• Meet the author

    vothmug

    Eric R. Voth

    Like you, I have experience as an independent business owner.

    During the course of my career, I’ve been personally undertaken …

    • The startup of 10 independent businesses.

    • The purchase of five independent businesses.

    • The sale of five independent companies (two of which were actually mergers).

    • The startup of four franchise operations.

    • The loss of my investment in four independent businesses that were unsuccessful.

    These experiences allow me the unique perspective of being able to empathize with you as you contemplate the sale of your company. I’m familiar with the mix of feelings and emotions that sometimes accompany such thoughts. I’ve had them myself.

    This introduction is designed to acquaint you with my background as an “in-the-trenches” business owner. Perhaps you can identify with some of my experiences.

  • On Twitter

    Error: Twitter did not respond. Please wait a few minutes and refresh this page.

  • Calendar

    August 2018
    M T W T F S S
    « May    
     12345
    6789101112
    13141516171819
    20212223242526
    2728293031  
  • Blog Stats

    • 3,167 visits
  • Pages

  • August 2018
    M T W T F S S
    « May    
     12345
    6789101112
    13141516171819
    20212223242526
    2728293031  
  • Archives

  • Meta

  • On Twitter

      follow me on Twitter
    • Advertisements

    Exit planning is crucial to selling

    An Ohio group is presenting a series of Webinars focused on developing succession plans for small businesses. Paula Schleis of the Akron Beacon Journal reported recently about the January and February  Webinars sponsored by the Ohio Department of Development.

    “We feel the lack of proper succession planning is one of the most preventable sources of job loss in our communities,” Chris Cooper told the Beacon Journal. Cooper is program coordinator fo the Ohio Employee Ownership Center in Kent. Among programs planned are on Jan. 7, Where the Business Plan, Strategic Plan, and Succession Plan Meet, presented by Jim Aussem of Cavitch, Familio & Durkin.

    For details on how to sign up, visit the OEOC and select the appropriate link. (Note: The miniURL listed in the Beacon Journal was a bit balky – the link here works.)

    If for some reason you can’t connect to the Webinar or simply need a reference, my book, How to Sell Your Privately Owned Company, has all the information you’ll need to establish an exit plan and a whole lot more.

    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.

    Advertisements

    The credit trap

    Small-business owners are as acutely aware as anyone of how tight credit has become. And with the bankruptcy this week of major small-business lender CIT Group (not to be confused with last year’s bailout of Citigroup), the credit crunch isn’t likely to get better any time soon.

    Another report cites the use of business credit card accounts as the source of choice for quick credit. These are relatively easy to get (often based on an owner’s personal credit rating), but they usually have much higher interest rates and their convenience (just swipe and sign) also provides a serious threat as a debt trap.

    But if you’re thinking of selling your privately owned business, you can actually turn this credit crunch to your advantage if you’re willing to be flexible in helping the buyer finance the transaction.

    My book, How to Sell Your Privately Owned Business, devotes a section to finding creative ways to help a prospective buyer complete the purchase.

    A short excerpt:

    “Typically, you as the seller decide on the minimum price you want for the business. Consider taking anything over that amount in owner financing. This minimizes the risk for you. The most you can lose is the amount received that is higher than your lowest acceptable price.

    “This type of sale – called an ‘installment sale’ – can be very good for both the buyer and the seller. However, be aware of the risk implications. A buyer will see buying your company as his risk and believe that it’s only fair that you see some risk too. In the buyer’s mind, if you will not take some of the risk, then perhaps your company’s future isn’t at all what you said it would be.”

    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.

    http://money.cnn.com/2009/10/26/smallbusiness/small_business_credit_cards_loans/index.htm?postversion=2009102705

    http://money.cnn.com/2009/11/03/smallbusiness/cit_bankruptcy_ripple_effects/index.htm?postversion=2009110316

    Hot off the press

    HTS2.1

    Copies of How to Sell Your Privately Owned Company are available now!

    The book is available in several formats, including traditional print and PDF formats (Read-only PDF or printer-enabled PDF formats both available).

    We’re also offering free of charge sample sections of the book in downloadable form here.

