When Is The Best Time to Sell a Business: Age or Market Based

Deciding when to sell your business is not a straight forward process. A business owner might say, "When I am 65, I will retire and sell the business." Sadly, there are many business owners that never make it to 65 and have to sell their company long before they or their business are ready.

Age-Based Selling

Basing your decision on selling when you are a certain age can drastically affect the price that you get for the business.

Consider this scenario. A small business owner decided she wanted to sell after 30 years of working her business. Sadly, at 25 years, she had health issues and struggled to work in her business for the next 5 years. Slowly the revenues declined as she physically could not lead the business and her desire to run the business waned. Sadly, at the 30 year mark, her business had a very little value and ended up just closing the business after 30 years.

Had she planned for her exit, she would have seen the signs and decided to sell after 25 years instead of waiting till 30 years when the business had no value.

Unfortunately, no one knows what will happen tomorrow and having a plan for selling will allow you to make a quick decision to sell before a company is out of business.

A Plan for Selling Your Business

In order to maximize the sales price of your business, here are 5 things you can do to prepare.

Decide what "triggers" you to sell? Every business has a life cycle. Ideally to sell your business for the highest price, you will want to sell when the business is at the peak of its life cycle. This is often when business owners say, "I am making more money that I have ever made." It is also the time when most owners are loving their businesses the most. This is the time to sell that will maximize the selling price. If building your business to sell for the maximum price is important to you, then you might consider this strategy.

Triggers that show you are at the peak of the life cycle include:

Few competitors

Thriving economic market

Highest profits

Fast growth

Prepare your business as if you were going to sell tomorrow. Once you recognize the trigger and decide to sell, you will need three to five years of tax returns. If you have not been keeping "clean" books you do not have time to clean them up. By "clean" books I mean removing all non-essential write-offs, like the family trip to France every year to order new products. This can lower the value of your business and to maximize your selling price, this needs to be removed.

This also means, have a growth plan and active marketing plan, all things buyers want to see, as well as secure your top employees. If you know we will sell, put retention plans in place so that your top talent will be staying with the business.

Consulting with a business broker early on can better prepare you for how to prepare your business for selling.

Actively watch the market environment to spot indicators to sell. Many business missed the "peak: back in 2007 and watched the value of their business decline through the Great Recession. Determine which factors will indicate to you the peak and actively look for the indicators. Holding on too long will reduce the value of your business and reduce your net.

Every Start-Up Business Needs A Brand Logo

In Part 1, "Why Branding Is Good For A Start-up Business", we looked at why branding is important to new businesses and how you can determine your brand values and a brand personality. Now we're going to look at how to develop a logo and strapline that fits your brand and business. A logo doesn't have to cost a fortune and once you have designed it you need to use it consistently on your website, on brochures, catalogues, business cards, t-shirts, posters, banners, social media pages. You could use your logo more or less anywhere. And it should be!

If you know what you are doing you can do it yourself. There are two things to be aware of if you decide to create your own logo:

One you need a second opinion and, if possible, 50 opinions. It is hard to be objective about a logo you created, and canvassing honest opinions will reveal aspects about the logo which are easily missed.

The second is you need it to be of professional quality. This means that a few clip art pictures and Microsoft Paint won't cut it. Your products and services are of a professional standard and your logo should be too.

I strongly advise you to get a professional graphic designer to design your logo, as it will save you time in the long run, and time in business is money. The better graphic designers will be able to visualise concepts and bring that to your logo, and this will give your business a professional touch. A graphic designer will also be able to design the logo in various shapes. Some social media accounts require rectangular shaped logos, while others require squares. Graphic designers can reshape a logo without losing the feel.

Logo Resources

As I mentioned, there are a number of websites where you can hire a freelance graphic designer to produce a professional quality logo for your business. When you give the designer a brief, make sure you incorporate your brand values and personality.

Here are a few good ones:

Peopleperhour.com features 'hourlies' where good graphic designers can be found. The logo for our Facebook page was purchased here for just £20.

