The Importance of Owner Flexibility

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You shouldn’t expect to sell your company overnight.  For every company that sells quickly, there are a hundred that take many months or even years to sell.  Having the correct mindset and understanding of what you must do ahead of time to prepare for the sale of your company will help you avoid a range of headaches and dramatically increase your overall chances of success.

First, and arguably most importantly, you must have the right frame of mind.  Flexibility is a key attribute for any business owner looking to sell his or her business.  There are many variables involved in selling a business, and that means much can go wrong.  An inflexible owner can even irritate prospective buyers and inadvertently sabotage what could have otherwise been a workable deal.

Be Flexible on Price

A key part of being flexible is to be ready and willing to accept a lower price.  There are many reasons why business owners may fail to achieve the price they want for their business.  These factors range from lack of management depth and lack of geographical distribution to an overreliance on a handful of customers or key clients.  Of course, one way to address this problem is to work with a business broker or M&A advisor in advance, so that such price issues are minimized or eliminated altogether.

Be Prepared to Compromise

In the process of selling your business, you may want to achieve confidentiality and sell your business quickly and for the price you want.  However, the fact is that most sellers find that it is possible to have confidentiality, speed, and the price you want, but not all three.  Ultimately, you’ll have to pick two of the three variables that are most important to you.

Be Patient

A third way in which business owner flexibility can boost the chances of success is to embrace the virtue of patience.  By accepting the fact that businesses can “sit on the shelf” for a considerable period of time, you are shifting your expectations.  This realization can help reduce your stress level.  The fact is that stressed out owners are far more likely to make mistakes.

Sometimes Losing is Really Winning

A fourth way in which business owners should be flexible is realizing that you and your lawyer will not win every single fight.  There will be many points of contention, and a smart dealmaker realizes that it is often better to have a good deal than a perfect deal.  You may have to make sacrifices in order to sell your company.  Simply stated, you shouldn’t expect the other side to lose every point.

At the end of the day, a savvy business owner is one that never loses sight of the final goal.  Your goal is to sell your business.  Seeing the situation from the buyer’s perspective will help you make better decisions on how you present your business and interact with prospective buyers.  Maintaining a flexible attitude with prospective buyers helps to position you as a reasonable person who wants to make a deal.  Goodwill can go a long way when obstacles do arise.

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The Main Street Lending Program

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There is no doubt that the COVID-19 situation seems to change with each and every day.  The disruption and chaos that the pandemic has injected into both daily life and business is obvious.  Just as it is often difficult to keep track of the ebbs and flows of the pandemic, the same can be stated for keeping up to speed on the government’s response and what options exist to assist companies of all sizes. 

 In this article, we’ll turn our attention to an overlooked area of the government’s pandemic response and how businesses can use a whole new lending platform to navigate the choppy waters. 

As the pandemic continues, you will want to be aware of the main street lending program, which is a whole new lending platform.  It was designed for businesses that were financially sound prior to the pandemic.  Authorized under the CARE Act, the main street lending program is quite attractive for an array of reasons.  Let’s take a closer look at what makes this program almost too good to be true.

This lender delivered program is a commercial loan.  Unlike the PPP, there is no forgivable component.  However, the main street lending program does have one remarkable feature that will certainly grab the attention of all kinds of businesses.  It can be used to refinance existing debt at a rate of around 3%.  With that stated, it is also important to note that businesses cannot refinance existing debt with the current lender.  Instead, a new lender must be found.  Generally, loans are a minimum of a quarter million dollars and have a five-year term.  In another piece of good news, there is a two-year payment deferment period.

The main street lending program can be used in a variety of ways.  In short, the program is not simply for refinancing existing debt.  Additionally, there is no penalty for prepayment.  The way the program works is that lenders make the loans and then sell 95% of the loan value to the Fed.  This of course means that the lender is only required to retain 5% of the loan on their balance sheet.  The end result is that lenders can dramatically expand the amount of loans they can make.

Whether it is the PPP or a program like the main street lending program, there are solid options available to help you.  Businesses looking to restructure debt or put an infusion of cash to good use may find that the main street lending program offers a very flexible loan with great interest rates.

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Why Does Your Business Need Google Reviews?

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In today’s business climate, reviews are the differentiator.  Years ago, people commonly asked for references when they were vetting a product or service.  But these days when people are searching for a local business to work with, they are likely to conduct research on their own and read online reviews. 

Google reviews can give businesses a big credibility boost without having to spend a dime.  Let’s take a look at some of the key benefits.

Increased Credibility & Trust

According to statistics, approximately 91% of consumers read reviews to determine credibility of a local business.  In fact, 84% of consumers say the positive reviews have helped them gain trust.  Without the reviews, that level of trust would not have been established. 

Needless to say, people trust Google.  The fact that these reviews are on a 3rd party website increases transparency.  These reviews have much higher value than testimonials posted on the actual business website.

Improved Business Conversions

Once a potential customer gains trust in your company through reading Google reviews, it is more likely the conversation will get converted to an actual business transaction. 

