Online Business Exit Strategy | 6 Tips for Selling Your Business for Maximum Value

Transcription:

Hey there, it’s Mike Swigunski here and I’m the founder of global career and best-selling author of Global Career: How to Work Anywhere and Travel Forever.

If you’re interested in potentially selling your business or even if you’re just looking to really streamline your business for a potential exit in the future you’re going to want to stick around because in this video i’m going to share with you how you can potentially get hundreds of thousands of dollars in extra money in a potential exit so i’m gonna share with you my top six tips and i’ve learned these tips over the past five years of working in the online business brokerage industry and helping buyers and sellers broker more than 120 million dollars worth of online businesses through one of the world’s biggest online business brokerages so now i currently have my own portfolio and i’m working with groups of buyers and sellers to help make sure that they get the most money out of their exit and also working with buyers to make sure that they find a deal that’s right for their skill sets so you’re going to want to stick around because i’m going to share with you my top six tips for preparing your business for a potential exit.

Even if you’re not going to exit your business these six tips are going to make your business so much more efficient it’s going to reduce a lot of your stress and just overall make your business a lot better and prepared to get way more money in an exit so stick around to the end and i’m going to share with you at the very end my favorite resource for any entrepreneur to read you’re going to want to grab a copy of this book after you watch this video so i’ll share some of the videos and some of the insights from that book as well so let’s go ahead and dig into my online business exit strategy that’s going to earn you hundreds of thousands of dollars in extra money for a potential exit starting off at number one is reducing your workload no buyer in their right mind is going to want to buy a business that you’re working 40 50 hours on they don’t want to buy a job they’re looking to buy a business that has a lot of these core tasks outsourced to other team members to virtual assistants or if you’re not able to do that automating a lot of those hours of your job so that way a new buyer can take over this business.

They’re not going to want to spend hundreds of thousands of dollars to buy a 40 or 50 hour a week job so that is one of the most important things is limiting your hours figuring out ways to either outsource or automate these crucial parts of your business so that way you’re just managing your business you’re not necessarily running the day-to-day stuff because a business is going to be really hard to sell to somebody if you’re working 40 50 hours a week a good time to really reduce it to is probably depending on the size going to be around under 5 to 10 hours a week anything more than that is going to be really difficult in an exit reducing the time is going to make your business so much more valuable and it’s going to make it sellable if you are working way too much on your business i always recommend figuring out what tasks you can automate then if you can’t automate it outsource if you can’t outsource then try hiring a team member to take over that task in that progression and this is going to really help in a few ways.

One it’s going to give you a much higher valuation two it’s going to open you to so many more buyers that are looking for a semi-passive business to acquire and then again it’s going to really just make the exit process a lot smoother moving in at number two if you’re looking to really increase that valuation of your business you’re going to need to do one thing and that is increase your profit and there’s a lot of quick ways that you can go about doing this one is just increasing your prices two is starting new marketing campaigns or initiatives so with paid traffic maybe you’re writing blog posts or some type of inbound marketing strategy that’s going to gain you a lot more customers and increase your profit for the business now every online business that’s going to be sold is going to be coming down to how much monthly net profit you’re making over an average period of six to 12 months so you really need to focus on making sure that you’re increasing your profit and there’s a lot of interesting techniques that you can do to make sure that your business is getting more profitable over time a lot of buyers are going to want to see a slight increase in profit month over month and year over year.

Suppose your business is not trending in the right direction. In that case, it’s going to be really hard to sell a declining asset so moving on to number three, if you’ve kind of pursued every avenue that you can think of, you’ve tried all the different marketing strategies you’ve exhausted paid advertisements and everything else that you can think of the other option is to reduce your expenses, and this is one of the things that a lot of sellers don’t actually think about they’re not combing through their books so making sure that you’re looking for these unnecessary business expenses and this can be things like maybe you’re paying for software that you’re not using anymore, or you can switch to a yearly plan versus a monthly plan any way that you can really reduce your expenses is going to increase that profit margin and give you a higher valuation on your business a few other options just have somebody comb through your books seeing what’s essential seeing what’s not.

There’s a lot of sellers out there that aren’t actually taking care of their p l their profit and loss statements. They’re not really digging through the finances. You need to do a monthly audit to see what you’re spending on your business, keeping track of that and getting rid of anything that’s essential, so what I would do and what I recommend is just looking at your expenses, taking a really close look at any of those larger expenses and seeing what other alternatives you could use to fulfill that expense one example could be let’s say you’re spending a thousand dollars a month on a certain software maybe there are some alternatives out there maybe you can actually ask for a discount or pay a yearly fee instead of monthly and really reduce those costs so there’s a lot of ways to get creative in reducing those expenses over time and you need to fine-tune.