Fiverr.com is a vast collection of people offering services of one kind or another that start at $5. The services range is vast and imaginative, and some of the services feature graphic design. Worth a look.

Elance has a design section, and currently it is free to post a job ad.

Freelancer.com works in a similar fashion to Elance.

99designs.co.uk is an interesting proposition. If your budget is at the higher end, you can run a competition where you can cite a brief about your logo, and a high number of graphic designers will submit samples. The minimum price for a logo competition is £199. The site advises the higher the budget the higher the quality and the more entrants will compete for the prize.

Strapline (Or Tagline)

A strapline is another way of introducing branding. The idea of a strapline is it implants itself in a person's mind, so that when they hear the words they think of your brand. Ideally, it should be connected with what you do and should be shaped using your brand values and personality. The words 'just do it' are synonymous with Nike, and are connected with exercise, and for a sporting clothing business it makes perfect sense. 'Every little helps' is probably making you think of Tesco. The strapline for this website is 'empowering profitable work from home', which is in effect the aim of the site and the business.

Looking at these three examples, you can see straplines are short statements that say something about their respective businesses. Your strapline should do the same. Like the logo, play around with a few straplines and canvass opinion. In the end choosing a strapline will probably come down to a feeling. If we look at our examples above, Nike and Tesco have taken an indirect route to branding, as they do not directly mention the products they sell. Our site has laid it down in a simple fashion. All three examples get the point across.

How The Brand Supports Your Business

The branding element works in the background. It makes your business recognisable and unique, and hopefully as your business grows so will the strength of the brand. There is no point expecting brand loyalty, i.e. people coming to use your products and services because they love your brand, until you have successes under your belt.

Take Apple, for example. There are people who seem addicted to their products. This did not happen overnight, however, and it was only when it launched the iPod that the company became a global brand.

With this in mind, it is important you simply deliver a good service and product, and let the branding element play out by itself. At the end of the day the quality of what you can deliver is how you will be judged regardless of how wonderful your logo looks.

One of the strengths of branding is that it promotes trust in your business, but this only works if it is underpinned by how well your business performs.

Promoting Your Brand

To promote the brand, and to associate your business with your brand, it is important that the logo and strapline are visible at every point where a potential customer or client can interact with your business.

To that end:

Ensure the logo and strapline is on any documentation that goes to potential and existing customers and clients.

Ensure your business website and social media accounts also have your logo and strapline. You may want to read our article on Promoting Your Start-up Business By Using Social Media for guidance.

One of the beautiful things about branding is it supports all of your offline and online marketing efforts, and for the most part people do not realise it.

Standing Out From The Crowd

The chances are there are competitors in your industry and as a competitor in your market, your logo and strapline will help to establish your business in the heads of potential customers and clients. This is what branding was invented for, to put your business in the head of the next customer and client, and to help them trust your brand. So if a potential customer can remember you, there is more of a chance they will contact you.

Branding And Trust

Trust is one of the key points of branding, and providing your services and products of a high quality, over time your customer and client base will connect the dots so that your brand is one that can be relied on. If we take Apple as an example, it has a reputation for pretty technology that does an excellent job. When Apple releases a new product, people are already thinking the product will be pretty and it will do an excellent job.

Though your business may be worlds away from Apple, the idea that you are dependable, reliable and do a good job are what you want your customers and clients to take away after you have delivered a service or provided a product for them. It is worth noting, however, that should Apple release a few products that customers encounter problems with, the brand could easily pick up negative connotations that would greatly damage the company's profit margins.

Final Thoughts

Branding is important at all levels of business, but it should not take priority over doing a good job. This will make or break your start-up, so once the basics are in place, forget about branding and concentrate on doing the job well.

If you are thinking about Starting Your Own Business, you will find excellent resources on our site. Please look around and share articles on your social media accounts. Sign up to our newsletter so you are always up to date with the best ideas, concepts, and best practices for running a business.