    Buying How to Sell Your Privately Owned Company also entitles you to two FREE bonus reports:  The Agenda for a Successful Sale or Merger … and What to Expect when Working with a Merger & Acquisition Professional.

    order4

    Twitter Envy

    You’ve seen it before. For years you’ve nurtured your private company, watched it struggle and, if you’re talented enough and hardworking enough (and a little lucky), succeed. Then you see these overnight upstarts that seem to just take over the world. Think about Google. Or, more recently, Facebook or Twitter.

    Robert Scoble’s blog speculates that Twitter “actually worth five to 10 billion dollars.”

    No doubt you know of examples from within your industry.

    It’s enough to give a small-business owner Twitter Envy.

    But for every dot-com boom there are hundreds of busts – remember the spectacular dot-com collapse of 10 years ago?  Of course the lingering effects of this Great Recession are still fresh in our minds.

    This speculation of mind-numbing “market value” numbers brings a point for you, the small-business owner. By all means, you want to put a dollar value on your business, but there’s a right way to do that and you want to be careful not to get too caught up in speculation. After all, nobody knows if Twitter is actually making any money at this point (it almost certainly is not – yet).

    I’m inclined to agree with this comment on The Industry Standard by Fred Wilson: “On one hand, I think the transparency into the world of private investments is good. Entrepreneurs benefit from having their companies discussed and valued in ‘the market.’

    “But I think all the focus on what a company is worth can be bad. These companies are private for a reason. Most of them aren’t mature enough to be public companies. They often don’t have full management teams and some don’t even have revenues. The focus inside these companies needs to be on building the company, the product, and the business. And endless discussions about what their company is worth can be terribly distracting.

    “I saw this in action back in the late ’90s when a bunch of our portfolio companies went public before they were ready. The employees spent too much time focused on the stock price and too little time focused on the business. Many employees starting counting their net worth in stock that was not liquid and eventually was worth pennies on the dollar of what they thought it was worth.”

    Chances are your company will never go public. So dreams of exploding like Twitter or any Wall Street IPO will remain just dreams. But as you contemplate plans for the future such as selling your company, you need to have an idea of what your company is actually worth. Which brings us to my book, How to Sell Your Privately Owned Company, Baby Boomer’s Edition.

    Chapter 3 – Putting a Price Tag on Your Business – offers a comprehensive guide to setting the right price for your business, a price that will be fair to you and attractive to potential buyers.

    Eric R. Voth has been a successful business owner and seller since the 1970s. Among other enterprises, he is currently owner of ERV Productions Inc., and author of How to Sell Your Privately Owned Company.

    What’s your worry?

    Chances are there are plenty of worries for you.

    Finding the right buyer for your company is a huge challenge. Making your company attractive to potential buyers is important especially go generate some interest. But the key is weeding out those prospects who either aren’t serious or lack the means or know-how to be a credible buyer. In my book, How to Sell Your Privately Owned Company, A Basic Guide for Independent Business Owners, Baby Boomer’s Edition, you’ll learn the value of a professional intermediary and how to tell a real buyer from the fakes. Here’s an excerpt:

    A competent intermediary will be responsible for bringing the best buyer to your door. Part of this person’s duty is to eliminate “window shoppers” and “tire kickers,” and to carefully screen the more serious contenders and bring them – to meet you halfway – to the negotiation table.

    But there is still a risk and a worry. There are a lot of people out there – especially among the ranks of first-time buyers – who are basically unrealistic. They have unfounded expectations of what they can afford and where they can get the financing. Even the most credentialed, well-positioned buyers are likely to raise a few questions and a few points on your blood pressure.

    As a seller, you may have concerns common to other sellers. You may worry that …

    • You might not be getting a fair price;

    • You might not be paid on time;

    • You might not be paid at all;

    • The IRS will take all your profits from the sale;

    • The new owner will run your business right into the ground.

    With these ideas in mind, you have every right to ask the buyer this question: “Do you have the money to make this deal happen?” Then watch the reaction. Carefully listen to what he says about these things:

    • Willingness to use his own home as collateral;

    • The speed and ease of getting a small business loan;

    • Uncertainty or vagueness about where to get financing, or from whom;

    • Past credit history and experience with banks;

    • Overconfidence about “Money is not a problem.”

    What are YOU most worried about?  Take out a piece of paper and write it down.

