You’ll Want to Exit at Some Point, But How?

In the first two years of opening a new business, approximately 20% of companies fail, 45% within five years, and 65% within ten years, according to data from the U.S. Bureau of Labor Statistics (BLS). The lifespan of a new business is only 15 years for 25% of them.

So, how is it possible to not only have an 8-figure exit deal, but to do so with a side hustle?

Cole Humphus achieved exactly that with his online wedding photography business. With that company, he grew sales on “auto-pilot” without having to be any type of “influencer” or have to do a lot of social media selling.

As a result, Cole was able to spend more time with family and live life on his terms after landing an 8-figure exit deal.

Throughout this blog post, we’ll discuss how to increase your business exit chances, as well as the importance of leading a fulfilling lifestyle outside of work.

What Makes a Business Attractive to Buyers?

It is important for buyers to find profitable businesses, have a solid track record, and be in an industry that is booming. Additionally, businesses with strong brands and unique value propositions attract them.

Your business needs to be attractive to buyers if you want to land an eight-figure exit. Among the things you can do are:

• Focus on profitability. Your business needs to be profitable and have a good track record of profitability to attract buyers.
• Concentrate on a niche market. Selling a niche business is often easier than selling a general business. Businesses in niche markets or new product categories tend to be more valuable to potential buyers. The blog Cole launched was a photography niche content site, and it turned into a thriving business and full-time income. Later, he sold it to a software company.
• Grow your revenue. Rapidly growing businesses are also attractive to buyers. The more revenue you can generate year-over-year, the more attractive you will be to buyers.
• Build a strong brand. Branding is one of the most valuable assets that can help your business attract more buyers. You should invest in marketing and branding initiatives and have a strong brand identity. For example, Cole learned how to do Facebook advertising all by himself and how to do webinars after attending the Traffic & Conversion Conference.
• Put together a great team. There is no way an entrepreneur can build a successful business on their own. In order to achieve your goals, you need a team of talented and dedicated people. in fact, Cole says that he’s most proud of his “small, mighty team.”
• Create a unique value proposition. How does your business differ from the competition? What makes it valuable and unique? You should be able to clearly articulate to potential customers what your unique value proposition is.

Finally, as Cole has seen firsthand when starting companies, acquiring companies, and growing them, you can’t half-ass your way to greatness. “Like, the thing that got us the success that we got was because we freakin put in the work as if our backs were against the wall because back then they were,” he explains.

In his first year, the business went from $100,000 to $135K, but the next year it grew to $1.5 million. How come? In addition to the above, he buckled down and did the work.

How to Prepare Your Business for Sale

The next step is to prepare your business for sale once you have made it attractive to buyers. You will need to organize your finances, develop a sales plan, and hire a team of advisors to help you.

If you want to sell your business, you will need to do the following:

• Get your financials in order. You should provide buyers with detailed financial information about your business, such as revenue, expenses, and profits. Make sure your financial records are accurate and current.
• Develop a sales plan. You should outline your sales goals, your timeline, and your target audience in your sales plan.
• Assemble a team of advisors. A lawyer, accountant, and investment banker will be needed to assist with the sales process.

How to Find and Negotiate with Potential Buyers

Once you’re ready to sell your business, you need to find buyers. Various channels can be used to accomplish this, including networking, online marketplaces, and investment banks.

As soon as you identify potential buyers, begin negotiating with them. An experienced team of advisors is essential to this complex process.

Negotiating with potential buyers can be done in a few ways:

• Be prepared to walk away. Don’t be afraid to walk away from a deal if you’re not satisfied with its terms. By doing this, you will prove that you are serious and that you are not willing to accept less than you deserve from the buyer.
• Don’t give away too much information. Your business and finances shouldn’t be discussed in great detail with the buyer. They will have an advantage in negotiations if they do.
• Get everything in writing. Ensure that everything you agree on with the buyer is in writing after you have reached an agreement. In case of disputes down the road, this will protect you.

Tips for Closing the Deal

You need to close the deal once you have negotiated it with the buyer. You will have to finalize the paperwork and transfer ownership to the new owner.

The following tips will help you close the deal:

• Be patient. Depending on the complexity of the transaction, the closing process can take several weeks or even months. Ensure a smooth process by being patient and working with your advisors.
• Be prepared to compromise. It may be necessary to make some last-minute compromises or negotiate. To achieve a deal, you must be prepared to compromise.
• Celebrate once you have closed the deal. You should be proud of yourself for exiting a business for eight figures. So, enjoy yourself however you like. For Cole, this was having lunch with his family at a Mexican restaurant and then taking his wife shopping.

Final Words of Advice

As an entrepreneur, fulfillment does not just come from making money. You get it when you provide value for those around you. During Cole’s time with the company that acquired his business, he worked with them for about 18 months. And, he says that it was tough period saying goodbye to work.

However, after several trial and errors, Cole founded Rapid Scale Group, a company that has helped over 200,000 customers build a 7-figure per year business without sacrificing profit or lifestyle.

“I am able to still make money, have impact, still have time when I want to go fishing with my dad on our boat, when I want to go take my daughter to the beach, when I want to go take my wife, or we go to the gym together then go to a lunch date.” he says. “So, this is letting me do all that. And on top of that, there is inherently some deal flow because once I am – I’m basically getting paid to help grow companies.”

Simply put, just because you’ve had success once doesn’t mean you’re finished. In the end, your biggest enemy is complacency.