MBA1791 Creating a Business To Be Sold One Day

Let me tell you about Intuit QuickBooks. When I was starting out my business, I remember sitting at my desk late at night, not working on my business but cleaning up numbers, tracking and reconciling payments and wondering how this became my life. But once I automated the admin side of things, of my finances, those nights had disappeared and I felt a whole lot better. Outdo it with intuit QuickBooks QuickBooks is the trusted end to end solution that businesses rely on for getting paid, managing finances, paying employees, finding new customers, and more. QuickBooks provides a team of AI agents and trusted experts, so doing it yourself no longer means doing it alone. Their payment agent gets you paid faster, their customer agent finds leads, follows up and secures more sales, and the accounting agent automates and categorizes transactions. Get your critical business jobs done with QuickBooks on the Intuit platform. Ready to save on new tech? It's time for Dell Tech Day's annual sales event celebrating our customers with fantastic deals and benefits. Perks include Dell rewards, free shipping, premium Support and more. PCs like the Dell 14 with Intel Core Ultra processors will help you do more faster and with a premium suite of monitors and accessories, you can upgrade your whole setup with amazing savings. Visit Dell.com deals. Hey O. Welcome to the $100 MBA Show. Because you need to know not just what to do, but how to do it. That's why we deliver daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of Webinar Ninja, an independent software company I started with my partner back in 2014. And in today's episode you learn Creating a Business to be Sold one Day Creating a business specifically to be sold to somebody at some point has a different strategy than a business that you're building so you can continue to run until you retire. This might be a lifestyle business, a family business, a business that actually is catered to your life and lifestyle, your passions, your wants, and how you want to pursue your goals in life. But another option is to build a business purely to be sold to the highest bidder. You're essentially spending a period of time in your life to build an asset that has value that you can sell. That kind of business needs to be set up in a different way. The choices you make along the way and what you build around your business will differ and it's critical for you to be successful for that sale, for that exit in the future. Let's talk about what those things are. Let's Talk about what the advantages are in terms of building this type of business and how to pull it off. Let's get into it. Let's get down to business. Gas, snacks, tolls. This trip is draining my wallet.

