham Lincoln wisely said, “Most folks are about as happy as they make up their minds to be.” What to be unhappy? Compare yourself to other people.

8.) Remind yourself that you can come back from anything. If you’re an entrepreneur, you built your business from nothing. You did it before, if you have to, you can do it again. If you’re an employee, there was a time when you were unemployed. If you found your current job, you can find another. Don’t think of something as an ending, think of it as a new beginning. Think that’s all motivational BS? Fine, go ahead and think of it as the end. Is that empowering? Does that help? What to just hang around in the parking lot and hope the plant reopens? Read “Who Moved My Cheese?” and get with the program.

9.) Learn something new. This is just smart—it keeps you engaged, but it also makes you more marketable. I’m thinking work related here—things like new technology, communication skills, dealing with others, business writing—there are endless things we could all improve on. Pick something you like. Tell your boss. If you’re a leader, provide learning opportunities for your people. Don’t stop all the training because you’re scared! The world isn’t going to stop changing because times are tough! Your people need to be better in tough times—the competition is more intense!

10.) To steal from AA—take one day at a time. Just do your very best today. Part of our fear is that we can’t see the end—we don’t know how bad things might get or how long this will last. We fear the unknown, we imagine the worst. STOP! Work with what you have—this day. Make this day your masterpiece. That will be enough.

How to make money with website directories

How To Make Money With Website Directories

If you are interested in knowing how to make money with website directories then you are on the right track. Although website directories are a very unusual choice for making extra income through using the internet, it actually generates a favorable flow of cash. A website directory is basically a website that contains a list of other websites. This is done in an orderly fashion through listing these websites per category or segment. This in turn makes it easier for people to look for what they need quicker and easier than browsing aimlessly.

There are a few things that you should know regarding how to make money with website directories. First, you will be needing to set up your own website. After doing so, make sure that your website looks good even if you have to hire someone just to do so. Yes, you will have to spend some of your savings but it is totally worth it.

Next crucial step in knowing how to make money with website directories is to know your website’s focus. Will you cater to a broad market or will you zoom in to the specific needs of a particular segment? Next is to develop a fee structure where you will mostly earn your money. There should still be a free listing structure where you trade advertisement spaces so that popularity and traffic can be maximized. Finally, to be successful, you have to make sure that you add more listings to your website directory and that those listings get plenty of traffic through my website directory.

August 2010
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