Many entrepreneurs experience extreme anxiety whenever they think about selling their businesses—to the point where they won’t even pick up the phone or answer an email from a potential buyer. Have you ever stopped to think about why this is? On today’s show, my business partner here at Arkona, Pat Hobby, and I talk about ways to mitigate this anxiety through intelligent and intentional planning. We also discuss why you should be prepared for an out-of-the-blue offer—even when you’re not considering selling—since potential buyers are reaching out to business owners with increasing frequency. Do you want to miss your multimillion-dollar deal? Of course not. But if you have no plan, you’re not going to get what you want out of an unsolicited offer (or even a solicited one!). This isn’t an episode you want to miss if you’ve ever wondered what you need to know to be ready for any outcome, or even if you just want to give your future more choices.
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Pat Hobby started his career as an auditor at EY and over the years held various finance positions before launching his own outsourced CFO services company. As one of his clients continued to grow and needed more assistance, he joined the company full-time for more than 20 years. He helped the company grow significantly, do acquisitions and eventually sell it to the employees via an ESOP. Two-and-a-half years later, he led the sale of the company to a PE firm—with tremendous benefit to the employees. Since then, Pat helped co-found Arkona to help change how owners grow and exit their businesses.
06:00 - “There’s a lot of money looking for a place to get a return.” – Pat Hobby
06:43 - “Right now, in the private equity world, it’s easy to raise money.” – Pat Hobby
11:49 - “If you’re positioned properly, you can maximize the results of what you’re trying to accomplish.” – Pat Hobby
17:26 - “It’s human nature. When you don’t understand something, you just ignore it.” – Pat Hobby
21:55 - “A lot of people who had a great success on the financial side of selling their business are still unhappy because they don’t know what’s important to them.” – Pat Hobby
28:00 “Business owners aren’t professional folks selling their businesses.” – Pat Hobby
35:00 - “Most people do it once. It has to be done right.” – Pat Hobby
35:44 - “The ability to negotiate the right deal is not automatic.” – Pat Hobby
41:18 - “Is that extra amount worth it? Is it worth 60 people losing their jobs?” – Pat Hobby
43:00 - “Your kids act up when they feel like they don’t have any control. I believe that about adults.” – Pat Hobby
44:20 - “You can’t see what’s going on all the time unless you do the financials the right way.” – Ryan Tansom
46:32 - “Once you figure out what your strategies are, you have to translate that into your financials.” – Pat Hobby
46:35 - “Financials are the language of business.” – Pat Hobby
57:21 - “It’s critical to understand the process.” – Pat Hobby
61:34 - “So many of the terms and conditions you’ve negotiated can make or break a deal.” – Pat Hobby
63:23 - “Every seller is expected to deliver the buyer a normal quote-unquote working capital, which in most businesses is AR—inventory less payables.” – Pat Hobby
67:16 - “The training that we created was because this is something we wish we had eight years ago.” – Ryan Tansom
67:26 - “The stress of running a business without a plan is just, it just doesn’t need to be that way.” – Ryan Tansom
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