Customer Feedback Loop

When your customers write reviews about your business and post them on Google, these reviews often clearly mention details about your product or service.  Through this means, future customers become educated.  These reviews can also serve as a feedback loop for you if things need improvement.

Increases Online Reputation & Visibility

The power of online marketing methods you might be using to promote your business will be amplified, as users will become more attracted to your business due to 5-star reviews.  This factor increases online traffic to your website and an increase in leads and business.

Another fact to be conscious of is that your clients will review your products or services whether you want them to or not.  If you fail to set up Google reviews, you’re missing out on the opportunity to gain a level of control and visibility.

How to Set Up Google Reviews

  • Create a Google My Business account.  – Visit https://business.google.com/ to sign in or create a Google account for a business.  Complete the step by step process by filing required information like email, phone number, business details, etc.
  • Ask clients to review your services. – Start sharing your Google My Business URL with clients and ask them to post a review about your services.  When asking for reviews, you can mention to clients that their review will help everybody else make an informed decision when they are looking for help.  It is important to ask about the review within a few days of closing your transaction.  If more time goes by, the client may be less motivated to post a review for you.
  • Remind clients. – Everybody is busy.  Therefore, there is a chance that your client might forget to write a review.  In this case, we recommend reminding them to do so.  You can also politely inquire if they need any help posting the review that you discussed.

Through the above-mentioned process, you can begin generating reviews for your business.  Of course, it goes without saying that you can only guarantee good reviews when you are providing excellent customer service along with a top-notch product or service.

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Getting Back to Business After the COVID-19 Pandemic

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Historians have long known the historical relevance and impact of epidemics and pandemics.  Despite our various technological advances and the complexity of our society, disease can instantly change the course of history.  Not having a robust global system for dealing with disease and pandemics comes with a hefty price tag.  In the case of the COVID-19 economic crisis, the price tag will no doubt be in the trillions. 

You can’t control what has happened, but you can focus on what to do when the pandemic is over and life begins to slowly return to normal.  In his recent article, “How to Hit the Ground Running After the Pandemic,” author Geoffrey James explores what businesses need to do to jumpstart their operations once the pandemic is in the history books.

James wants his readers to understand that the pandemic will end and that business owners need to be ready to charge back in when the pandemic is over and the economy rebounds.  As James points out, if history is any indicator, the economy will eventually rebound. 

Almost everything about this economic downturn is unique.  Take, for example, the fact that the U.S. has just seen its largest-ever economic expansion.  The gears and wheels of the economy were spinning along quite quickly before the pandemic hit.  This could help restart the economy faster than in past severe economic downturns.  In short, many experts feel that this particular economic downturn could be short, but of course, this is speculation.  There is no way to know for sure until COVID-19 is in the rearview mirror.

James correctly asserts that businesses need to put together a plan for how they will get up and running as soon as the pandemic is over.  His recommendation is to divide your plan and thinking into four distinct categories: Facilities, Personnel, Manufacturing, and Marketing.

Each of these categories has three key questions that business owners should be asking themselves so that their businesses are ready to hit the ground running when COVID-19 is over.  Below are a few of the key questions James recommends asking.

  1. How can we create the most sanitary and disease-free workplace possible?
  2. Which employees will continue to work from home?
  3. When there’s a spike in demand, how will we ramp-up?
  4. What will be our “We’re Back!” marketing message?

The pandemic caught everyone except the experts off guard.  Moving forward, business leaders, think tanks, and politicians alike need to work to develop and implement robust plans to minimize the damage caused by pandemics.  Humanity, and business, has been “lucky” several times in recent years, as we dodged bullets ranging from Ebola to SARS. 

As James points out in his article, “Failing to plan is planning to fail.”  Businesses need to plan for the recovery and they need to plan for another pandemic because another one is quite possible especially if better planning and decision making are not firmly entrenched in place.

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COVID-19 Advice for Hospitality Businesses

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Clearly, some industries are taking a bigger hit from COVID-19 than others.  Any industry that requires a great deal of interaction with the public, or where people gather in large groups, are obviously having very tough times.  Movie theaters and restaurants, for example, have essentially gone dark.  Some restaurants are easing the bloodletting a bit by providing delivery, but in the vast majority of cases, revenue pales in comparison to what it was prior to the pandemic. 

While there is no doubt that the hospitality industry is suffering right now, business owners should understand that there are concrete steps they can take now to improve their odds of surviving the pandemic.  In this article, we’ll explore a few of these key ideas.

One of the areas every decision maker and business owner in the hospitality industry should be thinking about right now is staff.  During a recent industry roundtable discussion, John Howe, chairman of the International Association of Business Intermediaries, pointed out that staffing problems will continue long after the pandemic has paused or is over.  He believes that hospitality businesses will have a tough time getting the staff they need, especially in the short run. 

His key piece of advice is to work to have a line on people for key positions.  This will allow you to at least get back up and running with basic operations.  While it may be a while before hospitality businesses are at “full steam,” it is critical that they are able to open up in some fashion, as this will translate into much needed revenue.  Hospitality businesses looking to survive the pandemic should focus on making certain that key positions have been filled.  In this way, the post-pandemic relaunch can be as smooth as possible.

