Articles Tagged ‘business owner’

Great Salespeople Think Like Owners: 10 Ways To Make A Difference

Monday, October 17th, 2011

Making things happen takes action

Several weeks ago, I was conducting a sales seminar for designers and salespeople. Since I was the last speaker for the week, I asked the group what was their biggest challenge with the information they received. The answer: how will we implement these great ideas? You see the participants weren’t owners and couldn’t go back and immediately make changes. This wasn’t the first time I’ve heard this but this time I decided to add some sales strategies for the participants.

What good would all this information be if no one would listen?

1. So what do you do? First you must understand that if you’re selling customers you are an owner! Without you and your sales the business would die. Trust me, if you can’t sell anything you’ll be out the door and be replaced by someone who can sell. That’s how important you are.

2. Think like an owner. Being an owner and worked with many, I can tell you they think about money and sales. Without sales the business will not exist and a smart business owner puts as much money and time into training their sales staff. If you’ve been sent to a sales seminar consider it an honor and take it seriously. The owner has made an investment in your future. It means you are valued.

Your job? Rise to the occasion and learn as much as you can and be prepared to go back to your business and as they say: learn it, teach it and do it!

3. First things first. You’re probably excited and learned so many things you don’t know what to talk about first. Think like an owner and discuss the things that are connected to number 1. –sales and money. You will have learned lots of important things and many will stand out in your mind but are they the ones “most connected to the bottom line?” Are they ones you can implement easily, will they have the most impact on your business? Start with these things first. As someone once said, we’re learning how to be “mini moguls!”

4. Make sure it “makes sense.” Do you have the data right, do you have an example of how it gets done? If you need more info before you present your ideas, go get it right.

5. Make an appointment with the owner or manager who will be implementing your ideas and use rule 2. as one of your bargaining tools. “You sent me to these informative seminars, and there are ways that we can make more money and improve our sales. Who wouldn’t want to listen to this sales pitch? This will be the best sale you’ve ever had!
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Sticking a Toe (or two) in the Exit Planning Pool

Monday, August 8th, 2011

Presented by T. Ray Phillips

In the previous two issues of this newsletter, we attempted to dismantle the most common objections owners make to undertaking the planning necessary to exit their companies successfully. Those excuses to avoid exit planning are:

The business isn’t worth enough to meet my financial needs. When it is, that’s when I’ll think about leaving.
I will be required to work years for a new owner.
I don’t need to plan. When the business is ready a buyer will find me.
This business is my life! I can’t imagine my life without it!
Assuming we were successful in persuading you that exit planning not only helps your business while you are in it, but is also the best way we’ve found to leave your company to the successor you choose, on the date you choose and for the amount of cash you want, how do you, as an owner, jump into exit planning?

Let us suggest that one of the best places to jump in is to take some measurements.

First, retain a valuation expert to perform an estimate of value of your company to find out what it is actually worth. (If you plan to sell to a family member, co-owner or employee, retain a certified business appraiser. If instead you foresee a sale to a third party, ask a business broker or investment banker for a “sale price estimate.”) The transaction advisor you choose (an investment banker if your company’s likely value is at least $5 million, and a business broker for smaller businesses) should be able to give you a range of value for your business in today’s M&A marketplace. As we’ve seen over the past few years, best guesses and educated opinions are nice, but they are weak foundations for exit planning.

Second, sit down with your financial advisor to figure out how much cash you will need to meet your financial needs. Again, tap into the expertise of your financial advisor to help you objectively analyze your future needs and make realistic, risk-sensitive assumptions about investment rates of return.

To illustrate how assumptions, rather than objective measurements, can lead owners astray, let’s look at Sam Reed, a hypothetical business owner, who went into a transaction armed only with assumptions.

When Sam Reed started thinking about selling his business, he started paying close attention to what competitors were getting for their companies. He applied his industry’s rule of thumb to his company, compared his company to others and figured that his company was worth about $20 million. He calculated that he’d take home about 75 percent of that after taxes. Since he needed $6 million to pay off business debt, he thought he could cash out for $9 million.

Sam hadn’t put a lot of thought into what income he’d need for a comfortable post-exit life, but figured that at his age (50), $9 million, yielding 8 percent per year ($700,000+ annually) would be adequate replacement for the $850,000 salary and distributions he currently took from the business.

With these stars aligned, Sam put his company on the market. Unfortunately, Sam’s telescope was out of focus.
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Exit Planning Myths

Monday, November 1st, 2010

Presented by T. Ray Phillips

Myth: “My CPA will tell me when it is time to start planning for my business transition.” (Replace CPA with “attorney,” “financial planner,” or “insurance professional” and the myth remains intact.)

Fact: Your advisors, be they CPA’s, attorneys, Financial or Insurance Professionals, may not initiate planning discussions primarily because you have not told them you are interested in leaving your business. Other reasons include:

• Your advisors may or may not have the experience necessary to guide you to a successful exit. As a result, they may not think to ask you of your plans.
• Your legal and accounting advisors may focus their attention on compliance-type activities (Directors’ Minutes, an employee problem, tax returns, etc.) and may not “see the forest for the trees.” They solve specific problems or issues that clients bring to their attention. Many are simply not planning oriented. Similarly, financial and insurance professionals often focus on a smaller subset of overall planning—perhaps investment planning or life insurance planning to help meet income needs or estate tax costs.
• No single profession possesses all of the skills and experience necessary to single-handedly lead an owner through the ownership transition process. Additionally, some professionals are not comfortable cooperating closely with professionals from other disciplines for the benefit of their common clients. The result can be that the process stalls before it really gets started.
Having said that, there are, of course, many advisors who are exceptions to these generalizations.

It is dangerous to wait for others to take the first step. You need to take the initiative, but how?
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