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    How to Build a Business and Sell It for Millions: The Essential Moves for Every Small Business
    How to Build a Business and Sell It for Millions: The Essential Moves for Every Small Business
    How to Build a Business and Sell It for Millions: The Essential Moves for Every Small Business
    Ebook323 pages5 hours

    How to Build a Business and Sell It for Millions: The Essential Moves for Every Small Business

    By Jack Garson

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    About this ebook

    In How to Build a Business and Sell It for Millions, MBA meets Main Street, with a combination of inspiration and invaluable practical advice.

    Finally, the positive economic news every businessperson is waiting to hear. Jack Garson says the long economic downturn will give way to a major buying spree by cash-rich companies—and they could be in the market to purchase your small or medium-sized business. It's the ultimate payday for everyone who wants to live the American dream, whether they're starting a business or already own one. Millions of dollars are on the table. But will you and your business be ready?

    How to Build a Business and Sell it for Millions is a must-read for every business owner and would-be entrepreneur. In entertaining and elaborate detail, Garson outlines the vital moves your company needs to make to become an attractive acquisition by other firms:

    · Do you have a competitive edge that sets you apart from your competition?
    · Are both you and your company sustainable and able to outlast the bad times to become a success?
    · Can you stop being a "Derek," the boss who suffers from "Founder's Dilemma," micromanaging everything
    big and small?

    How to Build a Business and Sell it for Millions uses real life examples to explain how the goal of selling your company needs to be linked to every business decision you make: hiring, compensation, contracts, financial reporting and dozens of other areas often overlooked by busy entrepreneurs. While many business owners struggle to get to the next day, Garson has the inside scoop on achieving the opportunity of a lifetime— selling your company for vast riches.

    LanguageEnglish
    PublisherMacmillan Publishers
    Release dateMar 16, 2010
    ISBN9781429961721
    How to Build a Business and Sell It for Millions: The Essential Moves for Every Small Business
    Author

    Jack Garson

    Jack Garson writes from the trenches of the business world. As founder of Garson Claxton LLC and leader of his law firm's business group, Jack has guided companies from start-up all the way to the celebration dinner following the big sale. His extensive understanding of the business world is why he's sought after to be the lead negotiator in multi-million dollar sales of companies. Jack also serves as legal and strategic advisor for numerous national, regional and local companies, helping them overcome challenges and grow, succeed and sell. In addition, Jack is a director of the prestigious Metropolitan Washington, D.C. Airports Authority, which oversees Dulles International and Washington Reagan National Airports. He writes a monthly column for SmartCEO magazine, a leading business publication in the Washington, D.C. region. Jack graduated with honors from both the George Washington University National Law Center and the University of Maryland.

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    • 5/5
      I loved this book.Jack Garson has written THE book that every entrepreneur should read if they are interested in being successful (whether they want to sell their business or not). And Mr. Garson would know, he's an attorney that advises business owners on preparing their business to sell and also helps put the deal together (all jokes about lawyers aside, you want one with you when invading the shark infested waters of business deals). While the process of selling a business reminded me a great deal of selling a house, I was also reminded that if you don't do your homework you'll end up leaving (lots of) money on the table. Garson teaches you where to put your efforts in order to get the best deal possible. I could gush on and on about how great this book is but instead I'll put some personal worth behind my review. I'm not a small business owner but my husband is. For me, the book addressed the psychological aspect of selling, as the mind set of the business owner may not mesh with the mind set of a business seller. Garson addresses this issue plus the issue of the business owner being all things to all people in his business; he helps you get your priorities straight (thank-you Jack, I've been after my husband for years on that one). I then gave the book to my husband to read and he enjoyed/learned from it as much as I did; he is now 'borrowing' it to have his business partner read it. Both my husband and his partner are impossibly busy people and for them to both read the same book it had better have earth altering information in it. This is such a book. Are they going to sell their business? I don't know but I do know they will be prepared for anything that might come their way. As a final note I have to say that Garson has a writing style that was a joy to read and wicked sense of humor that is laugh out loud funny. Terrific book, highly recommended, especially for any business owner (or the people that love them).

    Book preview

    How to Build a Business and Sell It for Millions - Jack Garson

    1

    Planning to Sell

    Putting the Horse in Front of the Cart

    America has hunkered down. People have cut back wherever they can. Folks are brown-bagging lunch—if they still have a job. They’re cutting their own lawns and one another’s hair. Families take in-home staycations instead of trips to Disneyland.