Founder and President of Cornerstone Business Services, Scott Bushkie, explained that there are a lot of hospitality industry people out of work right now, and this represents a real opportunity.  Now, is the perfect time to potentially upgrade staff.  There are plenty of experienced and proven hospitality people looking for positions.  The new people you bring may come with extra benefits such as bringing their customers, suppliers, and other relationships with them.  For those in the hospitality industry who may have always wanted to upgrade their team, now is perhaps the best time in history to do so.

Employees are a foundational element of your business.  Improving your staff means you’ve improved your business and boosted your odds of survival.  Bringing in new team members can help you prepare for the post-pandemic business environment.  It also offers up the potential for you to upgrade an important element within your business.

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Dealing with COVID-19’s Economic Impact: Planning and Communication are Key

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There are many things that you should be doing to deal with the COVID-19 pandemic.  At the top of the list is to be proactive.  Now is the time to be thinking about how best to position your business after the economy has returned to something near normal.  Now is not the time for self-pity.  In fact, not preparing for the relaunch of the economy will cost you.

In David Finkel’s recent Inc. article entitled, “10 Things Every Small-Business Owner Needs to Do to Deal with the Impact of COVID-19 on Their Business,” Finkel outlines the 10 key steps business owners should take immediately.  Finkel is the author of 12 business books and CEO of Maui Mastermind business coaching company.

There is no way of knowing how long the COVID-19 fueled economic downturn will last, and that means time is of the essence.  Business owners, regardless of their particular sector, need to prepare as though the economy could relaunch tomorrow.

Finkel’s 10 Things: 

  1. Take steps to protect your staff and customers from getting sick.
  2. Tell your customers what safety steps you’re taking.
  3. Educate your staff on how to stay healthy at work and at home.
  4. Engage in scenarios planning to deal with how markets could change.
  5. Enlist vendors and suppliers for help.  You should ask them to negotiate payment terms.
  6. Take steps to plan out your cash flow.
  7. Open a dialogue with your management team.
  8. Go on the offensive and look for opportunities.
  9. Get your team together and brainstorm.
  10. Be sure your key leaders communicate in a united fashion.

There are definitely some commonalities amongst these 10 important steps.  You’ll notice that communication and education are at the heart of most of these points. 

There is a lot of fear and uncertainty out there.  More than almost any time in modern history now is the time to communicate.  All business owners should be advised to communicate with their customers, clients, suppliers, staff, and management team in a clear fashion.  Effective communication based around a consistent and logical message can help to reduce fear.  The fear sections of the brain are driven by our primordial ancestors’ dread of the unknown lurking in the darkness.  Part of being a good leader is to reduce those fears whenever possible. 

Another common thread is planning, which includes looking for new opportunities.  Whenever there is chaos and fear, there are also opportunities.  You should be looking for those opportunities, whether it is improving your own business practices or looking for other companies to buy.

Good communication and planning can help you navigate these choppy waters.  Planning for the recovery from COVID-19 pandemic could be the difference between staying in business and going out of business.

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How to Make Remote Teams Accountable

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One of the many, many changes that COVID-19 has ushered in is the extreme uptick in people working remotely.  Social distancing has made working from home a necessity for millions. 

The technology that is allowing remote working to take place has matured greatly in the last decade.  Today, it is possible for team members to work from virtually any location.  Of course, as with most technologies, there is a potential downside.  Accountability can become a significant challenge with remote workers.  Of course, the more remote workers you have at a given time, the greater the potential challenges will be. 

Many businesses are struggling with the phenomenon of remote working, as it is something new for them.  Under normal circumstances, large numbers of employees working remotely simply wouldn’t happen.  In a recent article, “The Right Way to Keep Your Remote Team Accountable,” author Elise Keith, Co-Founder and CEO of Lucid Meetings, explores the key steps businesses should take to help ensure that their employees stay on target while working from home.

Starting Slow

Keith believes that for remote working to be effective that there are 4 major mistakes that should be avoided.  One of the biggest mistakes that employers, especially those unfamiliar with remote work, make is that they demand too much productivity right out of the gate. 

She points out that remote teams can, in fact, be very productive and even outperform their in-office counterparts.  Summed up another way, remote work can be extremely productive.  Keith’s perspective is that businesses should “identify the highest priority tasks right now and relax the rest.”  Business owners need to remember that they are not the only ones under stress.  The simple and undeniable fact is that your employees are feeling the stress of COVID-19 as well.

Getting Good at Working Remotely

The second major mistake she points to is that people are assuming the current pandemic situation is temporary.  Other crises will occur in the future, and it makes sense to be prepared.  As she phrases it, why not “get good at working remotely?”  Teams with good remote working skills are proving to be rather resilient right now.

