Selling your business myths are like a thief in the night that robs you of your success.Are you either thinking of selling your business or are about to take the plunge?Whatever you're doing, stop.What you don't know can and will hurt you.Are you willing to have your hard work, commitment, and sacrifice all vanish without a trace?Of course not.When it comes to selling your business, ignorance is not bliss.I should know. I was that kid who started an EdTech business right out of school with no money, experience, or team. Despite the odds, I failed my way forward to build a monster of a business.It wasn't long before I was on the radar of an experienced buyer. Before you could blink, I had a three times EBITDA offer that was 7-figures.Something didn't feel right, and I said 'no' to the offer.Less than two years later I accepted an offer from a different buyer that was 13 times EBITDA and 9-figures.What's the difference, you ask?Selling your business myths.Once I realized that I didn't know what I didn't know about selling a business, I made it my business to find out.And so should you.What are these selling your business myths and what can you do about it?There's only one way to find out. Keep reading.
Knowing and believing are two different things. - Josh Lanyon
When it comes to selling your business myths, the accountant myth is at the top of the list.Don't believe for a second that your accountant will tell you exactly when to sell and for how much. Selling your business myths applies to accountants as much as any other advisor.Why?For starters, your accountant is an expert in accounting. Your accountant is not an expert in your industry. And this is exactly how it should be.If you've done your homework and you have the right due diligence mindset, you should know better.Look to your accountant to create spectacular audited statements and reports. You'll need this information for your virtual data room.But don't look to your accountant to tell you exactly when you should sell and for how much.Case in point, have you ever tried to speak to your accountant in April?I rest my case.When it comes to selling your business myths, don't believe the accountant myth.Spend the time and effort in assembling your exit team.It's your exit team that will unlock your financial prosperity and success. Know this now, and you'll thank me later.
There's no "I" in team. - Proverb
When it comes to selling your business myths, know that there's no "I" in the word "team."Too many business owners fall into the trap of believing that selling a business is easy. Don't do it!Prospective buyers love selling your business myths.Why?Your prospective buyer is counting on you making mistakes when selling your business. Afterall, every mistake you make is money out of your pocket and into the prospective buyer's.Your prospective buyer is smart, shrewd, and sophisticated. You don't know what you don't know, but your prospective buyer does.If you are looking to retire rich and happy, you'll need to sell your business at the highest value possible.You'll want the highest possible value and ensure that you're set up to pay the least amount of tax.When preparing to sell your company your goal is to get the most amount of money and keep as much as possible.How long do you need?Without unnecessary pressure and rushing you'll need three years. Could you do it for less, say 18 months? Yes, but at the expense of value.And when it comes to market timing, all bets are off.If advisors tell you that they know the best time you should sell your business, you should run. Run as fast as you can the other way. Nobody knows the market timing.When it comes to selling your business myths, get it out of your mind that the process is easy and you can do it yourself.
Assumptions are the termites of relationships. - Henry Winkler
Selling your business myths have you believe that buyer financing isn't your problem.Right?Wrong.The ability for your buyer to finance, or not, is your problem.Why?If the buyer needs financing and can't get it, you don't have a deal.Say goodbye to the countless hours and money you've spent to get you to this point in your deal.I'll take it a step further. Part of your diligence on prospective buyers must be on the type of financing they need.A quick story.When I sold my EdTech, Embanet, the deal closed in late June of 2007. A few weeks later the mortgage crisis hit the financial markets.So what, you say, and why should you care?Weeks after my deal closed, interest rates went up. In speaking with the buyer, I asked what would have happened if the deal was still pending.I didn't like what I heard. The buyer would not have moved forward with the deal because of the higher costs to finance.When it comes to selling your business myths, financing problems are your problem.You can take that to the bank.
Never trust a species that grins all the time. It’s up to something. - Terry Pratchett
Selling your business myths have you believe that your investment banker puts you on top.Right?It's complicated.The short answer is no.Why?You're a one-time transaction for your investment banker. You may be the exception and go on to start and sell another business.And that's the point. You're the exception.On the flip side, your future buyer will do many deals with your investment banker.Know this and know this well. If your investment banker had to choose between you or your future buyer, you lose.I say this without judgment.Your investment banker is in business to be in business.So are you and so is the buyer.Does this mean you shouldn't use an investment banker?Don't even think about it.You will dominate and win when you know how to choose an investment banker.How do you protect yourself?Find and hire an advisor of advisors. This advisor reports directly to you. To avoid conflict, keep your advisor behind the scenes and not at the meeting.Your investment banker will protest, but don't kid yourself, you need to look out for you.When it comes to selling your business myths, this one is a big one. Erase it from your mind so you can go forth and prosper.
