 Let's talk about how to buy or sell a business for a hundred million ten million a hundred thousand Whatever the number is. I'm on the farm gym My rocky Balboa gym It's kind of cool It's a storm outside, but uh So I'll tell you from my experience, you know, I My first business I built or one of my first businesses I ended up selling it's like a nightlife business in North Carolina called triangle fiesta and you know, that was like a six-figure sale and I've bought businesses for Seven figures eight figures So I got a lot of experience in this and I'll tell you some stuff that I've learned that maybe helps you Let me first take it from the standpoint if you own a business now or if you're starting a business How to maximize it to sell it so And like I said, I bought a lot of stuff bought recently. I bought bodybuilding calm. That was a business that I Won't it's private company, but it's big business big brand and I'll just like I said starting I give you experience from little businesses all the way up to the big businesses that I bought that We're doing nine figures in revenue when I bought them or selling a business Here's the first thing you need to know if you own a business You should build it from day one that the in a certain way doing a certain couple little Techniques that make it easier to sell So number one you need to structure the accounting correctly makes it easier to sell Accounting is usually entrepreneurs least favorite thing to do because it's not that creative and fun but if you build the business and You can't back up the numbers and you specifically here's the simple answer to this Don't trust the first accountant that says there just because there's CPA doesn't mean they're gonna do it, right? Find an accountant. That's actually Worked and help people sell businesses because you need things if you can get your financials audited That's great. You can't always afford that if you have a public company obviously you can but smaller businesses You can't but treat the business as if you want audited financials Try to use better software now net suite is kind of a gold standard for building Your accounting around it's expensive. So some people use simpler things like quick books I've used both if you can afford it and you're investing in your business and you if there's anywhere you want to invest Should be in the accounting bookkeeping side. So some practical things, you know offshore like in the Philippines You can find real CPAs. I'm kind of American trained CPAs That can do your bookkeeping for much cheaper And then I would recommend you have an accountant oversee them That's in your country. So if you're American you have a US CPA set this stuff up, right? Pay attention once a month minimum do a zoom with your account Even if it costs extra money and say I want these books to be perfectly set up Make sure your chart of account is set up. Well So that's kind of number one invest time energy and money above average Comparatively to the average entrepreneur from day one on your accounting. Okay number two the legal structure now This is a complicated. I you know, I've have many Structures to businesses some very complicated and some I've started with some simple LLCs what I'll tell you is this Simple make sure you have a nice dropbox where you store all your articles of incorporation all that stuff Believe it or not simple things like that can scare away a potential buyer of your business So somebody comes and you build a business even if it's small business medium large if they ask you on day one Can you show me kind of the structure in the accounting if it takes you two weeks to produce? Even if you've done nothing wrong, it's gonna scare them off. They're gonna be like, oh, why can't they instantly produce it? So even with your legal, I set up a nice dropbox structure have all the contracts You know how contracts folder articles of incorporation folder just simple stuff I know this sounds super cliche, but selling a business is There's a lot of emotion to it and people are taking a risk of maybe giving you millions of dollars to own your business And they're always looking for a reason not to buy your business People get spooked very easily very easily. Okay, so if you want to sell the business for a maximum You want your bookkeeping above-average? Attentions been paid from day one your legal all the legal stuff is nicely set up. Okay In just a dropbox that you could share or you could create a data room for that the third thing um you want to invest in people and What that means is don't just build the business you need to be probably a CEO of your business But really you want to also sell when you go to sell the business that if you leave This thing's gonna run on its own because you built a nice team that again takes investment dealing with frustration You're probably you know the old saying If you want something done right do it yourself Well, that doesn't apply if you want to sell your business for the maximum price because People know even if they ask you to stay on and do an earn out. It's called They still are looking for a business that's somewhat at some point will be able to run without you because they're buying you out So when it comes to selling the business You're gonna have to take the time now on average You're gonna have for like a CEO or a CEO or a cfo you're gonna need to kiss a lot of frogs So from day one building your business be committed to to hiring and firing fast higher fast You probably need a 10 to 1 ratio for leadership But most people give up and say i'm just gonna do this business myself But when you go to sell the business it's much less valuable Then if you had taken the time kissed a lot of frogs hired a lot of people fired a lot of people until you were left With you don't need 10 amazing executives. You need like two besides you. I like to think in threes Okay, that way if somebody's on vacation or leaves, you always have two a redundant system kind of like belt and suspenders So my