I sold 3 companies for $50,000,000+ by age 29…[7 tips to sell your business for millions]
Summary
- As the co-CEO of acquisition.com, my portfolio businesses generate about $85 million a year in revenue.
- Recently, we sold two of our main businesses in the last 10 days, which was a hectic but a valuable experience.
- In the past year, we sold three businesses: a software company, a physical products business, and a service business to focus on our holding company.
- It's crucial to build with a sellable business in mind; this realization came after dismissing the idea when first starting out.
- Selling a business requires preparation; it took us two years to make our service business a truly sellable enterprise.
- Understanding financial performance is vital. High revenue and good margins demonstrate strong sales abilities and potential for investment recovery.
- The growth potential must be evident for a buyer; sell when the business is thriving, not when it's struggling or no longer interesting to you.
- Diversification of the revenue stream, both in terms of clients and sales channels, minimizes the buyer's risk and increases business appeal.
- Cash flow importance: Healthy net free cash flow indicates that a business can finance its growth and service potential debt, making it attractive to buyers.
- Recurring revenue suggests business stability and prospective long-term success, making your business a safer investment.
- A strong, unique value proposition sets you apart from competitors, whether it's through product distinction, pricing strategies, or marketing.
- A robust and autonomous team ensures the business doesn't rely solely on its founders, making it a stable and sellable asset.
- To prepare for a future sale, even if not imminent, focus on enhancing the seven areas: financial performance, growth potential, revenue concentration, cash flow, recurring revenue, a unique value proposition, and team strength.
Video
How To Take Action
I would suggest implementing these actions to build a sellable business:
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Track Finances: Start by understanding your financial performance. Focus on increasing revenue and maintaining good profit margins. This shows you're good at selling and assures potential buyers they can get their investment back.
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Plan for Growth: Leave room for potential growth in your business. Aim to sell when it's doing well, rather than when you're no longer interested. This attracts buyers looking for a successful and growing business.
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Diversify Revenue: Make sure your income doesn't depend on just a few clients or one sale channel. Spread out where your money comes from by finding more clients and using different ways to sell, like online and local stores. That way, one change won't hurt your business too much.
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Improve Cash Flow: Make sure your business has healthy cash flow. This shows it can pay for its growth and handle debts well. Buyers like businesses that don't need extra money to keep going.
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Increase Recurring Revenue: If you can, set up ways to make money regularly, like subscriptions or repeat services. This makes your business seem stable and a safe bet for the long term.
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Stand Out: Have something special that sets you apart, like unique products, good prices, or cool ads. This makes your business more appealing to buyers.
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Build a Strong Team: Make sure your business can run without you. Hire good people and train them well. If your business works great even when you're not there, it's more likely to sell.
Remember to always think about these things, even if selling isn't your plan right now. Next time you have a business meeting, ask yourself how you can make improvements in these areas. It will help you create a business that's valuable and can be sold if you decide to.
Quotes
"We did all this because we want to consolidate down to just our holding company acquisition.com"
– Leila Hormozi
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"Revenue is important and revenue growth is important because it shows that you have the ability to sell"
– Leila Hormozi
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"The best time to sell is not when you want to sell, it's often when you don't want to sell"
– Leila Hormozi
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"Net free cash flow is the number one metric that he always measured"
– Leila Hormozi
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"Having a unique value proposition so what differentiates you from your competitors"
– Leila Hormozi