    Copyright © MMIX by ERV Productions Inc. All rights reserved. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a data base or retrieval system, without prior written permission of the publisher.

    Eric R. Voth has been a successful business owner and seller since the 1970s. Among other enterprises, he is currently owner of ERV Productions Inc., and author of How to Sell Your Privately Owned Company.

    Be flexible on terms

    How many deals have you seen fall through because one party or the other remained inflexible on the terms of the transaction? I’ll bet you’ve seen a few. Keep those lessons in mind when you negotiate terms of the sale of your business to a potential buyer. How to Sell Your Privately Owned Company has a few tips toward that end:

    Rest assured

    The best remedy for assuring a successful deal is to minimize the risks. This can be done by working through a careful and documented sales plan that allows you – as the seller – to establish the price while being flexible with the terms. If you realize that the terms are really what drives (and closes) the sale, you will be further ahead on achieving your long-term goals, regardless if they relate to financial success or just a peaceful night’s rest.
    The flexibility of the sales terms usually means your willingness to accept multiple forms of payment from the buyer.

    That’s why most deals happen somewhere in between the fantasies of the buyer and the dreams of the seller. And in many cases, this happy medium is struck through at least partial owner financing. In plain talk – you play the role of “banker.”

    Copyright © MMIX by ERV Productions Inc. All rights reserved. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a data base or retrieval system, without prior written permission of the publisher.

    Eric R. Voth has been a successful business owner and seller since the 1970s. Among other enterprises, he is currently owner of ERV Productions Inc., and author of How to Sell Your Privately Owned Company.

    Does your company have curb appeal?

    Remember the first rule of real estate? Location, location, location. Add “curb appeal” to the top of the list. That applies to home and office. So when you’re thinking about selling your company, you need to think about how the place looks when it’s time to show it. My book, How to Sell Your Privately Owned Company, offers tips to help freshen up your business’s curb appeal. Here’s an excerpt:

    Think about your house: the place you may have left several hours, unmade beds, and unfinished projects ago. Would it look appealing, smell appealing, feel appealing to a prospective buyer? Would it be the kind of place that someone would want to raise a family in, bring friends to, feel comfortable in?
    Could it sell itself? Or would you need to do a little explaining, a little blushing about the peeling paint, the leaking faucets, the unkept lawn, the cracked window, the noisy neighbors? Would you have to make excuses for things? Justify your asking price? Take less than you intended or needed?
    Would it “show” better if you had a little time to get it ready? Sure.

    Time to fix things up

    Jeffrey D. Jones, president of Advanced Business Brokers in Houston, says, “It generally takes, on average, between five to eight months to sell most businesses. Keep in mind that an average is just that. Some businesses will take longer to sell, while others will sell in a shorter period of time.”

    Many businesses may take up to one year to sell

    However, the reality is that many business owners really don’t do anything to prepare for the sale until a few weeks or even days before putting it “in play” on the market. They mistakenly think that the business can sell itself, much in the same way that a home is bought merely after a drive-by.
    What would a buyer see in a drive-by of your business?

    What would his first impressions be of your:
    • Parking lot. Is it in poor repair? Are the shrubs overgrown? Do you have enough space for employees, handicapped persons and visitors? Is there trash on the lot’s surface?
    • Entrance way. Has it been swept, shoveled? Does it give a neat appearance of your business? Is it easy to find from the parking lot?
    • Reception area. Is there one? Is it neat and clean? Are visitors greeted quickly and with courtesy? Who else is in the waiting area?
    • Employees. What are they doing? Are they busy, talking, waiting around, drinking coffee? Do they acknowledge the visitor? Are they smiling? Are they neat, clean, well-presented? Are their desks and filing areas neat or cluttered?
    • Cosmetic appearance. How is the lighting? Do the walls need paint? Is the carpet worn? Does everything look “dated?”

    You’ll find a checklist in the book to review the points you’ll need to review, as well as many other secrets to selling your company effectively.

    Copyright © MMIX by ERV Productions Inc. All rights reserved. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a data base or retrieval system, without prior written permission of the publisher.

    Eric R. Voth has been a successful business owner and seller since the 1970s. Among other enterprises, he is currently owner of ERV Productions Inc., and author of How to Sell Your Privately Owned Company.