It is amazing what you can accomplish if you do not care who gets the credit. - Harry S Truman
Selling your business myths make you believe that you can focus on your company and sell it at the same time.Leave this myth for Hollywood because it's just that. A myth.Selling your business will take most of your time and effort, as it should. Count on your days filled with meetings, meetings, and more meetings.You'll be meeting with prospective buyers, your advisors, and your team.For many reasons, including this one, you need your company to run without you.You'll have a stronger company that is more resilient and profitable when it runs without you.Having a competent and capable team to run the day-to-day of your business allows you to be on your A-game.Don't fall victim to selling your business myths that have you believe you can do it all on your own.When it comes to selling your business, you better be on your A-game. Remember, you have one shot. Don't blow it.
The truth is in the details. - Stephen King
Selling your business myths have you believe that due diligence on the buyer is a waste of time and money.Besides, you say, the only diligence that should happen is from the buyer to you.Right?Wrong.If you think your dealing with the buyer is over once you sell your company, think again.The buyer will have your money tied up in escrow and have you bound by reps and warranties.A word to the wise. You better know the kind of buyer you're dealing with before you put pen to paper.A quick story.Once I knew the top three prospective buyers for my company I did my due diligence.One of the prospective buyers was notorious for giving a high valuation in the letter of intent. The same buyer would do a bait-and-switch with a much lower value for the final offer.Another buyer had a reputation of finding ways to get out of the earn-out.My investment banker communicated that a bait-and-switch tactic and earn-out weren't welcome.The result?All offers had the same value in the final offer as the letter of intent.Selling your business myths have you take the easy way out and not perform due diligence on the buyer.If you want to retire rich and happy, spend the money and take the time find out all you can about your buyer.Do this now, and you'll thank me later.
The truth is in the details. - Stephen King
Selling your business myths have you believe that the highest offer is the best offer.Often, it isn't.How can this be, you ask?Suppose you have two offers. One offer is higher with an earn-out. The second offer is lower and has no earn-out.Which offer would you take?If you picked the higher offer, you're not alone. But you'll regret it.Your future buyer is smart and sophisticated. Buyers have all kinds of tricks up their sleeves to protect their money, at your expense.[tweet_box design="default" url="http://jef.tips/j13sybm16" float="none"]Knowing the details helps you unlock the floodgates of success, happiness, and fulfillment.[/tweet_box]Buyers love putting an earn-out as a condition of the sale. The premise is that if your company hits certain metrics, you'll receive money that's put on hold for you.Buyers also love having as high an escrow as possible.Beware of high valuation numbers that are back-loaded with impossible conditions.Buyers hope a high valuation number, attached with conditions, will have you mesmerized.Dance the dance.But know this and know this well.When it comes to selling your business myths, know the highest offer isn't always the best one.
On paper, selling your business myths sound great.In reality, selling your business myths can rob you of your success and happiness.In this article, I've revealed seven selling your business myths that you must avoid at all costs.Avoid at all costs, that is, if you want to retire rich and happy.When it comes to selling your business, you have one chance to get it right. And you better get it right.You've worked too long, have sacrificed so much, and have given everything you have to get where you are.I should know. I was that kid who started an EdTech business right out of school with no money, experience, or team. Despite the odds, I failed my way forward to build a monster of a business over a thirteen year period.The first offer to buy my business was 7-figures and three times EBITDA.The actual offer I accepted, two years later, was 9-figures and thirteen times EBITDA.I didn't know what I didn't know for the first offer and believed the selling your business myths in this article.I knew I could do better and made it my business to know the business of what it takes to sell a company.If I can do it, so can you.Knowledge is power, and know you know.Study each one of the selling your business myths until you've mastered it. Move on to the next one.Before you know it, you'll know what to do, and most importantly, what not to do.So what are you waiting for?You can do it. I know you can.Here's to you and your success.Thanks.Your BIGGEST Raving Fan,Jeffrey Feldberg