Being Open to Technology

A third mistake she points out is businesses shouldn’t disallow the use of non-approved tools.  In short, now is not the time to worry too much about what software tools people are using.  Instead, she suggests creating an expedited process for the adoption of new tools.  If your team finds a new tool that boosts productivity, you should consider buying it. 

She astutely points out, “Software costs pale when compared to the costs of lost opportunity.”  At the heart of this point is the fact that now, more than any time in decades, is the time to set aside restrictive thinking and become more open-minded and flexible.  After all, your number one goal, and the number one goal of your clients, is to stay in business until the pandemic has passed.

Staying Flexible

Keith’s fourth mistake centers on management’s design to dictate hours and response times.  Remote work is, by its nature, going to be more flexible.  Trying to micromanage every move digitally is simply not a savvy move and will hurt morale. 

Instead, she feels businesses should opt for having a daily meeting via phone or videoconference with the team.  Additionally, she puts forth the idea of having a one-on-one meeting with every team member as well.

For many businesses and many situations, remote work may be the “only game in town.”  Trying to carry on business as usual is only going to cause headaches for everyone.  Remote work can be highly effective for you, especially when used correctly.

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Now is the Time for Focus

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As of late April 2020, there is one thought at the forefront of the vast majority of businesses around the globe, namely, what steps do I need to take to stay in business until the COVID-19 pandemic is over or recedes?  There is no doubt about it, this is the “big question” of the day. 

The global economic structure hasn’t seen this much uncertainty since WWII, and some would argue that we’ve never seen this level of simultaneous global economic disruption.  Knowing what steps you need to take to keep your business up and running is of paramount importance. 

In short, business owners must be sure that their businesses are in good shape.  You should take every step possible to position yourself for when the economy is back up and running at full steam.  Right now, there is a degree of chaos and uncertainty, but this will not last.  As a business owner, you need to focus on getting your house in order.

Now is not a time to take a vacation.  Instead, you should be focused like never before on the inner workings of your business.  You should be striving to find ways to improve every single aspect.  Of course, this is easier said than done.  There is a real psychological hurdle, as for many people it seems as though everything has “stopped.”  While customers, clients, and staff interactions have been dramatically reduced, now is not the time for you to “check out” mentally and wait for things to get better.

Rarely, if ever, has it been more important for owners to invest as much of their time and energy as possible.  After all, as a business owner, you have already shown a great deal of drive and determination, as well as at least some level of out of the box thinking.  You have proven that you have what it takes to get through the recent challenges. 

Many will feel dejected right now.  But you should pool on the same skill sets that allowed you to create a successful business in the first place.  What obstacles did you overcome in life to create your business?  Was your business created during a prior economic downturn?  The odds are that you already have skill sets and strengths that will allow you to survive the fallout of COVID-19.

For business owners who truly want to survive the economic stress of the pandemic, ultimately, focus is key to survival.  The odds are excellent that there are revenue streams and different approaches that may have been overlooked.  Your job is to identify and then exploit those avenues.

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Questions for Helping Businesses Survive the COVID

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Developing Your 90-Day Plan

Those who want to make sure their businesses survive this pandemic will want to achieve a laser-like focus.  It is important to realize that the forced downtime triggered by the pandemic affords you the opportunity to work on potentially neglected aspects of your business. 

Summed up another way, now is the time for dynamic and focused action.  In this article, we’ll address what you can do to help your business survive this unusual time period. 

Reevaluating Your Business

It’s time to step back and look at every aspect of your business, including your processes.  You should be encouraged to find new ways of doing things.  In short, now should be viewed as a time of opportunity to reboot your business.  That way when the pandemic has subsided, and your business picks up once more, it is more efficient, more effective, and more competitive.

Scott Bushkie, Founder and President of Cornerstone Business Services, recommended that business owners create 90-day plans where they look for ways to innovate.  This strategic plan should focus on what they are going to do and what they want to accomplish.  It is critical that there is an actual plan that achieves tangible results and not simply a list of things that should be accomplished.  Listed below are a few questions you should be pondering.

  1. How can I outperform the competition?
  2. How can I innovate?
  3. How can I increase my use of technology?
  4. How can I deliver my products and services in a different way?
  5. How can I reduce my operational costs?
  6. Have I reached out to my suppliers and creditors for assistance?
  7. Have I applied to applicable SBA COVID-19 focused programs?
  8. What do I want to accomplish in the next 90-days? 

It’s Time to Reboot

The main point is that businesses should not look at this pandemic situation as some sort of “miserable and stressful vacation,” but instead as an opportunity to reboot what is not working, and look for ways to make improvements in every aspect of your business.  This process begins by asking the right questions and striving to find the answers.

In answering these questions and finding ways to help boost your rates of survival, you should turn to every asset at your disposal.  Why not ask your management team as well as all of your employees for ideas that could help their business?  Everyone should understand that owners are looking for ways to keep their business healthy while navigating the pandemic.

Now is the time for reflection, short-term and long-term planning, and tangible actions.  Business owners should also consult with a range of business professionals, including, of course, business brokers and M&A Advisors.  Brokers are uniquely positioned to help business owners through this crisis.

