Why You Should Sell When Your Business is on Top
My guest today is Sabina Teshler. Sabina is the founder and current chairperson of SET Creative. SET is a consulting agency for businesses wanting to take their brand recognition to the next level. The company was sold to WPP as an attempt to bring SET to a wider audience. The choice was the right one and now Sabina works to keep her business culture the same as it was when she was CEO.
During today’s show, we discuss how Sabina and her business partners decided to sell the business. She explains why she chose to sell the business when it was “on top” and why she recommends that to any entrepreneur. She stresses the importance of building a good team and knowing which direction you want to move in as a company. Her confidence in her team and business is inspiring.
SET Creative is a rare story that has a happy ending at the end of the sale. That’s not by accident. Sabina shares how she and her team negotiated and challenged their deal to their optimal outcome. Tune in to hear how to sell your business the right way.
What you will learn about:
- Sabina’s journey to entrepreneurship.
- The importance of meeting the client’s needs.
- The difference in “working on the business” and “working in the business.”
- The importance of hiring the right team.
- Building an executive leadership team that will add value to the business.
- Why Sabina and her partners sold SET Creative.
- How the sale affected the company’s vision.
- When to create an exit plan.
- When to call an advisor.
- How to negotiate a favorable deal.
- The importance of knowing what questions to ask.
- Why you need to be able to “walk away.”
- The 3 assets Sabina and her team brought to the negotiations.
- The deal structure that Sabina negotiated.
- Why business owners should expect some turn-over after a sale.
- Sabina’s new role as a cultural leader.
- What Sabina would have done differently during the negotiations.
- Sabina’s advice to the listeners.
Today we are talking to Sabina Teshler who has gone through a rather successful exit which she managed to keep in line with her own vision and needs. Not only that, but she got the full value she was looking for to keep her solvent for the future. It wasn’t rocket science that allowed her to achieve all these things; rather, it was preparing early and not being afraid to sell when the time was right.
Prepare For a Business Exit Early
Sabina is not the only person who has told you that preparation is key in life and business. However, perhaps her story of being prepared equalling lots of cash and a happy business transition will be the motivation you need to start your own preparations today.
When you start thinking about the integral aspects of your business that add to your life, the key things you want to continue when you’re gone and other such considerations, you can figure out what you want and need to get out of your eventual exit. Bo Burlingham talks about this in his book Finish Big because so many people undervalue how important knowing what you want and why you want it is when you go to sell your business. You will see greater happiness knowing what you’re after and going for it from the start than if you sell without the end in mind and suddenly find yourself in a position where you’re left feeling unfulfilled or even with regret.
Timing The Sale of Your Sale
When is the best time to sell your business? You’ll hear a hundred answers about this. But one thing many business owners tend to shy away from is selling their business when it is at its prime. Sabina is a great example of why you should not be afraid of doing this.
Waiting for your business to level out (or even when it takes a negative turn) can actually hurt the bottom line you get for your business in the end. If you sell when it is still growing, or has reached an all-time high, you can secure a higher number because you are showing the strength and stability of your product, service or brand. There is more money to be made, essentially, and the buyer can readily see that. Reducing the buyer’s risk improves your business’ appeal—and while we know this to be the case, oftentimes we still won’t sell our business at a peak because we want to reap the benefits.
You need to have a wider frame of reference, though. How much longer do you want to keep working in your business at this level? How much longer can you continue to grow your business with the current resources available to you? It’s all timing. Before you start to see the downturn that inevitably comes from hitting multiple ceilings, you can secure yourself a really well-structured deal that saves the elements of your business you care about the most while passing the reigns over to a company that can continue to grow and develop your business.
Plus, for many of us, we’re not rid of our business when we sell it. Many owners stay on to help with the transition and others stay on in other capacities because there is an interest in product development or some other factor that really resonates with the entrepreneurial spirit.
It does take a bit of due diligence, determination and the ability to look inside and be introspective so you can figure out what you need from an exit and therefore when you need to do the exit. You may also want to bring on an advisor or other person you can rely on to provide great council in areas that you may be weak.
The Trusted Partner in a Business Exit
For Sabina, her trusted partner was her husband. While your life partner might not be your ideal business partner, both relationships are of equal commitment and importance. Find someone who has the same goals as you, shares your vision and is accountable to you and the business so that the investment is equal on both sides.
Conversations need to happen early and often to ensure everyone is on the same page as the business continues, particularly as it nears the point of sale. Aligning your goals before you sell helps you position your business for the right company (one that shares your goals) to purchase you. This comes back to the first point about preparing for a sale with your end game in mind: if you know what you want your business to look like when you’ve exited it before you enter the sales process, your negotiations will go much better and you’ll have a happier outcome for all.
Not All Business Sale Contracts Are Made the Same
Part of your negotiations is looking after your interests, both personally and professionally. So aside from getting the dollars you want out of the sale, you also want to protect your original vision so the business continues in a similar fashion after.
Sabina was very adamant about continuing her business after the sale as it was before because the culture was very important to her. This was part of her considerations during the negotiation process. As she says, “Not all contracts are made the same” and you can challenge and negotiate contracts differently to make sure you achieve your desired outcome.
And, if you’re not going to get what you want out of the deal, walk away. Sounds easy, but if you’ve prepared for your exit and have the right team/advisors in place, you actually can walk away with no harm done—and with a better idea of what your business is valued at and what you need to do to get what you want.
So ask yourself the hard questions and get yourself into a better position to start drafting ideas for what you want from a sale so you can always be prepared to sell if the opportunity presents itself.
- Always have an exit plan. Sell your business when it is on top so you are bringing more to the table. Call the right advisors to create the right team to sell your business and plan the most favorable exit for yourself you can.
- Call advisors. The right advisor will bring value to your company and help you make the right decisions for your business. They will also help you find the right questions to get the exact outcome you want from the sale.
- Know what you want out of the deal. Ask the questions that will lead to that outcome. It is important that you are always in the position to be able to walk away from the deal when your needs and wants aren’t being considered.
Links and Resources
Sabina Teshler is a member of the Women’s Presidents Organization and in 2014 was named Enterprising Woman of the Year by Enterprising Women Magazine. She began her career as a retail consultant and quickly developed a reputation for delivering results. After becoming a top account executive at Ivey Performance Marketing she realized there was a need in the market for a creative agency that would provide an experience tailored to each individual client and she founded SET in 2009.
Sabina is dedicated to driving the success of SET through delivering exceptional work and leading a diverse and highly creative team.
Brought to you by Ryan Tansom of Intentional Growth