Ryan Daniel Moran shares three ways to boost your sale price: present your own term sheet to control negotiations, combine businesses so buyers see consolidated value, and show projections instead of just listing with a broker.
Hey, what's up everybody? I'm Ryan Daniel Moran and I've got some advice for those of you who are selling or thinking about selling a business or your company. So I'm going to give you three things that are going to add extra dollars to what you would get for the sale of a company. I've sold two companies, so I've made a few mistakes and had some big wins as well. And so I'd like to invite you to learn from some of the mistakes that I've made. I also we advise a lot of businesses that have built companies and are getting ready to sell inside of one of our mastermind programs and also create opportunities for them to invest the money for passive income and wealth once they get it. But first, in order to get there, we have to maximize the amount of money that we're getting for the sale of the company. And the first thing that I would recommend that you do is that you control the frame of the conversation with your potential buyers. Here's what I mean by that. Most entrepreneurs and business owners, when they're going to make a sale, they're so either intimidated or excited by the amount of money that they're going to get. Let's say it's $10 million for the sale of a company or even $1 million for the sale of a company. They're so excited or intimidated by the person giving them the money that they think that the other party has all of the power. But if you can reframe the conversation so that you're the one with the cash flow, you're the one with the goods, you're the one with the thing that the buyer wants, then you're able to control your own terms from the get go. And that can be a really important negotiating tactic. So the way that you do that is that you have a term sheet from the beginning in which you say, this is what I'm looking for. These are the terms that I want out of this deal. And you give that to your broker, you give that. Actually using brokers is another discussion, whether it's good or bad. And we can have that talk. But actually having the terms that you give to the buyer right at the beginning of the conversation puts you in the strong negotiating perspective. So that is tip number one. And that can add basic. What that can do is it can boost the amount of money that you get for your company because it creates a little bit of a buying war for the people you're working with. But most importantly, it keeps you getting the price that you want because otherwise people will chip away at all of the holes they find in your company. Okay, so that's number one. Number two, look for partnerships that can boost the valuation of your company. So for example, I work with a lot of physical product brands that are selling on Amazon or Shopify or Kickstarter and if all they did was go out to their manufacturer or a manufacturer who was in a similar market and they were thinking about going to market too, and the two of you created a roll together, or if you went to some of your competitors or some of the other brands that you work closely with and you were all thinking about going to market at the same time, if you combine your companies or even just approach the same buyer at the same time, that can often boost the valuation of your company because it can be seen as a potential roll up. And a private equity group or sophisticated buyer will know about that strategy. So they will potentially pay more money for.
Consolidation of brands or consolidation of companies that are in the same industry versus just buying one, just buying you. So I've seen that be able to dramatically boost the amount of money that you get for the, for the sale of your company. So that's number two. Number three, 100% come to the table.
With a prospectus or a projection about where your company is going. A lot of times on entrepreneurs will just go to a broker and they'll say, take me to market. Now I've done this. So I know and I have a lot of, I have, I have students that have sold companies for over $20 million. I have one that sold for over $50 million that came to market without any sort of prospectus, without any sort of projection of where they're going. Now that doesn't need to be like fancy numbers that you pulled out of the ether, but it can be the trend of your business.
Of what you would do in the business if you were to keep it. What would be the two to three year plan with the current operating team if you were to stay in place? What products are you going to release? What advertising are you specializing in right now? How big is the list right now? What are the other assets beyond just the EBITDA or the profit of the business? Many, many entrepreneurs go to market without this and brokers are just too interested in getting a deal done to worry about any of that. It's absolutely essential that you put that together. Now I know when you're going to market, it's exciting to be looking at a 1 or a 5 or a $10 million check that's just showing up. But we're talking about the difference of a few million dollars here. And believe me, when you go to close, those few million dollars really matter. And I have made the mistake of not doing that in the past. I have students that have made the mistake of not doing that in the past. And the people who correct that before they on the table walk home with, you know, an extra million to $5 million. So if these five minutes added a million dollars to your bottom line, then hopefully this was a good use of your time. There's one other thing, and it's probably the story for another video, but please have an investment plan for those dollars. And my best deals have usually come from what are called private placements, which I'm sure we'll talk about in a different video. But most entrepreneurs aren't ready once it shows up and they end up blowing it. And I know you think you're not going to be one of those people, but believe me, if you don't have a plan in place, that money goes away quicker than you would think. So this is one of the things we work with people on in our Mastermind. We talk about getting ready for sale, getting the most possible, and also investing the money so that you never have to work again. And this is just one of the things that I thought would be beneficial for you. Hope you found this helpful. If you'd like clarification, let us know in the comments. Thanks for watching it.