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6 Tips and 90 Days to Protect Your Business

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There can be no way around it, Inc. contributor Brian Hamilton’s April 2020 COVID-19 centered article, “6 Actions to Take in the Next 90 Days to Save Your Business,” isn’t pulling any punches.  Hamilton, Founder of the Brian Hamilton Foundation, believes that the next 90-days could be make or break days for business owners looking to navigate the choppy waters of the COVID-19 pandemic.  His latest Inc. article provides readers with 6 actions they should take now to survive the economic fallout of the COVID-19 pandemic. 

Tip #1 Vigorously Control What You Can

Hamilton’s first tip is to “Vigorously control what you can.  Vigorously ignore what you can’t control.”  As Hamilton points out, you can’t control the economy; instead, you need to focus on what you can control.  His view is that there has never been a more important time to focus, “More than ever, you’ll need to go to war with things within your control.”  Now is the time to exercise control.

Tip #2 Guard Morale

During tough economic times, employee morale can be a real issue.  This brings us to Hamilton’s second point, “guard employee morale.”  Significant drops in employee morale can lead to serious problems with your business, which is exactly what you don’t want to see right now.  Hamilton notes that you have to be the general that helps his or her troops rise above potential panic.

Tip #3 Preserve Cash

Hamilton’s third tip is to “preserve cash where you can.”  He states, “Right now, your motto should be: Live to fight another day.”  The pandemic means that you need to keep expenses down and watch every dollar.  No one knows what the next few months, or the next couple of years, could have in store.

Tip #4 Be First in Line

“Be first in line,” is Hamilton’s fourth point.  Hamilton wisely pushes business owners to be the first in line for government assistance.  This is very good advice, as SBA and other funds are likely to be limited.

Tip #5 Get Back to the Basics

Fifth, Hamilton recommends, “Get back to the basics…starting with monomaniacal customer service.”  As always, customers, whether existing or new, are the lifeblood of your business.  You can’t afford to lose customers now and for this reason, you need to have a laser-like focus on customer service. 

Tip #6 Pivot your Product or Service 

Hamilton’s sixth tip is to “Pivot your product or service to new conditions.”  Small changes to your business can open up new streams of revenue.  Even if these streams of revenue are comparatively small, they could mean the difference between sink or swim!  Try to step back and look at your business with fresh eyes and strive to find ways to offer something new to your customers.  Whatever you offer should be based on your existing goods and services and not require a new, large expenditure.

The COVID-19 pandemic is obviously disruptive, but it won’t last forever.  Hamilton’s advice of focusing intensely on the next 90 days is sound advice.  You won’t regret looking for ways to safeguard your business for the next 3 months.

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Improving Your Telework Habits

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In her recent April 20th, 2020 Forbes article, “Three Keys to Engaged, Productive Telework Teams,” author Rajshree Agarwal, who is a professor of Strategy and Entrepreneurship, explored how to get the most out of telework.  This highly timely article covers some very important territory for many companies dealing with the COVID-19 pandemic.  Let’s explore Agarwal’s key points so that you can help your team get the most out of telework.

Agarwal notes that people may tend to shy away from sharing personal information and feelings while in the office.  But via video conferencing, the story can be different.  For this and other reasons, it is necessary for employers to keep in mind that the dynamic between you and your employees may be different when you use video conferencing.  This will also often be the case when your employees speak with one another. 

She prudently cautions business owners from taking a “business-as-usual” approach to the COVID-19 situation, as it can make them look both unnecessarily cold and out of touch with reality.  On the flip side, however, it is also important to not dwell on the negative aspects of the pandemic.  Offering some sense of normalcy during the COVID-19 pandemic is a smart move as well. 

How you use telework and video conferencing is, in part, about developing the correct balance.  On one hand, you’ll want to acknowledge that the situation is serious and must be addressed.  But on the other hand, you don’t want to dwell on the pandemic.  After all, not effectively handling the work at hand could undermine your business and cause other problems for both you and your employees. 

It is in everyone’s best interest to be smart, safe, and acknowledge the bizarreness of the current situation while striving to achieve business goals.  The keyword here is “balance.”  Agarwal states that “The combination of empathy and purpose unifies individuals, allowing team members to channel their efforts towards shared objectives and values.  This is the best antidote for anxiety.”

From Agarwal’s perspective, there are three keys to making telework effective: communication, socialization, and flexibility.  First, there has to be good communication.  For example, people can’t simply ignore one another’s emails because they are working virtually.  She points out that real-time meetings via Zoom or Skype can eliminate some communication issues, but not all. 

The second factor to consider is socialization.  As Agarwal points out “Engaged, productive teams also take time to socialize.”  Working from home alters the typical modes and methods of socialization, but virtual interactions can be used to help people form and develop their social networks. 

In short, socialization doesn’t have to end once telework begins.  Used judiciously, socializing, and the bonds it creates between co-workers can still continue. 

