Businesses are historically not good at mastering their own exit strategy or navigating the sale process. They simply are not prepared mentally themselves or physically with the business requirements. Many stay trapped and have to walk away, close the doors of their business. It doesnt have to be this way!
Internationally there are a massive amount of business owners that will be looking to retire over the coming years.
In Canada, within the next 15 years, over half the small business owners will retire. In the US 12 million Baby boomers who own businesses will look to retire. In Australia, over 35% of small business owners are over 50. Collectively they control trillions of dollars.
If you are looking to Exit your Business then avoid these Failures:
Mistake 1# Failure to maintain confidentiality
Mistake 2# Failure to continue to run your business
Mistake 3# Failure to use proper negotiating techniques
Mistake 4# Failure to secure qualified buyers
Mistake 5# Failure to progress the deal
Mistake 6# Failure to place the proper value on your business
Mistake 7# Failure to properly structure the deal
Mistake 8# Failure to prepare due diligence
Mistake 9# Failure to market the sale
Mistake 10# Failure to get the right advisory team
Mistake 11# Failure to properly package your business
Mistake 12# Failure to control the Deal
Take notice of these mistakes and you will be well on the way to navigating through your Business Exit hurdles. Have these mistakes handled and make your Sale stick, attract the right buyers,and enjoy the next phase of life
Want more? Go to https://lnkd.in/gUffKBk
It is estimated that only 20% of businesses listed for sale will sell. Of those that are sold many of the new owners will fail to transfer successfully into new ownership. As a seller getting the ‘transferability’ of your business sorted can reward you handsomely for de-risking the purchaser.
The sale value of your business is ultimately bound to how transferable the elements of your business are to someone else. Being transferrable increases your business attractiveness as well as the sale value by providing a higher business value multiple against your EBITDA (Earnings Before Interest Depreciation & Amortization) benchmark.
Here are 7 transfer considerations and 7 Mistakes commonly made
7 transfer considerations:
- Is the Business too dependent on you
- Can the People transfer (human capital)
- Can the Customer relationships transfer (customer capital)
- Can the Process and Technology transfer easily
- Can someone else learn the process
- Can Business continuity and growth transfer
- Will the Social Capital transfer – brand, culture, trust, and values
7 Transferability killers are:
- Poor or unsubstantiated financials
- No clear Market Dominating Position
- Owner & keyman dependence
- Poor documentation
- Lack of transferable systems and process (not repeatable) – No rhythm
- Risk – Product Liability, Lawsuits & contingent issues
- Customer risk – excessive customer reliance (1 customer responsible for 80% of revenue)
The best remedy is always to start with an end game in mind. Build value throughout the business cycle. Building from scratch with a focus on value, rhythm, and process will help. Behaving in the interest of the shareholders versus just the owner is a must. By following the vision, using discipline, and process the transferability of your business will be enhanced as with the saleability of your business
To learn how to create a great business and enhance transferability go to www.AdvancedBC.com.au/myguidedtour
Sales are referred to as a numbers game.
Business is really about maths and knowing your numbers. Sales also reflect this and also the culture and leadership of a company.
Focusing on the right things can make a big difference in increasing your conversion rates, the number of transactions, the Average Sale Value, and margins. 92% of customer interactions happen over the phone.
Empowering the sales team
Sales teams need good training, good presentation skills, and the right offers to present to prospective customers. Did you know 99% of businesses are not clear on their market-dominating position? This unique difference is part of the culture and ethos the sales team will reflect on your clients. Do you know the Break-Even of your Sales Offers? Or the dramatic impact of any discounting on your gross profit?
Here are some specific things to do:
- Get skilled – Learn to sell and present. Get educated now and ongoing (increases sales by 50%)
- Have a specific ‘magic number’ of calls and follow-ups to be made in a month, broken down to weekly and daily amounts
- Track your activity – if it can be measured it can be managed. Accurate information in your CRM for follow up actions, campaigns, and deal progression
- Do you have multiple sales offers – a premium offer, Up-sell, Cross-sell, Down-sell, and bundles. Don’t get cornered with an objection and one offer.
- Be consistent – cold calls take on average 8 attempts
- Are the calls prioritized for the job – cold calls and prospecting Thursdays then Wednesdays, the best times are between 4 pm and 5 pm)
- Time management – break the call sessions into 45 minute blocks then check emails, etc
- Do some research before your call – out of respect and to gain insight for better conversations
- Listen to the client – You will stand out
- Follow Up – 80% of sales require 5 follow-up calls. 44% of sales reps give up after one follow-up.