advice is try to build an executive team of three people so that when you exit And they send you a check or a wire for that business. They know they have two people staying on Okay And even when you build executive Compensation for those people Have some kind of clause where if you leave there are even more instead of eyes to stay on you don't want them to exit With you necessarily which sometimes happen, but that's for a more advanced conversation the fourth thing I would say Is you want to build a combination all good brands now a days or big brands are somewhat personal brands Elon musk sub teslas somewhat a personal brand He uses his personal imagery to grow this brand. It's his personal jenis a quat okay, so zuckerberg You know bill gates. You most of us know these Warren Buffett So these big brand you want to build a brand that has an aspect to you personally Maybe you're using social media to grow it. You're using your personal presence to attract talent and customers But always build a brand component that's bigger than you once again People know if they buy you out if it's all predicated on you and you being the face of the business and the executive team They're going to lose that and they're going to devalue your brand You're going to get less money when you sell your company. By the way, if you're looking to sell your company I do consulting to connect people with the best business brokers Globally, so i'm going to put a link below or on the side here If you want to sell a company that you own Um, go here fill out this quick form put in the info and i'll tell you I can even give you my estimate of what you'd be able to sell your business and i'll help you connect you Uh to the right business broker, okay? So go here or go to tylopes.com slash podcast Sell a company tylopes.com slash podcast Sell a company it'll redirect you to a simple application Let me give you I I don't always have time to do everyone but Um, I can give you if you've got an establishment if you got a new business Never made a dollar don't go to this website But you've got a business even if you're only doing a hundred grand a year or a million I've helped people find the right business broker. I'm working on One of my followers. They had a family business and I don't want to jinx it But they've got I helped them connect to the right business broker And they've got an offer for more than 50 million dollars In their business now that's an exceptional case but You'd be surprised sometimes There's somebody out there who wants to buy your company even if it's only doing a hundred grand a year The sweet spot is if you're kind of hit, you know 500,000 to 5 million a year if you're beyond that I can put you with some different business brokers that can at least shop it around It's always good to shop your business kind of like you have a piece of real estate get it appraised You can get it appraised sometimes, you know real estate and you can pull You can refi and pull some cash out, but in the business case, it also encourages you So if you have a business Click on the link below or if you're listening audio tylopez.com slash podcast sell a company Let me get you a quote from a business broker on what they think your business might be worth and if they can Potentially sell it sometimes you can do a partial sale or a full sale if you love the business But super important even if you're not ready to sell get a quote So tylopez.com slash podcast sell a company type that in or click the link here now A couple other things on selling a business When the time comes You want to use the right business broker even if somebody comes to you Out of the blue or directly to you and says I will buy your company for 100 grand a million 10 million 100 million whatever Get a business broker to shop it around you can put a carve out that existing offers you have They won't get a commission on because sometimes you've got to read the contract Sometimes business brokers will be like any sale I get my commission But don't it usually most business brokers. It's not that much money and oftentimes you know, maybe I'm biased because I work with business brokers, but like They'll often get you a higher price by shopping around in general don't take the first offer Shop it, you know, you want ideally one more than one term sheet Or loi or iou, you know, they call them mo you Indications of interest loi. There's mo use which is memorandum understanding. That's a different concept loi or term sheet. It's kind of a term that people use in this industry And in general, um, you want to get three of those now. It's not always the case. Sometimes you'll get 20 Okay, sometimes you'll get zero sometimes you get one But in general, even if you have a direct offer on your business a mistake I see people doing is about well, you know, my friend's friend offered me 100 grand Send it to a business broker if you sign a contract say carve out I've got these three people that already made offers If I go with them you get nothing and you can even put the names of those potential people in the contract Talk to a lawyer on that But you want three offers. It's kind of like if you're getting married You want to probably have gone on three dates with three different. I mean with a date with three different people So, you know you want an hindsight go what if Okay So that's where a business broker has become important. You can also use social media and advertise your business yourself That the good thing about some kind of professional helping you is you can get them to sign a confidentiality You don't always want to be putting on your social media. Here's my data room login Here's all my info in here Like then you're going to get your competition Seeing all your trade secrets. So it's sometimes good the thing about a business broker is you can get or or some kind of professional You can use a lawyer sometimes They can get that element you can get people to sign an nda more confidentiality than just shouting it from the