Agarwal’s third key is flexibility.  Flexibility is critical, as all team members must adjust to what, for some, may be a fairly radical restructuring of their day-to-day work experience.  Those who haven’t worked virtually before may find adjusting to be quite a challenge.  Management should strive to be more flexible during telework caused by the COVID-19 pandemic.  Trying to maintain the same top-down approach could prove to be problematic.

It goes without saying that telework presents challenges.  However, the challenges it represents are not insurmountable.  There are benefits to teleworking, and teams can use it to generate solutions that they might have not reached in the typical work environment.

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Don’t Fear Failure, Learn from It Instead

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Failure is rarely fun.  But it is also a key ingredient in success.  While failure can be painful, there is no doubting the fact that the lessons that come from failure can be powerful teachers that provide life-long lessons and even life-trajectory altering results.  Summed up another way, failure hurts.  But on occasion, not failing could hurt more, especially in the long run.

In her Inc. article, “Why Tons of Failure Is the Key to Success, According to Seth Godin,” author Sonia Thompson, CEO of Thompson Media Group, points out that most people “avoid failure like the plague.”  Instead, they spend their time trying to achieve perfection.  In the process of adopting this approach, people miss all kinds of opportunities because they are afraid of damaging their egos.  Embracing failure is a way to experience many “transformational benefits,” which would never be experienced without the lessons of failure.

Thompson points to the work of 18-time best-selling author Seth Godin who has written about how entrepreneurs who fail more often perform at a higher level.  She quotes Godin as follows, “The rule is simple.  The person who fails the most will win.  If I fail more than you do, I will win.  Because in order to keep failing, you’ve got to be good enough to keep playing.”  Godin continues that failure imparts a gift of sorts in that it teaches us how to distinguish between a good idea and a bad idea.

As Thompson notes, research supports the notion that if you want a breakthrough idea, you will need to “produce an enormous volume of ideas.”  Obviously, most ideas won’t work, but that isn’t the issue.  The issue is to work your way through the bad ideas to get to the winners.  Sure, it would be great to have nothing but winners.  But life and reality don’t work that way.  Failure should be seen more as a path forward than the end of the road.

Getting comfortable with failure, in Thompson’s view, is critically important.  She believes entrepreneurs should take steps that make them more comfortable with failure, such as detaching oneself from the results. 

It is vital to remember that you are not the work.  In contrast, the work is part of an ongoing process.  Getting good at something takes time, and there will be failures.  For this reason, entrepreneurs simply must embrace a “growth mindset.”  Don’t think of failure as failure, but instead as part of a learning process.  There is no denying that this approach will make you calmer and that, in turn, may help you make better decisions.

There will be failure in life.  There will be problems and there will be obstacles.  Much will happen that you can’t predict, manage or control, such as the COVID-19 outbreak.  The trick is to focus on what you can control and move forward without a paralyzing fear of failure.  Because in the end, failure may be one of your best tools.

Copyright: Business Brokerage Press

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How to Connect During a Crisis

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Small business owners are facing new challenges during this crisis.  Communicating with customers requires more focus and depth than ever before.  In Mat Zuker’s latest article for Forbes Magazine, he cites Jay Mandel who runs The Collective NYC, a marketing consulting team focusing on a customer’s experience, who underlines the importance of businesses to understand their mission statement and values in order to re-enforce marketing strategies. 

Information is Crucial.  Each customer purveying your business’s website needs to understand your hours of operation, any limitations to service and what is being done to ensure cleanliness.  Providing this information establishes to your customer your seriousness of precautions which will be appreciated during this time.

If your financial situation allows, focus on your employees, donate to charities or offer discounted or free products.  By marketing this information, your brand’s scope will bolster with the customer as well. 

Utilizing the Customer’s Time.  Most customers are adhering to social distancing guidelines put forth by their state and the federal government.  Now, more than ever, it is important to exhibit to your customers how your brand can be utilized beyond your brick and mortar.  Zuker cites how universities are beginning to offer free online classes and telecommunication companies are offering two months of free service to low-income families; King Arthur flour is promoting its library of comfort food recipes (yes, please!).  Thinking beyond your storefront to put your service or product into your customer’s virtual hands is important.

Remember to entertain.  By each passing day, customers are looking for new stimulation to help the time go by at home.  Movie companies are making the best of the situation by sending theatrical releases to online streaming services.  We don’t think it is necessary to always make your customers laugh, but it might be within your branding to aim for content geared towards warmth, humanity and empathy. 

The metric for engaging your customers is changing; moving beyond views and shares to quality feedback or social impact on your community.  Do not bite off more than you can chew.  Cited in Zuker’s article, Social Media Today warns of virtue signaling; meaning declaring a set of values, but not following through on the actual deeds. 

Also, this is a fantastic opportunity to consider your marketing strategies for when this crisis ends.  What will your business look like once you are able to open the doors?  How are you able to stay relevant with your competitors?  These are all questions needing answers, but today we must do our best to accomplish what is in front of us. 

Read Mat Zucker’s full article here: https://www.forbes.com/sites/matzucker/2020/04/01/content-in-a-crisiswhat-brands-can-deliver/

Copyright: Business Brokerage Press, Inc.