Suppose you’ve already exhausted all the ways to increase profit. In that case, another option is to reduce your expenses. That kind of segues on to our next point tip number four is to look into ad backs, and this is something that a lot of sellers kind of get confused on this part is when you’re filling out your p l when you’re putting together your numbers there’s going to be certain expenses that a new buyer wouldn’t necessarily need to take on to necessarily run that business one good example of this is let’s say you’ve ordered a bunch of content in the early days to get your website or business ranking for specific search terms since you’ve already spent thousands of dollars on this maybe you ordered a hundred different articles for ten thousand dollars moving on forward the buyer only needs to add one article a month so instead of that initial expense that would be considered an ad back where a new buyer wouldn’t need to be spending you know ten thousand dollars to get that content.

They would only need to be spending a few hundred dollars every month to produce content and to continue maintaining that business so that’s something to consider is what are those expenses that are going to be considered as an ad back you’re going to want to highlight those because in an exit these add backs are going to become crucial for making sure your profit margins are as high as possible and that way you’re getting the highest valuation that you can moving on to tip number five is knowing your numbers there’s so many sellers out there who think they’re making you know ten thousand dollars a month in profit but after talking to their bookkeeper after going through all the expenses ordering more inventory for their business whatever it might be a lot of times the profit that they’re actually making isn’t exactly what is going on so i’ve worked with some people or i’ve seen in some cases where they thought they were making 15 000 a month in profit but after coming through the p l looking at all those software costs paid advertisement costs inventory costs.

They’re only working; they’re only earning around ten thousand dollars a month, and that five thousand dollars can make a big difference in your overall valuation price, so making sure you know the numbers inside and out because any new buyer is going to be combing through those numbers making sure that everything adds up making sure that the trajectory of your business is on the right path and again if you don’t have these numbers down it’s going to be really difficult to sell your business and having these figures down will help you figure out where your money’s going and will help you get a better understanding of how to improve the valuation of your business, and this can earn you hundreds of thousands of dollars or more in a potential exit. Number six is creating sops again with any sort of exit. There’s going to be some sort of training period where the seller needs to train the new buyer.

Normally this is a 30 day to 60 day period with email maybe some periodic phone calls to help train the person you’re going to want to have an sop which is a standard operating procedure for every crucial step of your business essentially this is a document that’s a step-by-step process it can include some screen shares some videos some text some images and screenshots and essentially what you want to do is every major step to run the business create an sop for that aspect and it should be written for a stranger off the street could sit down and read this document without knowing anything about online businesses and figure it out on their own it might take them a little while to figure it out but they should be able to do it almost autonomously and this is going to make your business so much more appealing to potential buyers because they’re going to have all this training data and it’s going to make your life so much easier during this transition period because you’re not going to have to answer all these questions that might come up during this transition you can reference them to hey this is an sop number two and you can just follow.

if they have further questions it’ll kind of really substitute your training experience and make things a lot easier for the selling experience and this will open you up to a wider range of buyers so those are my top six tips and if you’re interested in selling your business i’m gonna leave some links below in the description where you can actually set up a free seller consultation with me and i’ll go ahead and look through your business give you some practical advice to potentially exit in three to six months these calls have helped sellers gain more than two hundred thousand dollars on average in extra value for when they go to sell their business so they are very valuable and a simple 30-minute call could potentially gain you thousands of dollars or more when you exit your business so i’ll leave the details below in the description so you can apply to set up one of these calls now finally moving on to the last part if you made it this far you’re going to want to pick up this book because that means that you are a committed entrepreneur who’s looking to sell their business and run a business as best as possible

now the book is called built to sell creating a business that can thrive without you this book is written by john warlow and essentially it’s a business parable about how to create a startup that won’t trap you when you want to sell it now this book is absolutely essential for any entrepreneur who’s looking to build an online business and potentially sell it the core gist of the book is no matter what you’re planning to do you should build your business like you’re wanting to sell it in the future it’s going to make it a lot more efficient it’s going to make it a lot less stressful to run this business if you structure it in the right way and then if you do come time to want to sell this business you’re going to already achieve a lot of the essential steps to make sure that you get the maximum value in an exit so i’ll go ahead and leave details below about how you can get this book on amazon now this is a must buy for any entrepreneur that has a business out there i highly recommend reading it and trying to implement some of the things now if you made it this far please consider subscribing and hitting that bell notification icon to get notified about the two new pieces of content that i’m putting out every week now if you learned something new in this video make sure to give it a big thumbs up and i appreciate your support you’ll find all the links that i discussed below in the description and take care have a wonderful rest of your day.

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