Always treat the future as now!

__Don’t procrastinate when facts are obvious. To be honest with you, the first time I sold a business, it felt like my heart had been ripped out of my body! Selling a business for the first time is never easy and can leave you emotionally devastated. However, the important lesson of this series is this: The capacity to sell a business is a "rite of passage" to maturity as an entrepreneur! If you’re unwilling to consider selling, let alone actually sell when you have to, then you’re not cut out for the big leagues… Now let's talk: It took me about five years to build my first business. I started building it before I was married and had children. It was everything to me. It was not unusual for me to spend 48 hours at the business non-stop. I was young and bursting with energy, drive, ambition, passion... and I poured it all into my little business. It grew quickly, and soon people heard about me. I had what they call in Africa "a name," and it was because of my business. Over the last 20 years, there’s been a lot said and written about my high-profile dispute with the government of Zimbabwe in those years, as I tried to convince them to let me set up the first mobile phone business. Today is not the time for me to go over that ground again. However, my decision to take the matter to court resulted in the government refusing to do any business with me whatsoever. And my business at the time relied on a lot of government contracts… Whilst I thought that the government's decision was unfair, it was what it was. I had either to wait until the business collapsed, or sell it. I had no option, so I moved quickly to find a buyer. __I wasted no time, and I did not procrastinate about it. Don't ever procrastinate when the facts are obvious! I sat with my accountant and my lawyer, and advised them of my decision. We drew up a list of potential buyers. The buyers knew the challenges I was facing. I also made sure I disclosed everything, so that I did not mislead them. A few weeks after starting the process, it had been sold and I was out. I said goodbye to my staff and went on my way. It was tough, very tough, particularly as I had sold as a "distressed seller," which meant I had little room in the negotiations. I did my best to get the best deal. From that day forward, I was never the same again. I had acquired a tough inner core: I had become a better entrepreneur! __Today, I have sold many businesses, for any number of reasons. And I shall talk about some of them in this series. I did the right thing, each time. Selling a business is not always because of a crisis; it’s just part of good business. It’s like selling soccer players to other teams is part of the business side of owning a soccer team. A soccer team that won't sell any of its players is not a serious team. An entrepreneur who will not sell a business or assets to deal with a problem they face, is also not serious. I know investors who won’t put a cent into your business unless you assure them that you’re willing to sell, if that’s the best option for the business! In this discussion, I’ll examine a number of issues relating to when to sell, and how to sell. __Know your strengths, and where you want to go. "So why do you want to sell this business?" I asked, after reading the financial statements. "This is a sound business; it’s profitable and growing nicely. Are you distressed by something?" "No, I'm happy and I don't need the money. I just don't feel I can take the business to the next level," he replied confidently. "Explain?" "We need a lot of money to scale, and meet the growing demands of the business. My partners and I just don't have the capacity to do that. We want to sell." This was not a distressed business and this was not a distressed seller. He was smart, very smart. This type of seller is very tough to negotiate with and usually gets out at a premium. They’re usually very well advised by smart bankers and lawyers, too! I’ve been in this position myself and when I did it well, I made a "ton of money”! It's like when Tottenham sold Gareth Bale to Real Madrid. This happens in business when you have a hot little business that the big boys need. Besides the howls of protests in public, they were rubbing their hands in the board room with total glee! I know if you’re a fan of Tottenham, you might not have liked it, but £86m for a young player… go for it! In business we’re always doing the same. I remember one time with a business we were developing, I needed hundreds of millions of dollars to take it to the next level. This meant investors would make us minority owners. I opted to sell and take my money elsewhere, even though I knew it would be big one day. No regrets… Remember the guy who sells "day-old chicks”? This was me on that one! Now if you’ve finally decided to sell YOUR business (whether a one-person shop or a global giant) let’s talk about a few key things you should be thinking about: __“Is the time ripe to sell?” If it’s not a “distressed” sale, this can be difficult to answer: Sell now? Or later? Especially if a potential buyer isn’t yet knocking at your door, external market factors like interest rates, input prices, new competitors or innovations, income tax issues, regulatory changes, economic forecasts, etc. all could impact your decision. As always, do your homework and consult experts when necessary. Like I wrote a few weeks ago, don’t procrastinate when facts are obvious, but also don’t allow yourself to be pressurized into making a hasty decision… especially not before asking and answering the all-important question: __“What is my business really worth?” Appraising the market value of businesses is also a business, and can be complicated. To help you price your company correctly (depending on its size) try to hire the best professional valuation expert you can afford. You might “believe” your business is worth X, partially based on emotion, but you could be very wrong – either on the high side or the low side. __Pay attention because you may have never been this way before… # Be ready to answer lots of questions (with facts and data) and always remember -- honesty is the best policy. No one expects to be buying a perfect business! # Make sure your financial records (and all your legal documents) are in order. Most buyers want to see (and verify) revenues and profits. If you can, have available at least three years of financial information. Audited statements are best. Whatever you do, don’t get excitable and sell yourself (or your business) short… Your professionalism and confidence can make all the difference between a win-win business deal and daylight robbery. __Know your strengths, and where you want to go. "So why do you want to sell this business?" I asked, after reading the financial statements. "This is a sound business; it’s profitable and growing nicely. Are you distressed by something?" "No, I'm happy and I don't need the money. I just don't feel I can take the business to the next level," he replied confidently. "Explain?" "We need a lot of money to scale, and meet the growing demands of the business. My partners and I just don't have the capacity to do that. We want to sell." This was not a distressed business and this was not a distressed seller. He was smart, very smart. This type of seller is very tough to negotiate with and usually gets out at a premium. They’re usually very well advised by smart bankers and lawyers, too! I’ve been in this position myself and when I did it well, I made a "ton of money”! It's like when Tottenham sold Gareth Bale to Real Madrid. This happens in business when you have a hot little business that the big boys need. Besides the howls of protests in public, they were rubbing their hands in the board room with total glee! I know if you’re a fan of Tottenham, you might not have liked it, but £86m for a young player… go for it! In business we’re always doing the same. I remember one time with a business we were developing, I needed hundreds of millions of dollars to take it to the next level. This meant investors would make us minority owners. I opted to sell and take my money elsewhere, even though I knew it would be big one day. No regrets… Remember the guy who sells "day-old chicks”? This was me on that one! Now if you’ve finally decided to sell YOUR business (whether a one-person shop or a global giant) let’s talk about a few key things you should be thinking about: __“Is the time ripe to sell?” If it’s not a “distressed” sale, this can be difficult to answer: Sell now? Or later? Especially if a potential buyer isn’t yet knocking at your door, external market factors like interest rates, input prices, new competitors or innovations, income tax issues, regulatory changes, economic forecasts, etc. all could impact your decision. As always, do your homework and consult experts when necessary. Like I wrote a few weeks ago, don’t procrastinate when facts are obvious, but also don’t allow yourself to be pressurized into making a hasty decision… especially not before asking and answering the all-important question