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IBBA and M&A Source Market Pulse Survey Report Predicts Major Changes

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The IBBA and M&A Source Market Pulse Survey Report for the fourth quarter of 2018 has a range of interesting insights.  The survey’s purpose is to provide an “accurate understanding of market conditions for businesses being sold in Main Street (values $0-$2MM) and the Lower Middle Market (values $2MM-$50MM).  This national survey was designed as a tool for business owners and their advisors and has the support of both the Pepperdine Private Capital Markets Projects and the Pepperdine Graziadio Business School.

One of the most striking facts to leap out of the report is the fact that a full one-third of advisors fully expect the strong market to end this year.  Overall, advisors are not optimistic that the current climate will continue through 2020.  In fact, advisors are encouraging sellers to consider placing their businesses on the market now, while the market is still strong.  This is according to Craig Everett, PhD and Assistant Professor of Finance and Director of the Pepperdine Private Capital Markets Project.

One fact from the report that could be overlooked is that only a mere 8% of advisors expect the current climate to last for 48 months or more.  Additionally, only 9% believe that the current climate will last between 24 to 48 months.  Perhaps most striking of all is the fact that 60% of advisors feel that the current climate will end within the next two years.

Business owners who are considering selling should be advised that almost two-thirds of advisors now feel that there will be a significant shift in the next two years.  Considering that it can take a year or more to sell a business, business owners would be wise to consider this important fact.

The report sites Neal Isaacs, Owner of VR Business Brokers of the Triangle who states, “Deals are taking longer in due diligence as buyers work hard to validate their investment and make sure that what they’re buying is worth the premium price today’s sellers are commanding.”

So, is now the time to sell?  Many experts feel that it is possible to lose a sizable amount of value if one waits too long to sell.  Even just a few months can make a huge difference in terms of perceived value and the ultimate sales price.  Working with a proven business broker is a key way to ensure that you are selling at the right time and secure the best possible price.

Copyright: Business Brokerage Press, Inc.

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5 M&A Myths and How to Deal with Them

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Where your money is concerned, myths can do damage.  A recent Divestopedia article from Tammie Miller entitled, Crazy M&A Myths You Need to Stop Believing Now, Miller explores 5 big M&A myths that can get you in trouble.  Miller points out that many of these myths are believed by CEOs, but that they have zero basis in reality.

Myth 1

The first major myth Miller explores is the idea that the “negotiating is over once you sign the LOI.”  The letter of intention is, of course, important. However, this is by no means the end of the negotiations and it is potentially dangerous to think otherwise.  The negotiations are not concluded until there is a purchasing agreement in place. As Miller points out, there is a great deal that can go wrong during the due diligence process.  For this reason, it is important to not see the LOI as the “end of the road.”

Myth 2

Another myth that Miller wants you to be aware of is that you don’t have to take a company’s debt as part of the purchase price.  Many business brokers, such as Miller, recommend that buyers don’t take seller paper.

Myth 3

A third myth that Miller explorers is a particularly dangerous one.  The idea that everyone who makes an offer has the money to follow through is, unfortunately, simply not true.  Oftentimes, people will make offers without securing the money to actually buy the business.  No doubt, this wastes everyone’s time.  As the business owner, it can derail your progress.  If you are not careful, it could actually prevent you from finding a qualified buyer.

Myth 4

Another myth is built around the notion that sellers don’t need a deal team in order to sell their business.  Again, this is another myth that has no real foundation in reality.  While it may be possible to sell your business without the assistance of an experienced M&A attorney or business broker, the odds are excellent that doing so will come at a price.  According to Miller, those working with an investment banker or business broker can expect, on average, 20% more transaction value!

Additionally, there are other dangers in not having a deal team in place.  A business broker can handle many of the time-consuming aspects of selling a business, so that you can keep running your business.  It is not uncommon for business owners to get stretched too thin while trying to both run and sell a business and this can ultimately harm its value.

Myth 5

Miller’s final myth to consider is that you must sell your entire business.  It is true that most buyers will want to buy 100% of a business, but a minority ownership position is still an option.  There are many reasons to consider selling a minority stake, so don’t assume that selling your business is an “all or nothing” affair.

Ultimately, Miller lays out an exceptional case for the importance of working with business brokers when selling or buying a business.  Business brokers can help you avoid myths.  In the end, they know the lay of the land.

Copyright: Business Brokerage Press, Inc.

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10 Questions Everyone Should Ask Before Signing on the Dotted Line

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Before buying any business, a seller must ask questions, lots of questions.  If there is ever a time where one should not be shy, it is when buying a business.  In a recent article from Entrepreneur magazine entitled, “10 Questions You Must Ask Before Buying a Business”, author Jan Porter explores 10 of the single most important questions prospective buyers should be asking before signing on the dotted line.   She points out to remember that “there are no stupid questions.”

The first question highlighted in this article is “What are your biggest challenges right now?”  The fact is this is one of the single most prudent questions one could ask.  If you want to reduce potential surprises, then ask this question.

