Do you know why you must sell your business through an auction to maximize your company value?
My Rockstar entrepreneur, if you don’t, you should.
When it comes to selling your business, you have one chance, and you better make it count.
Why sell your business through an auction, you ask, when an auction is more complex and costly?
Let’s dispell this myth right now.
A quick story.
I started my EdTech right out of school with no money, experience, or team.
My new BFF was failure. All-day. Every day.
My grit and passion kept me in the game long enough to gain momentum and success.
The sophisticated buyer, a wolf in sheep’s clothing, sent a 7-figure unsolicited offer.
When it comes to selling my company, I didn’t know what I didn’t know, and the buyer was counting on my inexperience.
After saying “no,” to the buyer, I committed myself to master the art and science of selling a company.
What I learned over the next two years shocked me to the core.
As entrepreneurs, the system is set up against us from the start.
I accepted a 9-figure offer from a different buyer twenty-four months later.
What made the difference, you ask?
Follow my lead and sell your business through an auction. Do this today, and you’ll thank me tomorrow.
Not sure where to start and what to do?
Keep reading.
Desire makes everything blossom – Marcel Proust
Want the highest price for your company?
Sell your business through an auction to create buyer desire through scarcity.
When you sell your business through an auction, buyers know you have choices.
Let’s clear up two myths.
First, buyers insist that dealing only with them gets you the highest price.
Second, investment bankers insist an auction costs more money and requires extra time.
Why is each statement a myth?
Many buyers for one company creates a higher demand for that company. And a higher demand drives up price.
Investment bankers are right in saying an auction costs more money and takes more time. What’s conveniently left out is that auctions drive-up the price.
Given a choice, investment bankers prefer more deals at lower prices. The alternative is fewer deals that have more risk from higher prices.
Remember, investment bankers charge a percentage of the sales price. The commission from a value increased of $10M is a rounding error for investment bankers, but not for you.
Read “The Surprising Truth About Investment Bankers That Can Make You Rich.”
Know this and know this well.
When you sell your business through an auction, the auction itself creates scarcity. Many buyers are competing for one company, aka your company.
Human nature has people do more to avoid pain than to gain pleasure. For buyers, losing out on a deal is a big pain point.
Scarcity, through an auction, increases the desire of buyers to buy your company.
The result?
A bidding war that drives up the price.
Selling your business through an auction does one thing to buyers that drive them crazy.
Do you know what it is?
Keep reading.
One today is worth two tomorrows – Benjamin Franklin
When you sell your business through an auction, you save time and prevent buyer games.
When sellers deal with only one buyer, the buyer controls the schedule.
Buyers are smart and sophisticated and know that buying a company is a zero-sum game.
Either you win, or the buyer wins.
Read “Do You Know The 7 Mistakes Every Buyer Wants You To Make When Selling Your Business?”
Whatever extra time an auction requires to setup is more than made up for later in the process.
When you sell your business through an auction, the process keeps buyers on a tight leash.
When you select a buyer to negotiate with, you do so with confidence.
If your prospective buyer is taking too long or plays games, you can end the negotiation to move on to other buyers.
An auction places pressure on buyers to complete the negotiation as fast as possible.
The risk for buyers who attempt to stall negotiations during an auction process is risky.
Buyers risk losing on two fronts. First, losing to other buyers. Second, losing hundreds of thousands of dollars spent on due diligence.
When you sell your business through an auction, you save time while increasing value.
It’s a win-win. For you.
If it doesn’t matter who wins or loses, then why do they keep score? – Vince Lombardi
When you sell your business through an auction, your value increases from the competition.
Investment bankers tell sellers that company value has nothing to do with emotion. Instead, investment bankers insist that company value is a math calculation.
Don’t believe this “math calculation” line as it’s a myth. All-day. Every day.
Whether you sell your business through an auction or buy blue jeans, it starts with emotions.
The so-called math calculation comes later, so your logic can justify your emotions.
And this, my Rockstar entrepreneur, is the power of an auction.
Once you’ve painted the picture of the bright vision for your company, stand aside as emotions kick in.
Auction or not, buyers know what your company did yesterday, and instead, buy it for what it can do for them tomorrow.
Read and prosper from “Conquer And Win When You Know How To Increase The Value Of Your Business.”
