CEO Advisor Newsletter January 2018
7 Key Points for Successfully Selling Your Business
Receiving the proper advice on the sale process, maximizing the sale price and getting the deal done are critical, and are comprised of hundreds of small yet very important steps.
CEO Advisor, Inc. specializes in mergers and acquisitions (M&A) for small and mid-size companies with 34 years of M&A experience. Here are some important tips if you are considering selling your business in the near future:
* Business ValuationUnderstand what the realistic value of your business is today and the varying ways a deal can get done. Make sure you understand the key components of any initial offer. Both buyer and seller need to understand what the offer is comprised of (cash, assets, stock, deferred compensation, earn out, etc.). Both sides also need to understand the details of any protections around working capital, the treatment of surplus cash and balance sheet items, such as Account Receivables.
* Structure the Sale to Protect Your Business. Carefully qualify who you engage with in the sale process and only deal with acquirers you determine are serious and have the funds to close. You should only release information about your business that would be appropriate as part of the sale process. It helps both sides if information provided is organized, easy to understand, simple to interpret and supports the objectives of the sale process. A business/M&A advisor is critical to prepare and communicate the right information during the deal to maximize your value and to ensure the deal gets done.
* Get to the Offer Stage QuicklyWhether buying or selling a business, a well drafted offer letter in the form of a non-binding Letter of Intent is critical and provides a platform from which to proceed. It's in no one's interest to put a huge amount of effort and resources into a business sale before both parties can agree on an offer that is clear, understandable and that represents a good probability of closing. Negotiate the offer in reasonable terms and do not "spook" the buyer with misaligned statements or demands. This is a critical aspect of the deal and a business/M&A advisor such as CEO Advisor, Inc. can benefit you in the hundreds of thousands or even millions of dollars.
* Manage Expectations and Be Prepared For Due DiligenceUnderstand the other party's position. This is key in your negotiations with the buyer and successfully getting through the due diligence process. Do not provide information prior to an offer that would typically be information provided in the due diligence phase. When qualifying a buyer, do your research and consider the merits of bringing in additional potential buyers. In all cases, be ready for the due diligence process by preparing and organizing several months prior to selling in order to maximize your company's value and enhance the probability of the deal closing. Most importantly, have your financials, accounting and customer contracts in impeccable order. A business/M&A advisor is extremely valuable in preparing you for a sale, not just during the sale process.
* Determine Your Role in the FutureNegotiate your role and compensation fairly early on in the process before you are too deeply vested in time and resources. Far too often acquiring companies will push this off until it is too late for you to strike a favorable compensation plan. You can make a substantial amount of money after the sale, and your involvement in the business for a period of time is critical to make the sale happen. A key part of the process is understanding the other side's hot buttons, and structuring relationships so that both sides have incentives to deliver after the business sale is completed. This is an especially critical step where a business/M&A advisor can negotiate on your behalf where it will be extremely awkward for you to push this aspect of the deal on your own.
* Hit Your Targets Along the WayIt is extremely important for both sides if the business for sale has a record of hitting, and continues to hit its targets. Not managing to hit your sales and profit targets at a key point in the sale process is a common reason for business sales floundering or falling out all together. Your business isn't sold until the closing occurs and you never want to create concern or cause your buyer to walk.
* Keep the Sale Process on TrackThe process of selling a business can absorb more time and resources than you realize, resulting in high costs and you being distracted from your business. Be very clear early on how the selling process should unfold and make sure you are delivering on your side. The process of selling a business can, itself, represent the initial steps in a trust building exercise which helps as you enter negotiations. Keep on timelines and don't abandon them at any point. Instill deadlines, if needed, lock in a closing date as soon as the due diligence process is complete, and make sure the legal documents clearly reflect the Letter of Intent you signed up front.
Contact Mark Hartsell, MBA, President of CEO Advisor, Inc. at (949) 629-2520, by email at MHartsell@CEOAdvisor.com or visit us at www.CEOAdvisor.com for more information.
12 Ways to Increase Sales in the 2018
Below are 12 critical ways to enhance sales performance and increase sales in 2018:
1. Sales GoalsSet monthly Sales Goals at the beginning of the year and review your Sales Goals at least monthly at your weekly sales meetings. Motivate your sales team by focusing on a quarterly sales bonus in your Sales Compensation Plan as a key factor in improving sales performance.
2. Sales TrainingSales process and closing skills must be at the center of your sales team's culture and training. Document and review your sales process in sales meetings and role play to improve your sales techniques.
3. Sales PipelineA high level of sales activity and a strong sales pipeline with qualified prospects is vital to your success. Train your sales team to seek out qualified prospects with a need, urgency and a budget. By focusing on qualified prospects only, you will increase sales substantially.
4. Post MortemTake time to learn how to improve sales when you lose out on a sales prospect. Also, take time to learn something when you win a sale. That knowledge is power. You need that information if you expect to improve your sales teams' performance. Input this information into your CRM and take ten minutes at weekly sales meetings to recap lost and won sales opportunities.
5. Sales vs. ServiceBe very aware of how much time your salespeople spend on follow-up customer service issues versus time selling new customers. Sales will increase when your salespeople focus their time on doing what they do best...selling.
6. Sales MetricsYou need to focus on a range of sales metrics: daily sales calls, weekly appointments, monthly proposal presentations and sales goals vs. actual sales and more. Holding your salespeople accountable is a critical driver of sales. Focus on the above and you'll increase sales performance substantially.
7. Sales Presentations and Closing DealsAll salespeople should be able to recite your Elevator Pitch and fluidly present your sales Power Point presentation. Each salesperson should properly and consistently conduct discovery meetings, sales presentations, proposal presentations and close deals. Role play at sales meetings on a regular basis to perfect the sales process, sales presentations and closing techniques.
8. Overcoming ObjectionsYour sales team should be supplied with sharp answers to the most common sales objections they face every day. Overcoming objections can be the crown jewel of closing sales, so cover these in your sales meetings and before closing meetings with prospects.
9. Professional TrainerMost "professional" salespeople have some sales experience but have never had professional sales training. Improve sales by providing professional sales training to all sales reps on-going. It is the constant tweaking of the golf swing that makes a great golfer.
10. ReferralsReferrals improve sales and reduce the sales cycle so emphasize them in all sales meetings. Set monthly goals for referrals by sales rep. and track the goals consistently.
11. Sales ToolsMake sure your sales team has all the necessary tools to maximize sales, including brochures, sales presentations, customer lists, testimonials, a CRM (Customer Relationship Management software) and other sales materials.
12. Effective Use of CRMTrain your sales team to properly use your CRM consistently to improve sales dramatically. Salespeople that improperly or inconsistently use your CRM software and neglect sales opportunities with reduced tracking, reporting and accountability will cost you a ton of money.
Sales success always goes to the team with the best sales management, training and sales skills. CEO Advisor focuses on building professional sales teams and optimizes sales results to increase its clients' sales, profits and value of the business.
Contact Mark Hartsell, MBA, President of CEO Advisor, Inc. for a no cost initial consultation at (949) 629-2520, by email at MHartsell@CEOAdvisor.com or visit us at www.CEOAdvisor.com for more information.