    Your moment has arrived.

    You may have always wanted to start your own company. You may have just gotten fired and have no other choice but to go into business for yourself. You may have a business that isn’t growing and needs fixing.

    Perfect timing.

    Building and selling your own business has always been one of the greatest paths to wealth. Now it’s the opportunity of a lifetime. This is the best time in decades to plunge in. As the economy revives there will be pent-up demand for what businesses have to sell. Better still, people with briefcases full of money will be clamoring to buy those businesses.

    But it’s not enough to build your business now and worry about selling it later. From day one, you need to know what buyers want to buy and then create it. You shouldn’t knock yourself out for years building a business only to discover you can’t sell it. Planning to sell—from that very first day—is putting the horse in front of the cart.

    The Coming Boom:

    Making Your Fortune in Business

    The next big thing in business is starting your own company, building it up, and selling it for a bundle. When real estate crumbled in the early 1990s, investors ultimately turned to technology companies and created the dot-com boom. When that boom went crash, investors renewed their love affair with real estate—and thus was born condomania. It felt like there were more construction cranes in Miami and Las Vegas than tourists. Now stocks and real estate have plunged once again. Battered investors are not about to fall madly in love with either of them for a while. Personally, I’d rule out comic books, baseball cards, and Beanie Babies, too.

    Making money the old-fashioned way, by starting a business, growing it like crazy, and then cashing out, is about to come back into style.

    If you’re wondering if the timing is right, consider this: At this writing we are in the worst recession since the Great Depression. Throughout history, though, some of the most successful businesses were created in the most difficult of times. General Electric was formed by Thomas Edison during the six-year recession called the Panic of 1873. Disney began business in the recession of 1923– 24. Hewlett-Packard was started at the end of the Great Depression. It only stands to reason that a company that succeeds in dire circumstances—when so many others fail—will thrive in normal times and excel in boom times.

    Now consider the buyers of businesses. In recessions, they conserve cash and maybe even run out of it. Certainly they get cautious. So they slow down and even stop buying businesses. Coming out of a recession, they’re looking for steals. They start buying companies again—but just the best businesses and only at bargain prices. Buyers make a killing off those early deals. Then, pumped up by those lucrative returns, they broadcast their success to attract acclaim and investors. Thus the gold rush begins. Other buyers stampede onto the scene, looking to strike it rich buying companies.

    The business sales in the next few years will bring on a mad dash of buyers and deals that get better and better for sellers. If you start now, you’ll be in a position to sell at an extraordinary time.

    Planning to Sell

    Planning to sell is all about building—from the very start—a business that people want to buy. The folks who purchase companies don’t want a business where every customer asks for you and you’re long gone. They certainly don’t want a business that, as harsh as it sounds, dies with you. They want an enduring institution, a reliable moneymaking machine that will grow and last.

    Of course, you don’t need to build up your business or sell it. You can run your business so that it meets your everyday desires, whether that means golf every afternoon and poker every night or just enough money for Cheez-Its, lottery tickets, and cable television. They even have a name for that type of business—a lifestyle business, because it prioritizes your lifestyle over your company. You can run your business like a hobby. You can live a decent life as chief bottle washer and cook. You can even put a bullet in your business when you retire. Life is full of choices.

    But to get all of the possible value out of your business—to increase the chance you’ll achieve enormous wealth—you need to build something that you can sell. You need to create something that buyers compete to buy.

    Buyers look for a lot of things, but at the very top of the list are the following:

    PROFITABILITY: A business that consistently makes money. Ideally your profits increase every year.

    COMPETITIVE EDGE: A business that beats the competition. Face it: once you’re making money, you’ll attract rivals. Buyers want to make sure that competitors can’t duplicate your success or cut into your profits.

    SCALABILITY: A business that can grow bigger. Buyers want to increase the size, revenues, and profits of your company. The decisions you make from the outset, from how you form your company, to the equipment you buy, to the brand you establish, all affect scalability—the future ability to grow your business. If you want to sell for big bucks, you need a company that can get big.