A Profitable Business Idea and Marketing Research

The task of coming up with a profitable business idea can be very daunting. Setting up your own business requires you to think rationally and thoroughly so as to plan and make key financial decisions. You should have a written business plan. There are many already existing business opportunities that you can choose from. Therefore, being an entrepreneur doesn't necessarily imply that you Must come up with a new unique business idea.

There are many advantages of choosing an already existing business to start your business from. The main advantage is that the existing business opportunity has been already in the market therefore its products are already selling. You'll not need to spend a lot of money in marketing the products because they have customers who already exist. Your task is to find the best strategic location where you'll locate your business and also raising the amount of capital required to start and run the business.

You must ensure that you meet all the requirements including legal procedures before you start operating your own business to avoid breaking the law and being penalized. You should bear in mind that starting a business by using or improving an already existing business doesn't imply that it will be profitable. It is either that it will be making profits each year or hardly making any profits.

It is upon you to make a decision whether to start from scratch by coming up with your new profitable business idea or look for an existing business idea to adopt. It takes a great idea for one to come up with a new business idea that is profitable. However, a business idea that is profitable in the present time cannot remain to be profitable throughout. It will reach a time that it will face stiff competition as a result of new technology, new superior substitute products or other factors that will make its profits to decline.

As an entrepreneur, you have to be aggressive and innovative. Innovation of entrepreneurs doesn't necessarily imply invention of a product but it also implies coming up with new ways of reducing costs and improving the existing products. You should take risks by investing in profitable business opportunities you come across.

Do not focus on profits alone if you want your business to succeed but you should be customer oriented. When you're customer oriented you'll satisfy the tastes, preferences and expectations of the customers. You should not operate the same business throughout without improving the quality of your products and finding out from customers what they want your products to do for them.

What You Should Know About Making Profits

You should have a clear view when it comes to making profits before you start your business. Your business will fail if you miss to apply the objective of earning profits. Entrepreneurs are not supposed to focus on the objective of maximizing profits only. Focusing solely to maximize profits will lead an entrepreneur to charge a higher price for his products, exploit employees or produce products that are of low quality. An entrepreneur who solely wants to maximize profits will never make his business to be successful.

The enterprise that is coldly and solely motivated by the making of money seldom fares well in the long run~By Apply.

However, this is not to say that entrepreneurs should not make profits. Entrepreneurs should focus in satisfying customers and making adequate profits to cover all costs incurred i.e. making adequate profit to enable the survival of the business.

The problem of any business is not maximization of profit but the achievement of sufficient profit to cover the risks of economic activity and thus to avoid loss. But whether it is the motive of business to maximize profit is debatable. However, it is an absolute necessary for the business enterprise to earn at least the profit required to cover its own future risks and enable it to stay in business and maintain intact the wealth producing capacity of its resources~By Prof. Peter Ferdinand Drucker, the world-renowned consultant of management.

Marketing Research

Many upcoming entrepreneurs face the problem of product failure. You should keep on changing your marketing strategies and improving your products so as to satisfy your customers fully. You should not guesswork that the products you're intending to sell will be purchased. You should find out facts in the market if your products will be purchased.

Nowadays, marketing research is vital. Why? It is because consumers know what they need and want thus you should find out from them by conducting a marketing survey. Marketing research will also help you to know if the business you want to start will be profitable. To avoid the risk of your business failing, you should find out;

1.) If the products you're intending to sell are needed in the market.

2.) The place where most potential customers are in order to locate your business near them.

3.) The expectations of potential buyers. Find out from potential buyers what they want your products to do for them.

4.) The purchasing power of the customers so as to make your products affordable. This will help you to know the quantities you should pack your products. Customers with a higher purchasing power will have the option of buying the products that are packed in large quantities e.g. 1Kg, 5kgs, 10kgs, 20kgs etc. On the other hand, customers with low purchasing power will have the option of purchasing your products that are packed in small quantities e.g. 50gm, 100gm, 200gm, 500gm.

5.) If the business you intend to start has competition so as to find your own unique selling proposition to beat your competitors.

6.) The size of the market for your product so as to know how much products you'll produce and the amount of capital to invest.

