Billion Dollar Exits founder Coran Woodmass never finished high school. It didn’t stop him from becoming self-educated and entrepreneurial. Over the years, he learned how to reverse engineer billion-dollar deals after mastering sales and negotiating dozens of exits.
His current gig is buying millions of dollars worth of EBITDA at a discount with other people’s money.
Successful exit planning is a mix of art and science, says Coran. A great strategy, the right people, and aligned agendas are key. The news is Coran has proven himself to be an expert at aligning all three of these factors for his clients, and he’s about to share some of his secrets with you.
An introductory 101-point guide to billion-dollar exits.
Many entrepreneurs dream of billion-dollar exits. However, they’re hard to come by. It’s estimated that only 1% of tech companies that sell or go public ever get a billion-dollar valuation.
What’s the secret to building a billion-dollar company? Is there anything you can do to increase your chances of exiting?
You might want to consider these strategies:
- Choose the right market. There’s no such thing as an equal market. Disruptions happen to some more than others. To build a billion-dollar company, you need a big, growing, underserved market.
- Develop a unique product or service. You’ve got to offer something nobody else does. Ideally, it’s a product or service that solves a real problem for many people.
- Execute flawlessly. Your product or service has to be flawlessly executed once you have it. It’s all about delivering on your promises, giving excellent customer service, and staying ahead of the curve.
- Scale quickly. You need to scale your company fast to get a billion-dollar valuation. To do this, you have to keep acquiring new customers and expand.
- Get the right team in place. It might be your business, but one person doesn’t build billion-dollar companies. Having talented people around you who share your vision and are committed to your success is key.
It’s not a guarantee you’ll make a billion-dollar exit if you follow these strategies. However, your chances of success will increase if you’re willing to put in the hard work and make the right decisions.
You can increase your chances of a billion-dollar exit by doing these things:
- Establish a solid financial foundation. In order to achieve this, you must have a solid business plan, raise the appropriate amount of capital, and manage your finances properly.
- Develop a strong brand. You will attract customers with your brand if you set yourself apart from the competition. Ensure your brand consistently reflects your company’s unique value proposition across all channels.
- Get in touch with potential acquirers. Discover who is most likely to be interested in acquiring your company. Contact potential acquirers directly, attend industry events, and meet with investors.
- Take your time. In order to build a billion-dollar company, it takes time. A successful exit won’t happen overnight. Keep working hard, be patient, and stay focused.
It’s not easy to build a billion-dollar company. However, it is possible if you have the right strategy and the determination to succeed.
In other words, don’t give up if you have big dreams as an entrepreneur. It is possible to achieve a billion-dollar exit if you work hard and dedicate yourself.
The art of billion-dollar deals.
Coran has been a voracious reader. Mainly, he has been obsessed with billionaires and billion-dollar deals. He looks at these deals and is interested in how they work.
Billion-dollar deals, however, are nuanced and complex. Building relationships and negotiating effectively takes a deep understanding of the business landscape.
But, during the closing of a billion-dollar deal, there are several key elements to consider:
- Research is key. Before beginning any discussions, you should thoroughly understand the business, the goals, and the needs of potential partners. Doing so will allow you to tailor your pitch and make a stronger argument for why your company is the right match for them.
- Invest in relationships. It takes time to close a billion-dollar deal. After all, there is a lot of trust involved. Because of this, it’s essential to establish relationships with key decision-makers within the other company. Make them feel comfortable working with you by getting to know them.
- Negotiate freely. There is no such thing as an easy billion-dollar deal. Negotiations and compromises will be necessary. Regardless of whether the terms are adequate for you, be prepared to walk away from a deal.
- Don’t give up. Be persistent, and don’t give up. Keeping striving for a deal is the best way to keep it going. Closing a billion-dollar agreement can sometimes take months or years. However, if you persist and don’t give up, you will eventually succeed.
For closing billion-dollar deals, here are some additional tips:
- Identify your goals clearly. By closing this deal, what do you hope to accomplish? Would you like to increase your market share, enter a new market, or acquire a new asset? Making better decisions during negotiations will be easier if you have a clear understanding of your goals.
- Walk away if you have to. There are many essential tips to consider, but this is one of the most important. Don’t be afraid to walk away from a deal if the terms don’t suit you. You don’t want to be locked into a deal that’s not right for you. There are plenty of other opportunities out there.
