I sold my company for $46.2million. Here’s How..

Summary

• I learned the hard way that it's crucial to have the option to sell your business, even if you don't want to right now. Your business today could be the stepping stone to what you really want tomorrow.

• Growth potential is key. It shows buyers that your business can expand and isn't yet maxed out. Sell when your business is thriving, not when you're desperate to get out.

• Solve internal business pain, like lack of leadership, before considering a sale. This increases the business's stability and makes it more attractive to potential buyers.

• A unique value proposition sets you apart from the competition. Find your edge through price, product, or promotion to build a strong defense against competitors.

• Diversification of revenue is important. Relying on too few clients or a single product can scare off buyers. Aim to have multiple products and diverse revenue streams.

• Positive cash flow is vital. It tells buyers they won't have to pump money into the business post-purchase. Manage resources well and ensure your business can sustain itself financially.

• Recurring revenue provides predictability. Create stable income through subscriptions or long-term contracts to appeal to buyers and make strategic business decisions easier.

• Strong financial performance with good profit margins makes your business an enticing investment. Know what impacts your margins and work to improve them for solid financial health.

• The strength of your team is critical. Buyers want a business that runs without the founder. Aim for a team that not only maintains but grows the business in your absence.

• Patience is an undervalued yet essential skill in building a business. It took me years to ready my business for sale, but having that option changed my life. Focus on these components now to keep future opportunities open.

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How To Take Action

I suggest starting by ensuring your business has the potential to grow. This means identifying ways to expand your service or product offerings. Ask yourself, "What new markets can I explore?" or "What additional value can I offer my existing customers?" Quick wins like these can be both cost-effective and immediately impactful.

Another key point is to build and articulate a unique value proposition. What makes your business different from the competition? Focus on something simple that sets you apart, like a unique feature of your product, a special pricing strategy, or a creative marketing approach. This uniqueness will act like a moat, protecting your business against competitors.

Also, make sure your business isn't relying too much on one or two customers or a single product. This can be risky and may scare off potential investors or buyers. Think about introducing new products or services that complement your existing ones to diversify your revenue streams and stabilize your business.

Managing cash flow is essential. Keep a close eye on what's coming in and going out. Positive cash flow assures potential buyers they won't have to invest additional money post-purchase. Focus on financial discipline and avoid unnecessary expenses.

Consider generating recurring revenue. Think about how you can offer subscriptions or long-term contracts. Reliable, predictable income is very appealing to buyers and can stabilize your business operations.

Lastly, invest in your team. Strive to create a business that operates smoothly without you. This will not only give you peace of mind but will also make your business more attractive to potential buyers down the road.

Quotes

"Your business doesn't need to be perfect; it just needs potential."

– Leila Hormozi

"The best time to sell your business is when you don't want to sell it."

– Leila Hormozi

"A stable business is one that isn't overly reliant on anything."

– Leila Hormozi

"Having the mentality that because we have more money, we should spend more money, is very bad."

– Leila Hormozi

"The most undervalued skill when it comes to building a business is patience."

– Leila Hormozi