TMBA 303: 7 Things To Consider When Selling Your Business

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This is an exciting episode for us. Bossman and I are pleased to announce that we have sold our product business. The sale process was over a year and a half long, and we are going to be telling some pretty interesting stories about what happened along the way. We’ll also be talking about what we have learned from exiting a business that has been such a big part of our life since 2007. On this episode, we’ll be sharing seven things we wish we would have known, that we hope other people will consider when selling their business.

Listen to this week’s show and learn:

  • Why we decided it was time to leave our business.
  • Our experiences with the different suitors that offered to buy our business.
  • Why you have to have your financials in order from day one.
  • How our emotions almost cost us a million dollars on the deal.
  • What the best time is to sell your business and why.
  • The complications of working with brokers and lawyers during the sale process.

People on this episode:

Mentioned in the episode:

Listening options:

Thanks for listening to our show! We’ll be back next Thursday morning 8AM EST.

Cheers,

Dan & Ian

Published on 08.13.15
  • http://www.tropicalmba.com/ Dan Andrews

    thanks Evelyn!

  • https://twitter.com/MarkEGreene Mark E Greene

    Hi guys,

    Huge congratulations on the sale.

    As someone who previously owned a physical product business (involving China & Poland), I can only imagine the water-tight systems you were able to demonstrate to the purchaser.

    Let me make a prediction here.. no better way for me to end up with egg on my face right? ;-)

    I believe that over the next 2-3 years (or maybe a lot sooner) you’ll look back at mid-2015 and reflect that this was a great time to sell.

    I fully expect that some of the daft money that’s out there at present (e.g. Private Equity) to start rapidly drying up. The trickle-down effect from the China binge (Ghost Cities anyone?) has now stopped – just watch the coming fireworks in real estate in AUS/NZ/CAN/USA as a result.

    In terms of those start-ups craving growth over revenue, both HomeJoy & Zirtual should serve as canaries-in-the-coalmine for the easy-and-endless-money brigade.

    IMO those who focus on solid & scalable revenue businesses will do great in the next few years, I look forward to more TMBA-ers posting Exit successes! :-D

    Congrats again!
    Cheers, Mark

    PS I’d like to start a Hedgefund that will be short global sovereign bonds, who’s in? ;-)

  • Conchita

    As usual, a spectacular episode thanks to the adorable wisdom of Ian. Hi Dan, you say it’s like selling a child! I wouldn’t say it’s comparable…

  • http://www.tropicalmba.com/ Dan Andrews

    haha yeah I hope not!

  • http://www.tropicalmba.com/ Dan Andrews

    you betcha eric!! I think Ian’s been pouring some of the proceeds into that M3

  • Jonathan Rollins

    I love the Tropical MBA brand, even if it is a bit aspirational in nature. What about launching a “higher end” podcast for more seasoned entrepreneurs when your producer comes on board?

    Loved this episode, since it is something that we don’t get to hear about often and make a nice companion to the episode (TMBA280) where you talked about the decision to shut down your software start up. One thing that I felt you left out (maybe in concession to time or for another episode) is that having an exit strategy up front also makes winding down a partnership easier
    if both parties know how to exit the arrangement (death, change in family
    situation, an unprofitable venture, etc.).
    Several years ago, I opened a small catering company to supplying
    desserts and other foods to coffee shops and bars. After our first couple
    months in business, my business partner was telling me that our customers weren’t paying, but insisting that we keep delivering products. I disagreed and the conversation where I confronted our customers went nothing like I expected it to. Turns out that he’d been collecting checks, but not cashing them. We didn’t
    have a mechanism in place in our partnership agreement for either partner to
    easily leave the business and I got lucky when he agreed to simply shut the
    business down, hand over the checks to me (I’d put in most of the startup cash)
    and close down the business. Since most of the customers were my contacts going into the business, it was easy for me to restart under a different name. A
    couple thousand dollars and a bit of experience later.

    Congratulations, by the way, on the sale!

  • http://camcollins.com/ Cam Collins

    Congrats Dan and Ian!

    Nice reflective tone in your podcast too. Pressures off (for now). Dan during our pre-interview before the podcast where you interviewed me I thought we talked about the fact that the buyer typically drafts the purchase agreement. Regardless, the legal fees to the seller are still extraordinary. Like you guys, we tried to keep opposing counsel off the phone with each other and we sorted most of our business issues between us.

    Interesting that you all went the broker route. It obviously paid off for you. I am assuming your buyer is someone you did not know prior to the LOI. We chose not to hire a broker and in hindsight maybe it was a mistake. Given that we felt our business was so niche and required a strategic buyer, we decided to create our own offering document and shop the business ourselves. Even though two competitors were interested, the buyer was actually someone who saw more of a strategic play and that’s why we did the deal.

    I am still in the deal…very different than you guys. As promised, that’s a topic I will banter about in the DC.

    Cam

  • http://www.tropicalmba.com/ Dan Andrews

    That’s correct, we were not aware of the buyer and they came from the broker’s list. Looking forward to catching up when we can!

  • http://www.tropicalmba.com/ Dan Andrews

    thanks Jonathan! Not sure we have the energy for two shows! Perhaps we’ll keep going at TMBA until we can come up with something better.

    That’s a great point about partnerships that Ian and I have frankly gotten lucky on and so didn’t have great processes for it in our business. Thanks for sharing your story!

  • http://www.tropicalmba.com/ Dan Andrews

    Mark I agree with you it was such a cash intensive business I think we’ll be thankful that we made a move before any kind of downturn, it wasn’t that we didn’t think the business would survive, but we didn’t want to continue to drive it through and hold it until the market comes back up… let us know when the Hedgefund launches :D

  • http://joelannen.com/ Joe Lannen

    I like the TMBA brand. I started listening to you guys while I still living in the States, but had decided to jump ship and move to Thailand. Been here almost a year now and when I think about TMBA I get a warm feeling of nostalgia for when I was a dreamer about my current lifestyle.

    I’d say keep it, it’s a great podcast and the concept is inspirational… but if y’all aren’t diggin it anymore then def change to something YOU’RE more stoked about, as I’m sure it will reflect either way.

    Cheers guys stay up!

  • http://www.tropicalmba.com/ Dan Andrews

    cheers Joe appreciate the feedback!

  • http://essentialsoftheonlinebusiness.com/ Chris (Krzysztof) Trynkiewicz

    By far my favorite episode, very actionable even if you’re not selling at the moment. I would love for you to get into details on how each of the potential buyers behaved and what he said that might ring a bell for your listeners, but this was mighty fine too! Cheers and congrats, looking forward to your next venture.

    Chris

  • http://www.tropicalmba.com/ Dan Andrews

    appreciate it very much Chris

  • Arthur Stoler

    Savvy analysis – I learned a lot from the details – Does anyone know if my company could locate a fillable a form document to use ?

  • Isabel Ortman

    Hi Arthur Stoler ! my work colleague filled in a blank a form form using this http://goo.gl/lydmxE

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