- Assemble a strong team. A billion-dollar deal cannot be closed by one person alone. You need a team of professionals who are experienced in dealing with the complex negotiation process of a large transaction.
- Don’t lose patience. Again, deals worth billions of dollars take time to close. There is no such thing as an overnight closet. Your goal will eventually be achieved if you’re patient, persistent, and focused.
Here’s a secret from Coran that you’ll rarely hear.
He says people tend to think it’s binary when selling a business. A business can either be sold or run. “What we found here was another option where they could actually take a lot of chips off the table, set themselves up, and start investing in deals like we’re doing at The Lifestyle Investor Mastermind,” Coran explains.
The result is that the business can continue to grow. And, even better, the vast majority of the business is still owned by them, or they have total control over it.
Selling a business is art and science
Coran adds that selling any business is an art and science; you have to get in behind the scenes and figure out what the story is and what the “why” is. Most buyers are just trying to find out why you’re selling a company when they discuss buying. For example, there might be a lot of cash flowing on the surface. There’s no logic to it. He explains there are always real reasons behind surface-level sales and sometimes uncomfortable ones.
These factors should be considered by entrepreneurs so as to avoid undervaluing their businesses. When they need help, they should contact a business valuation expert.
How to DOUBLE the sale price of your business.
Are you undervaluing your business? The following strategies will ensure a fair valuation and double the price.
- Increase profits. Successful businesses with a track record of generating revenue sell for more. Expansion into new markets, cutting costs, or increasing prices are all ways to increase profits.
- Improve operations. Well-run and efficient businesses are also attractive to buyers. A strong financial foundation, clear and concise business processes, and well-trained employees are necessary. By improving your business’s operations, you will attract buyers who will pay a premium.
- Increase growth potential. Additionally, buyers look for businesses with growth potential. This may involve entering new markets, developing new products, or creating strategic partnerships. It will be easier to attract higher-priced buyers if you demonstrate that your business will grow.
- Grow market share. As your market share increases, you can command a higher price. Expansion, new product or service development, or competitor acquisition can accomplish this.
- Improve your business’s assets. The value of your business’s assets is also important. By improving your assets, you can sell your business for more money. You can do this by purchasing new equipment, acquiring real estate, or improving your intellectual property.
- Increase visibility. A high offer is more likely to come if more potential buyers are aware of your business. Attend industry events, network with other business owners, and list your business for sale on online marketplaces to increase visibility for your business.
- Make your business more enticing to buyers. A strong business plan, well-organized finances, and documentation of your processes can make your business more appealing to buyers. The more attractive your business is, the more potential buyers you will attract and the higher its price.
Coran uses a unique tactic as well. That’s hyper-strategic buyers. Essentially, strategic buyers acquire companies in the same industry to gain an edge.
Finding the right strategic partner.
While the right strategic partner will double your sale price, finding them can be difficult. The following tips will help you find the right strategic partner:
- Define your goals and objectives. What is your goal for a strategic partnership? You can narrow down your search once you know what you want.
- Identify potential partners. You can identify potential strategic partners by:
- Research online. Potential partners can be found on several websites and directories.
- Attend industry events. Discover new partners and business models this way.
- Reach out to your network. Identify potential strategic partners among your colleagues, friends, and mentors.
- Assess potential partners. Assess the fit of potential partners once you’ve identified them. Take into account their size, industry, and target market. As well as sharing your values, make sure they do as well.
- Reach out to potential partners. Identify a few potential partners you’re interested in and get in touch. Communicate your goals and objectives and how a partnership could benefit both companies.
- Negotiate and finalize the partnership agreement. Finalizing the partnership agreement after reaching an agreement with a potential partner is essential. In this document, the duration, scope, and financial terms of the partnership should be outlined.
Coran also has an unconventional approach. List prices aren’t used, he says. He also does not use traditional postings. He builds a strategic list instead.
He explains that he and his team determine the right buyer based on their experience, the sector, who is active in the M&A world. They approach them and present the deal. From there, they ask them, “How do you value this business? What is this worth to you?”
Featured Image Credit: Photo by Photo by Kelly; Pexels; Thank you!