Your company value gets a further boost when you sell your business through an auction.
Most people do not like to lose, especially buyers.
When you sell your business through an auction, buyers outbid each other to avoid the pain of losing.
The fear of losing to the competition and the pain of loss is a one-two punch for buyers that work to your benefit.
Buyers dislike auctions because they know they’ll likely pay more. Investment bankers dislike auctions because of the extra time and effort required.
Don’t let buyers or investment bankers tell you otherwise.
Sell your business through an auction to maximize value.
Confidence is the key that unlocks success – Jeffrey Feldberg
Most people despise two things: losing and making the wrong choice.
Auctions ramp up the fear of losing in buyers and eliminates the fear of making the wrong choice.
When you sell your business through an auction, you give buyers the confidence they need.
How do you give buyers confidence, you ask?
Many buyers in an auction give your future buyer social proof that your company is worth it.
People do more to avoid pain than to get pleasure. If buyers feel they will feel the shame and humiliation of a wrong choice, they’ll walk from the deal.
An auction gives buyers the confidence needed to buy your company.
Think of it this way.
Spreadsheets, reports, and even kudos from your investment bankers are “order qualifiers.”
The “order winner” is the confidence of knowing other buyers desire your company.
Successful sellers are successful because of what they both do and don’t do.
Success leaves clues.
Read and prosper from, “This Is How Successful Sellers Crush Their Exits.”
Both for yourself and your future buyer, it’s confidence that is the key that unlocks your success.
Lead the way for your buyer by sharing your bold vision for the future. A compelling story of a better tomorrow creates hope.
In turn, hope creates confidence for buyers.
Think back to when you started your company. Your first customer became a customer because of the hope you created of a better tomorrow.
Buyers are no different.
Create hope for buyers today, and you’ll thank me tomorrow.
Do you know what skyrockets value when you sell your business through an auction?
Keep reading to find out.
I create opportunities – Bruce Lee
Do you know what the Tulip “fever” mania of the 1600s and Bitcoin have in common?
Both tulips and Bitcoin had their market value explode from hype.
The more people that became interested, the higher the value.
When you sell your business through an auction, the more buyers you attract, the bigger the hype. The bigger the hype, the higher your company value.
To be clear, profits, a robust business model, and customers are a must-have.
Read and prosper from, “Why Your Business Models Sucks And What You Need To Do About It.”
How do you create hype when you sell your business through an auction?
Auctions are a powerhouse for increasing value because of the process itself.
It’s human nature to do more to avoid pain than to get pleasure. The auction process creates a high desire for buyers to avoid the pain of losing out to other buyers.
The mere fact that there are other buyers, in the first place, gives social proof that your company is the “real deal.”
The trifecta is complete when a continual stream of interested buyers creates hype. The more buyers interested in your company, the more hype amongst the buyers.
And the more hype amongst the buyers, the higher your company value.
Does an auction guarantee you’ll always receive a higher value?
No.
What an auction does do, better than any other tool, is to provide the opportunity to maximize value.
Given a choice, choose to sell your business through an auction. You title the playing field in your favor and have more to gain than lose.
You can take that to the bank.
Are you looking to sell your company for as much money as possible in the quickest period of time?
Sell your business through an auction.
You have once chance to get it right when selling your business, and you better make it count.
Who am I, and how do I know?
I was that kid who started his EdTech right out of school with no money, experience, or team.
The truth is I had no business being in business. It was my grit and passion that kept me in the game long enough to welcome success.
My EdTech’s success brought it with an unsolicited offer from a buyer who was a wolf in sheep’s clothing. Saying “no” to the 7-figure offer had me say “yes” to mastering the art and science of selling a business.
Two years later, I welcomed a 9-figure offer from a different buyer.
What I learned along the way shocked me to the core.
As entrepreneurs, the system is set up against us.
Think again if you believe the skills that built your business will help you sell your business.
Sell your business through an auction helps you conquer and win the day.
In this article, I’ve revealed five reasons why auctions work.
The great news is that you already have everything you need to be successful. Right now.
Where do you start, and what do you do?
Start with the first principle and stay with it until you’ve mastered it. Do this for all five principles.
You can do it. I know you can.
So what are you waiting for?
Here’s to you and your success!
Your Biggest Raving Fan,
Jeffrey Feldberg