You should take a step in widening your horizons and in taking your time to search for business opportunities. Read widely business magazines, business management books and other business publications. You should make your business to be the best choice in the market by satisfying your customers, gain loyalty of your customers.

Traits of a Successful Small Business Owner

There is no secret formula in this world which will make you the most successful small business owner. Every business has a different nature and different products or services to offer and that is why the success of a small business as a result of its business strategies. But it is the business owners who make those strategies and execute them to achieve the business goals. Some traits in personality and character are needed in a business owner on a very basic level. The entrepreneurs with the best professional and personal traits will prove to be the most successful. In this article I will share with you the characteristics and traits of small businesses owners.

Believe In What You Are Doing

If you don't believe in your business then why would your customers believe in it? Think of a boy who has always wanted to be a choreographer and he is forced to study mechanical engineering. He will never be good at being an engineer because his personal interest lies in creating and directing professional dancers. Same is the case with business. So always chose own a business which has your personal interest in it. Then take it seriously. If you would take it for granted, very soon your interest in it will vanish. You will not like what you are doing and you will lose the motivation to keep running the business. So believe in what you are doing and act on your passions.

Planning and Management

Business strategies really make a difference. If you want to ensure the success of your small business then you need to plan your every move. Analyze every situation and do the necessary research to gather facts. Compile those facts and make calculated decision on the basis of it. Don't rush into making business decision because every decision has a perfect impact on your business. Also make it sure that your business is excellent managed and organized. Keep your eye on the prize. Whether it is financial management or general management, always be proactive and don't let yourself or others distract you from your goal.

Great Reputation

Would you ever buy from a company who has a reputation that they never deliver the product on time? The answer is no, because that business broke the trust of its customers by not delivering the product on time. Earn the trust of your customers and as a reward your reputation will increase. Don't promise something you cannot deliver and always have principles for yourself and your company. Reputation is not something that you can buy. It's intangible and you have to earn it. Don't let anything hurt your personal or company's reputation as it will result in serious consequences for your business.

Negotiate Effectively

A business man without effective negotiation skills is like a pilot without a plane. But there is an important thing to understand. If you are always able to win in a business negotiation, that doesn't mean that you are good at it. It could mean that you might be losing business in the long run. You have to master your negotiation skills in such a way that you should be able to create a win-win situation for both parties. If everybody would feel that they have got something after that negotiation then you would have good business relations with your customers.

Promote Your Business

Get involved with people and the community that is beneficial for your business. Grab attention and never lose a chance to introduce and promote your business. Just make it sure that you don't waste your time and money. Your small business may become insolvent if you try to raise awareness about your company by spending money. Try to build relationships. Would you like to do business with a person you just met or someone you have established a history with? People like to do business with those who they know. So, build contacts and promote your business in a very effective and inexpensive way.

Be Collaborative

Individual performance can never match team work. You should be able to work with your team to achieve the goals of your business. It is a very important trait as it ensures team effort, which eventually leads to the success of a small business. You should know that you cannot do everything on your own. So intelligently delegate tasks to your team and get them done in the most effective and efficient way. Don't be a control freak. Motivate your staff and have a great relationship with them. Enable your staffs to make decisions, contribute ideas, and work on project that interest them. As a result, the performance and productivity of your team will increase and support your path to success.

Honest and Respectful

You should be honest and fair in your business dealings. Always be polite and respectful to the people you deal with. Both of these characteristics should be a permanent part of your personal and professional life. People really appreciate these traits as they increase their trust in your business. Be tactful and never take your customers lightly.

Dedicated and Hard Working

You should not be the kind of person who runs away from work and just builds castles in the air. It is all right to dream about success but success can only be achieved through hard work. Moreover, be dedicated to your work and stay focused. Don't settle for anything less. Put your heart into your work and never stop until you are done with it.

In the end, I would like to make a special note. Occasionally you plan your business perfectly and have great personal and professional traits but still the business remains unable to reach its goals.

Sometimes it is simply having someone else look at your business with objectivity and creativity to identify the areas that need to change. Don't be afraid or intimidated to ask for help.