If you had to sell your business today, how much would you be able to get? Who would you sell it to, and how close to your asking price would it get in its current state?”
Not sure about your answers? Our guest today will help you get a lot more clarity around those questions, and share the tools he’s used to buy and sell more than 50 businesses per year.
On today’s podcast, Ace Chapman of AceChapman.com will teach you how to prepare for your exit and the most common pitfalls to avoid prior to and during the exit process.
Let’s dive in!
03:33 - How Ace started, his brief background, and what he does on a day-to-day basis.
06:05 - How many deals Ace looks at per month and how many has he closed so far.
08:48 - What to look for when looking for a business to invest in.
11:22 - How productized business owners can make their service business more valuable.
15:10 - Where to start when it comes to creating your SOP assets.
15:47 - The single question that you need to ask potential buyers that will increase your business value.
17:20 - Create value out of nowhere by including these pointers in your SOP.
17:50 - Think through your business and build the systems around it.
21:11 - The biggest mistake that service businesses make.
22:00 - What things business owners should think about that will create more value when they exit.
Think of your service business as a product and as a product, you should always find ways to position it better with your target audience and make it more attractive to potential investors.
Understand all your business assets - good and bad. Make good-performing assets more valuable by turning them into a stand-alone business and find ways to transform expenses into assets.
Exits are one of the biggest sources of wealth creation which is why it’s important to have a solid exit plan even if you don’t intend to sell it right away.
Ace’s Business Model Breakdown:
Big Idea: Plan now because the Money Is In The Exit
Selling your business might be the last thing you thought about when you started your business but it should be one of the first things you plan for even if you have no intention of selling. Why? Because a good exit could generate a lot of revenue for you if you plan it out correctly. In most cases the largest cash injection many entrepreneurs experience.
For service businesses, creating a system that generates value for the owners (immediate cash flow) and consistent results for your clients will attract a much higher multiple and make it much easier for you to manage on a daily basis. Over time you build an asset and will have the opportunity to build towards a substantial exit.
Thinking Time + Action:
On a scale of 1-10, how ready is your business for an exit if you decided to sell it right now?
If you had to sell your productized service today, what would your ideal buyer look like? Do you think they are willing to pay a premium for your business?
List out the weak points in your business right now and think about how you can turn them into an asset that will add value to your business.
Next week, we will have a value-packed conversation with Bruce Merril of Cleverly where we will Breakdown their lead gen service on Linkedin and show you exactly how they’ve designed a very high-margin and high-value offering while focusing on their strengths.
See you next week!
💡Thinking Time Chief @Productized Services