rooftops Sometimes it's fine to shout it but depends on your personality Some people you have trade secrets and you don't want people poaching your employees and stuff like that It's better to have some professional help you now. Let's talk for a second about buying a company That's a whole nother video As I started the video. I was like, uh, this is longer. I'm only Is late at night But let me just say this on buying companies a couple three little pointers on buying companies Buyer beware almost always when I buy a company, I'm assuming there's some things they didn't disclose So if you get a rosy picture that this business is doing great and it's making millions and that then you got to Why are they even selling it? Usually there's something wrong expect it I bought a business not too long ago and it had, you know, five million of bills that were undisclosed three or four or five I forget the exact number but But I wasn't shocked because I knew when people are selling a business they often have Some skeletons in the closet. So you need to go into it expecting it What your job in your due diligence phase is to be sure there's no insanely large skeletons in the closet The insanely ones are what'll get you Okay, so you need to allow If it's a 10 million dollar asset, it's probably should allow that there's three million Of negative that they've not disclosed if you do your due diligence, you're never going to be able to negate all risks So that's why I said buy or beware. They're usually not telling you something even if they're ethical They want to paint the rosy picture number two try to get some kind of payment over time That way if there was a lie to you you haven't given them all the money because it's not always easy to get the money back In reality, so You buy a business, you know, you go out you say, look, I'll pay you an x amount of payments. Okay And number three When you can get seller financing, which kind of goes along with number two But number two, even if you're not using seller financing and you have all the cash yourself Try to not wire it all at once because of number one buyer beware So that's a simple way to protect you that sometimes is better than all the legal contracts in the world Um, you know, number three get a seller note. That's where they let's say a business is 100 grand You give 20 grand upfront and they finance it and you pay them in payments the rest of the 80 grand that accomplishes number two and Spreads the risk and also there's an element of leverage there which can be okay and try to not number four Don't you know in general don't personally guarantee that seller's note So that if you find out the business is junk and you've made some payments You can cut your losses. They'll get the business back Now this is more intricacy if you're using the business as collateral not everybody will do this but Anyway, if you want to buy a business you can also I can connect you with business brokers So same link i'll put in the corners or below here or tidalopis.com Slash podcast sell a company that'll take you to the same uh Sorry tidalopis.com slash buy a podcast buy a company tidalopis.com Slash podcast buy a company That'll take you to the link to where you can fill out what kind of business you're looking for I can connect you with business brokers globally that you can kind of see You know if you want a restaurant a laundry man a car wash an online business an amazon business There's brokers out there that specialize and sometimes it makes sense to buy a company to Kind of supercharge your business you can buy I recommend, you know, you want to buy a business that your current staff your current expertise Another business in the mix doesn't confuse it. It's center. It adds a synergy. There's a lot of you know Efficiencies of scale so try to look for something if you want A business broker. I can connect you to one So yeah, you know buying businesses is the kind of final frontier of business you look at You know Louis Vuitton wealthiest guy in the world He bought like 50 or 60 companies to build his empire. Elon Musk bought tesla You know, he didn't build it from scratch. So there's a power in buying a company It's a power in selling a company. Elon Musk sold his first company for I think 20 30 million bucks That leverage that gave him the power to do his next thing. So you know Business falling in love with your business is good, but it's okay to be in the mentality of You know, you build stuff you sell it and you maybe buy something else or build something from scratch that kind of fluid understanding Of of the business and a lot of entrepreneurs is so attached to one business kind of lose perspective It's okay to build a business and it's your baby But it's also okay to add on by buying other businesses that other people built And it's also okay to sell a business, you know, but get a quote So you at least can do the math and do the You know, you could compare the cash you're gonna get And that present value kind of calculation, which tells you am I better keeping it and getting profit over here for my existing business? Or am I better Selling it and getting a large lump sum now, even if it's a discounted number to the future flow The future some the sum of future cash flows in the same way. Do you want to buy a business? Well, do the math on the time an opportunity cost It'll take to build that brand versus just buying it on day one and being in business hypercharge your business. So anyway If you're looking to buy a business or sell a business tylovis.com Slash podcast sell a company if you want to buy one tylovis.com slash podcast buy a company So see you there. Hopefully this gave you a few pointers. Put a comment below What do you think is something I left out that's super important in building a company that you can sell? Or leave a comment on, you know, what's something I left out? That's super important when you go out to buy a company from your experience. So I hit the finish up the gym here too much talking