- Challenge the client (higher conversion rates) on their thought or belief process. Challenging sells, farming doesn’t
- Tell more stories – Only 5% retain facts, stories are king
- Respond quickly to requests, leads, and inquiries – 30-50% of sales go to the vendor that responds first
- Never discount. It is a lazy culture, drastically impacts your gross profit. Instead, have alternate offers and bundles.
- Take the customer on a journey always with the next step. If you cant help then give them an alternative.
- Closing the deal – only 2 % of buyers purchase immediately the rest will need education and nurturing till they are ready.
- Pause when asking key questions or for the sale – silence elicits a response
- Drip Campaigns – all client contacts into a systematic routine to stay in touch and ‘top of mind’ with the customer
By implementing these sales tips you are on the way to being a world-class salesperson and becoming a valuable contributor to a company’s revenue capability. Your worth has also just increased
There are 5 big mistakes you can do that will kill a deal with a big fish. They are:
- Not meeting the client’s expectations
- Mishandling a client crisis
- Taking on more than you can handle
- Putting all your eggs in one basket
- Up cash creek without a paddle
Any one or a combination of these can not only kill the partnership, but have the ability to take down your company as well. We’re going to take a bit of time to talk about each one of these, in this lesson we’ll cover the first two.
Not Meeting Client’s Expectations
It’s essential you give your client’s exactly what you promised during the negotiation portion of your relationship. If an event does happen where there is no way to meet the client’s expectations, not only do you have to find a way to fix the situation, but you also have to find out where it all went wrong.
A couple of things could have contributed to this problem:
- Bad salesmanship. This could mean the salesperson was trying too hard to seal the deal and didn’t listen to the client’s needs.
- Lack of communication. This breakdown occurs between the salesperson and your operations department.
In order to avoid these mistakes, you need to put a clear plan of action into place that all of your sales staff needs to follow:
- Think before you speak.
- Give yourself a break.
- Perfect your process.
- Pre-format over-deliverables.
- Stay hands-on throughout the entire process.
- Define success.
Mishandling a Client Crisis
Crisis’ will happen, but how you respond and fix them will define your company and interaction with your clients’. You need to respond quickly and effectively. This will help you gain even more trust and confidence from your client.
Some simple tips can help you deal with any client crisis:
- Take responsibility and apologize no matter who is at fault.
- Act swiftly and effectively.
- Step in and take control of the situation.
- Never point fingers or place blame.
- Stay in constant communication with your client.
- Stay calm throughout the situation.
- Keep your eye on the ball.
Now, that you know the top two mistakes you can make to kill a big fish deal, you’ll know better how to avoid making these mistakes in the first place and know how to put a plan of action into place in case of a crisis.
If you need help with any of this, try our GUIDED TOUR to get all the help you could ever need.
Next time we’ll talk about the 3rd and 4th killer mistake you can make in working with big fish clients.
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Today you’re going to learn how to find a target market of potential customers so you aren’t wasting precious resources on blitz marketing. So, the two questions you have to ask yourself are:
- What do people really want to buy from me?
- What related products are they already buying?
Once you figure this out you will know who is more predisposed to purchase your products/services. Then, you find other businesses with the same customer base who you can customer share with. Come up with an incentive and great arrangement to encourage both of your customer bases to shop at both of your stores.
The basic concept is this:
You want to find existing businesses who have the customer profile that you are looking for to market your products/services to.
Then strike up a relationship with those business owners to work out an incentive for customers to purchase from both businesses.
As a result, you have an audience to market to and they generate an added value from their current base.
So, how do you figure this out? There is a great formula from Jay Abraham you can follow with great success.
LV = (P x F) x N – MC
Here’s what it all means:
- LV is the life time value of a customer
- P is the average profit margin from each sale
- F is the number of times a customer buys each year
- N is the number of years customers stay with you
- MC is the marketing cost per customer (total costs/number of customers)
Once you know how much you need to spend to attract a new customer, you will know how much of an incentive you can offer to a business to help attract new customers.
So, here’s your step-by-step process:
- Find companies who already have the customer base you are looking for.
- Negotiate an incentive for them to share that customer base with you.
- Focus your marketing resources to this group of predisposed customers.
If you need help working through this process, check out our FREE test drive for the most comprehensive system of marketing tools and resources.