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Many people when they start a business, they start it out of a passion, out of a love for an idea, skill or discipline. You might like health and wellness. So you start a health and wellness blog and sell health and wellness courses and books and guides and that's great. But if you're looking to do this for the long term, you're going to leverage your own personal brand, your own personal. You're going to infuse who you are as a person in your life into the business because hey, this is your baby. But a different approach is to actually build a business with the intention to sell it in the short term, future, in the next three, four, five years. If you're building that kind of business, you need to make some different decisions. It needs to be easy to sell, it needs to be easy to transfer over to somebody going back to the health and wellness blog. If your personal brand, who you are, is 100% embedded in that business, it's going to be hard for you to sell it and be free and clear of it. It's not impossible. You can sell to another brand or another business or personality and they're really just interested in your customer base, but that really narrows down your options in terms of buyers. So most people that look to build a business that needs to be sold don't go down the personal branding route. They actually have a business brand. They have its own identity. The business itself has its own identity, its own brand. It's not affiliated with the person or the founder or even the person that's doing all the teaching or the content. If this is an information based business, a good example of this is CreativeLive. CreativeLive is a website that sells content, different courses on different topics. The founder, Chase Jarvis, a very popular photographer and artist could have easily really embedded his own personal brand into CreativeLive. But the problem with that is if he wants to sell CreativeLive, it's going to be really hard for him to do that and step away. Much of the value is associated with him. Now, in the short term, that sounds like a good idea. By using his personal brand, which is very popular, he is famous. But in the long term, it's actually better for him to invest in building its own identity in the brand name CreativeLive. So let's look at your business. If you were to sell it, one of the best ways to know if your business is prepared to be sold at some point is to ask yourself, would you buy this business if you were not the founder? And if not, what would you change? What would you do? Another good thought experiment is if you did buy this business, what is the first thing you would change? And change that now, and that will increase the value of your business. One of the ways to make your business more sellable is to create systems, or what we call SOPs, standard operating procedures. This is basically a playbook instruction manual for everything that happens in your business. We're talking about everything. How's your website managed? How do you reply to customers, what's your customer service protocol, how's your financing and accounting doing? Is there documents on how to pay your staff, all that kind of stuff. The reason why SOPs are important is because they're basically an easy way for you to hand them over to somebody so they can just follow the SOP and run your business. At the end of the day, they're not only buying the business itself, they're buying the systems that run the business. Imagine you had to buy business and you had to inherit doing everything in this business with no instruction, with no manuals, with no procedures. This would make you at the mercy of all the people, usually managers or even one person, the manager or the owner of the business. To understand how to run this business, you got to keep paying this person and you better hope that they remember or they have it all in their head and they give you all the information to run the business. What you want to do is you want to make sure this business can be run off documentation and doesn't require you at all. So actually, when you sell a business, you can go on vacation. You don't need to be a part of the business anymore. If you're building a business to be sold one day, then you need to see your business as an investment, as an asset. How can you increase the value of your assets. Well, what intellectual property do you have? Do you have any trademarks? Do you have any patents? What about domain names that you own that can really help you leverage your business? Especially the main domain name for your company. Is it a dot com? Is it a short domain name? Is it a valuable domain name? How profitable is your business? How much runways in the bank? All this stuff helps you be prepared to be sold. So when a buyer does come along and you get the right price, it's a no brainer for them. Now, many people see this as sort of like very heartless and kind of unemotional and very transactional. It doesn't have to be. Even if you love your business and love what you do and you're passionate about it, being prepared for sale and having all your ducks in a row just increases the value of your business. At some point, Even if it's 10, 20, 30 years down the line, you may want to retire. You may want to pass this business on to somebody, even if it's a family member. You want to make it easy on them and you make it easy on them if they choose to sell it one day. Having just the mindset of creating a business that's going to be sold one day also makes you more efficient, makes you run a cleaner business. What does this mean? This means that you're going to audit your business regularly. Because hey, what if somebody shows up, wants to buy it and you got all these tools you're paying for that you don't know about and you're spending money for no reason. You have decisions that you made that you don't even remember why you made those decisions because you didn't have the minutes to those meeting notes documented in your your project management software. You have security flaws in your business. Maybe your team members are not using a company email to access documents like your Google Docs folder. Anyone can share your documents easily. So just having this mindset allows you to audit your business to say, oh man, I got to make sure that I shore up all these issues. What's going to happen is that you're actually going to run a more efficient business, which is going to make you more profitable and more productive. So even if you don't sell, you're running a better business. One of the ways that you can actually have an audit done like this is to reach out to a company to give you a business evaluation. They'll come in and valuate your company and give you a price based on what they see and they'll tell you, hey, what's going on here? What's going on there? Can you provide this information? And they're going to, you know, shed some light on some areas that need improvement. A site that you can explore is Empire Flippers. They actually sell online businesses all the time. And you can see how much businesses are worth and how much they're selling for, and you can reach out to them so they can possibly put your business on the market.

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To wrap up today's lesson, I want to mention that you can go into a business. You could start a business with this mentality. What does that mean? That means that you honestly don't want to run this business for more than three to four years, maybe five years max. And that's okay. There's a lot of entrepreneurs out there that don't like doing things forever. They like new things, new ideas. They want to build a business to a certain point and then sell it. And that's okay to have that mentality. It doesn't make you a quitter, just makes you a great entrepreneur that knows how to start and build a business to a certain point. I know many entrepreneurs that do this. They start businesses two, three, four at a time, sell them, and have accumulated millions in profits and personal profits through selling these businesses as they grow them. These are people that see opportunities in the market, leverage these opportunities, fulfill an audience, fulfill a market, need to a certain point. And then when they've done everything they want to do with that business, they put it on the market for sale. And there's tons of entrepreneurs that are ready to take it off their hands and take it to the next level. That's their area of expertise. Taking a business that's at a certain point and taking it to the next level. Now you might be thinking, well, do I have to be an expert in all these businesses? Do I have to absolutely love and be passionate about all these businesses? Well, my answer is tomorrow's episode, actually, where I explain why you don't need to love what you do to be successful at business. Following your passion is one of the most overrated pieces of advice in the world of entrepreneurship. And I'll explain why in tomorrow's episode. So make sure you hit subscribe so you don't miss a beat. Thank you so much for listening to today's episode. Before I go, I want to leave you with this. If you like this idea of creating a business to be sold one day, you can just experiment with a small business. There are people that just buy domains, build a presence like a blog on there that gets traffic with articles on that topic of the domain. Get it? So it has like 10 to 20,000 visitors a month and then sell the domain. Anybody in that niche will be happy to buy this domain so they can redirect that traffic to their own domain. And these types of quick flips can earn you five figures with very minimal work with very minimal investment and time. Thanks so much for listening and I'll check you in tomorrow's episode. Free ride Friday. I'll see you then. Take care. Gas, snacks, tolls this trip is draining my wallet.

Yeah, but we'll be with family.

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