Took the words right out of my book

Julie Northcutt’s story bears repeating, if only because it sounds really familiar. Actually, it’s a terrific story.

Northcutt had a $2.5 million home health-care business, Chicagoland Caregivers, when she sold it in 2007 to a national company in the industry. But she wasn’t ready to sit back and sip margaritas on the beach.

For Northcutt, selling Chicagoland Caregivers presented her with new business opportunities, as she told Don Sadler at D&B Small Business Solutions:

“I’d had the idea for my other business, CareGiverList.com, for a few years and knew there was a huge need for this,” she says. “And I knew I needed to either expand my first business or sell it in order to continue competing effectively, since lots of new companies were coming into the industry.”

Northcutt’s primary advice for owners thinking about selling: “You’d better figure out what you want to do next. It might sound good to be able to sit on the beach all day, but people who are entrepreneurs usually can’t do that.”

Don’t be surprised if the following passages look familiar:

Eric R. Voth, a serial entrepreneur who has sold five independent companies and the author of How to Sell Your Privately Owned Company, says owners can use today’s challenging economic times to their advantage by putting greater emphasis on operating leaner and meaner. “Trim expenses and increase sales with an eye toward better profitability. This will allow you to achieve maximum value, which translates into a higher asking price when you put your company into play.”

Most experts and owners who have sold businesses agree that it’s really never too early to begin planning for the eventual sale of your business. “Every small businessperson should continually consider how to position his or her business for sale,” says Vicki Donlan, a consultant and business broker. “Too often, small business owners get excited about new ways to grow and invest in new directions that don’t lend themselves to the potential for a sale.”

“Place your business in a position to sell well before you actually need to sell,” adds Chuck Morton, co-chair of the Business Transactions Practice Group of Venable LLP, a law firm. “This effort should include having your corporate records in order and knowing what the drivers of value are for your business in the marketplace.”

Beyond the financials, (Tony Calvacca, a principal of New York Business Brokerage) says factors like the outward appearance of your operations and the morale and enthusiasm of your employees also go a long way toward making your company more marketable. “Poor appearance and inattentive workers are negative factors frequently overlooked by sellers that often jeopardize deals.”

I have an entire chapter devoted to that topic. See for yourself. How to Sell Your Privately Owned Company.

Here’s another topic I touch on in my book that bears repeating here:

All the experts agree that it’s important to have a professional business valuation performed by an independent third party before you set a price for your company. “Owners almost always have an inflated value of their business because of the time, energy, and heart they put into it,” says (Matt Slappey, a business transfer specialist with Murphy Business & Financial Corp.). “A valuation will consider similar business transactions and the return on investment your company may provide.”

Eric R. Voth is a serial entrepreneur, a private investor, consultant, and writer. He is author of How to Sell Your Privately Owned Company, a Basic Guide for Independent Business Owners, Baby Boomer’s Edition. Eric and his colleagues help a business Seller prepare and groom his or her company prior to offering it for sale or merger – then guide the owner through the actual process. He became involved in this field as a result of merging his own company in 1993.

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