“What would you have done differently?” is another question that can lead to great insights.  Every business owner should be an expert regarding his or her own business.  It only makes sense to tap into that expertise when one has the opportunity.  The answers to this question may also illuminate areas of potential growth.

How a seller arrives at his or her asking price can reveal a great deal.  Having to defend and outline why a business is worth a given price is a great way to determine whether or not the asking price is fair.  In other words, a seller should be able to clearly defend the financials.

Porter’s fourth question is, “If you can’t sell, what will you do instead?”  The answer to this question can give you insight into just how much bargaining power you may have.

A business’ financials couldn’t be any more important and will play a key role during due diligence.  The question, “How will you document the financials of the business?” is key and should be asked and answered very early in the process.  A clear paper trail is essential.

Buying a business isn’t all about the business or its owner.  At first glance, this may sound like a strange statement, but the simple fact is that a business has to be a good fit for its buyer.  That is why, Porter’s recommended question, “What skills or qualities do I need to run this business effectively?” couldn’t be any more important.  A prospective buyer must be a good fit for a business or otherwise failure could result.

Now, here is a big question: “Do you have any past, pending or potential lawsuits?”  Knowing whether or not you could be buying future headaches is clearly of enormous importance.

Porter believes that other key questions include: “How well documented are the procedures of the business?” and “How much does your business depend on a key customer or vendor?” as well as “What will employees do after the sale?”

When it comes to buying a business, questions are your friend.  The more questions you ask, the more information you’ll have.  The author quotes an experienced business owner who noted, “The more questions you ask, the less risk there will be.”

Business brokers are experts at knowing what kinds of questions to ask and when to ask them.  This will help you obtain the right information so that you can ultimately make the best possible decision.

Copyright: Business Brokerage Press, Inc.

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A Step by Step Overview of the First Time Buyer Process

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A recent article on Businessbroker.net entitled, First Time Buyer Processes by business broker Pat Jones explores the process of buying a business in a precise step-by-step fashion.  Jones notes that there are many reasons that people buy businesses including the desire to be one’s own boss.  However, he is also quick to point out that buyers should refrain from buying a business that they simply don’t like.  In the quest for profits, many prospective owners may opt to do this, but it could ultimately lead to failure.

Step One – Information Gathering

For Jones, there are seven steps in the business buying process.  At the top of the list is to gather information on businesses so that one has an idea of what kind of businesses are appealing.

Step Two – Your Broker

The second key step is to begin working with a business broker.  This point makes tremendous sense; after all, those new to the business buying process will benefit greatly from working with a guide with so much experience.  Business brokers can gain access to information that prospective business owners simply cannot.

Step Three – Confidentiality and Questions

The third step in the process is to sign a confidentiality agreement so that you can learn more about a business that you find interesting.  Once you have the businesses marketing package, you’ll want to have your broker schedule an appointment with the seller. It is vitally important that you prepare a list of questions on a range of topics.  There is much more to buying a business than the final price tag.  By asking the right questions, you’ll be able to learn more about the business and its long-term potential.

Step Four – Evaluation

In the fourth step of the business buying process, you’ll want to evaluate all the information that you have received from the seller.  Once again, a business broker can be simply invaluable, thanks to years of hands-on experience, he or she will know how to evaluate a seller’s information.

Step Five – The Decision

In the fifth step, you’ll need to decide whether or not you are making an offer.  If you are making an offer, you will, of course, want it to be written and include contingencies.

If your offer is accepted, then the process of due diligence begins.  During due diligence, you and your business broker will look at everything from financial statements to tax returns.  You will evaluate the company’s assets.  Again business brokers are experts at the due diligence process.

Buying a business is an enormous commitment.  Making certain that you’ve selected the right business for you is one of the most critical decisions of your life.  Having as much competent and experienced help as possible is of paramount importance.

Copyright: Business Brokerage Press, Inc.

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Do You Really Want to Sell Your Company?

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Sellers have to ask this question and give it serious thought prior to making the decision to sell. In too many instances, sellers get to the proverbial altar and then back down the aisle. In most cases, this happens because the seller’s decision to sell has not been considered carefully enough.

There are the obvious event-driven reasons such as failing health, partnership, marital issues or because the business is going downhill. In cases such as these, business owners generally don’t have a lot of options. Selling the company is the easiest and most obvious one.

In too many other cases, the owner claims retirement, “burn-out,” or some other reason, none of which is necessarily a permanent state of things. Take the example of the owner of a company who is also the founder, and after a lot of hard work and probably years of financial hardship on his part, the company is now quite successful. It is, as they say, the owner’s “baby.” The first question that needs to be asked is: Do I really want to sell? The second question is: If so, why? And the third is:  What am I going to do after the company is sold? These questions involve not only business decisions, but important emotional issues as well.

Attempts to formulate answers should not be made until the owner has discussed these questions with family and personal professional advisors. There are books on exit strategies and consulting firms that deal with these issues. A professional business intermediary is also someone that has experience in this area and can provide a good idea of current pricing issues and market conditions.