    SUSTAINABILITY: A business that can make it through adversity. You may not have enough capital. You may not back up your computers. You may not even have employees who can do your job if you get sick. But if your company can’t withstand a few disasters, you’ll never be in a position to survive, much less sell. Buyers don’t want a company that tumbles like a house of cards in the first heavy breeze. They’re only going to pay a lot if you’ve built a company that can make it through tough times.

    There’s more. There’s picking the right legal structure for your business, creating financial systems so you can manage your business, avoiding unnecessary risks, preparing good contracts, marketing, government relations—and more. There’s learning the way businesses are sold, how to assemble the deal team to sell your company, and how to negotiate the sale itself—and more.

    Building a business, overcoming problems, and selling your company present countless challenges. But you don’t have to do it the hard way.

    The Easy Hard Way

    I’ve seen sweat on the foreheads of great business leaders struggling with momentous decisions. I’ve sat in thousands of boardrooms and business meetings where entrepreneurs agonized over issues that would determine the fate of their companies. I’ve seen their responses yield victories and defeats. In the lessons that follow, you’ll see and learn from their successes and failures.

    With the guidance in this book you can learn how to build a business that sells. This is the insider’s guide to what works and what doesn’t—what you need and what you need to avoid. Selling a business can be hard. But it’s not hard to sell a good business.

    2

    Profitable Business

    Model

    Making Money Every Time

    Alex took the road less traveled. He was the only one of my old college buddies who struck out on his own after graduation. The rest of us went the tried-and-true method, landing jobs in corporate America. Boy, did we think we had it made. For the first time we had money in our pockets, wore nice suits, bought new cars and town houses, got married, and started down a well-worn path toward forty years of working for The Man. Alex, on the other hand, always looked like he just rolled out of bed, never shaved, wore ripped jeans and old sweatshirts, and drove a beat-up old Corvair that puffed out big blue clouds of burning oil.

    But Alex had a plan. Not just any plan. He had a business plan.

    Alex wanted to dot highways running through the countryside with dozens of billboards. He saw dollar signs because a new law banned most highway signs. New billboards would be scarce but all that much more valuable to advertisers. Alex’s plan: Find locations. Lease them. Build billboards. Sell ads. Open bank account. Deposit advertisers’ checks.

    Early on we thought Alex and his plan were crazy. We had visions of tromping out in the fields, building billboards, and gluing up ads. You might as well have tried talking us into becoming garbagemen. No one at the country club was going to be bragging about their son the billboard mogul. We all thought Alex was crazy, until we saw how much money he was making. By then, there were only two things we could do: overcome our envy and someday include Alex’s plan in a book. I’ve only managed to accomplish the latter.

    Successful Business Plans and

    Profitable Business Models

    Unlike the plans of so many hopeful entrepreneurs, Alex’s plan made money. In business terms, he had a (1) successful business plan, which, when properly implemented, produced a (2) profitable business model.

    These two concepts are often intertwined, but it is important to understand the connection and the differences. Here’s a simple analogy to help you better understand these terms.

    Business Plan = Blueprint.

    Business Model = House.

    If the blueprint (business plan) is good, the house (business model) will have every room and amenity you want, won’t cost a fortune to build or maintain, and will be easy and profitable to sell.

    Alex took his blueprint (his plan) and built a billboard empire (the model). Armed with his homemade map and knowledge of the laws, Alex knew exactly where to go. A bunch of farmers owned land in the right locations. They didn’t take to shiny-shoed city types. Fortunately, Alex wasn’t. Unshaven and unpretentious, he charmed them with his genuine aw shucks, I’m just a hardworking kid. The farmers warmed to him. Eventually, they agreed to let Alex lease small slivers of their land and install billboards. It didn’t cost much to put up each billboard, maybe a few thousand dollars. Then the advertisers, starved for outdoor locations, eagerly paid thousands of dollars per month for each of Alex’s choice spots. The revenue from each billboard paid for all the start-up costs in just a few months. After that, the business generated thousands of dollars per month in profits from each and every billboard.

    So what happened here? Alex had a business that made a lot of money and would make more as each year passed. His competitors couldn’t do much to change that, because he had airtight agreements that locked up key pieces of land for many years. And the advertisers weren’t going away. They would always want locations where thousands of people in passing cars could see their messages. Best of all, there would be plenty of people eager to buy Alex’s business. Why not? It made money. It made more money as each year passed. It would make money in good times and

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