Today’s episode of the podcast, Robert Hirsch from Freedom Factory discusses “Key Difference Between Owning a Business and Owning a Job”. Do you own a job or a business? Many entrepreneurs don’t recognize the difference between the two. If you are a businessman, it is essential to know how your company performs if you’re physically there and if you’re not. Listen to the podcast or watch the video here https://vimeopro.com/freedomfa…/business-brokers/…/389990100
Do you own a job or a business? Many entrepreneurs don’t
recognize the difference between the two. If you are a businessman,
it is essential to know how your company performs if you’re
physically there and if you’re not.
That way, you can find out if your business continues to profit or
not. There’s a litmus test to find out if what you have right now
is really a business or just a job.
Listen to the podcast, watch the video, or read the
transcript below.
Hi, Robert Hirsch here from Freedom Factory, and one of the most
frequent questions we get is, can I sell my business? And the
answer is always yes. It just depends on what’s the price. And if
you own a job, it’s very difficult to sell. And the multiple is
usually one or less. And if you don’t know whether you own a job or
you own a business, there’s a really easy litmus test to find
out.
Just don’t show up for a few weeks. If your income stays the same
or goes up, you’re on a business. If it goes down, you own a
job.
The good news is there’s a lot of value to be
created by taking people that own jobs and transition to them, to
people that own businesses. And what I mean by someone that owns a
business or a business that holds its shape, if you will, when
you’re not there, when you’re not the primary entrepreneur, you
have systems and processes and employees and team that makes sure
that you generate as much value as you can. So let’s jump into
that. Let’s jump into what that looks like. So again, if you’re not
sure if you own a business or you own a job, just don’t show up for
a couple of weeks. If your income stays the same or goes up, you
own a business. If it’s lower, you own a job.
The good news. If you own a job, you can transition it to a
business pretty easily. What you want to do is build your
operations manual, your systems, your processes, and your team to
get yourself out of the traditional workflow. So you’re working on
your business and not in it. If you need any help with processes
like this, just give us a call at Freedom Factory. Thank you so
much for watching. Please hit like and subscribe and we’ll
see you soon.
Hi everybody. This is Robert from Freedom
Factory and I want to talk to you about it a pretty serious topic
today, and it’s the biggest reason that deals don’t close. Now,
personally, my close rate on deals has been really strong over the
last 10 or 15 years, but I see a lot of people, you know, the
industry standard, they close less than 50% of deals.
So, it’s almost unbelievable when you think 50% of people that
agree to pay a price for a business don’t actually buy it. And I
want to jump into why that is, and more importantly, how can you
can make sure that doesn’t happen to you. So first of all, when the
biggest reason that I see that deals don’t close is usually when
the numbers drop off a cliff.
And the reason that happens is because the entrepreneur is
trying to do too much. So as running a business as an entrepreneur
takes a lot of work, and when we sell a business, we’re partners
for a short period of time. I talk a lot about our 147-day selling
process and a lot of times it works in that time. Sometimes it
takes a little bit longer, sometimes or even faster. But the number
one thing when we’re selling your business is to let us do our job
as you have to do your job and make sure the numbers are still
going on the same trend line that they were. If you’re growing at
3% a month. The this time can be the absolute most important time
for you to do it. Not only because you get paid the best. What that
means, for example, let’s say, you’re selling your business on
earnings and you’re getting a multiple of five times earnings. When
you sell it, you’re actually getting paid six times on every sale
you ever make, which means you’re getting paid once in the cash and
five times you’re earning is when you sell it.
Now, if you were making six times your usual value when you sell
a business, do you think you would sell harder? I sure would. And
having the right broker and the right partner to be able to sell it
for you, we’re going to handle the process. We’re going to handle
the phone calls. We’re going to handle the Q and a, the
diligence.
We’re going to prequalify your buyers. We’re going to take all
that off of your plate. In fact, until the buyers had been
prequalified, and we have an LOI on the table, we don’t even put
them on the phone with you. We want to preserve your time as much
as you can so you can run your business as profitably as we can,
and we can do our job.
And again, what we do at Freedom Factory is make sure to build
as much deal tension as we can. So that’s getting the most people
introduced to the business, either through a combination of inbound
or outbound and marketing materials going through a Q and A process
and getting all the buyers to go to our process, meaning the
sellers process.
We do Q and A here. We do prequalification here; we do LOI’s
here. We start to go through and we get the funnel and we find the
perfect buyer and the perfect fit for you. Bottom line is the
partnership’s pretty simple – for the next year, you run your
business, we focus on selling your business.
When you’re talking to a broker, you’re making the right decision.
Try and find somebody that’s not just a sales guy or just sells
businesses for a living. Find a career entrepreneur; someone that
speaks entrepreneur, somebody that understands that. Just because
you’ve built the business and got it to here doesn’t mean that you
want to run it for the rest of your life.
Sometimes as entrepreneurs, I look at us as the producers or the
builders or the contributors, and, and if I’m not on point and on
passion in my business, you can feel it. And it’s not the same
thing. And so if you’re an entrepreneur that has a business that
you’re no longer passionate about, just because you took the train
to Chicago, doesn’t mean you want to drag the train around with you
once you get there. Give us a call and we’ll be able to help figure
out the best way for you to transition to something you are
passionate about so you can build massive, massive value.
One other truth is that time kills all deals. And every deal
goes sideways. We have buyer’s remorse. People often talk about
it’s the house as the biggest purchase you ever going to make.
Well, that’s not true if you’re buying or selling a business. Often
for me, buying and selling a business is the biggest purchase, or
is the biggest purchase or sale that my clients are ever going to
make.
And the more time you have, more likely the buyer is to have a
little bit of buyer’s remorse. Or if one little thing goes wrong,
maybe they latch onto that, we have a bad month or bad week, and
they use that as an example of why the business isn’t as good as
they thought they would. So at the best-case scenario, they’re
going to try and buy it for a little less of a price, which isn’t
going to feel good to you, the seller, or to me, the broker. And
the worst-case scenario is they just back off and they go dark and
they don’t want to do it and they pull it out of escrow, and then
we have to begin the process all over again.
So again, when you, when you look at these types of things, what
I’ve found in 20 years of doing this is every deal is going to go
sideways at least once. And that’s where my experience comes into
play. That’s where we can get it through. I’ve seen deals go
sideways for every reason you can think of yet I still get
surprised and see new deals go sideways all the time. We’ll get you
through it. We’ll keep a smooth, steady hand. You keep running the
business and keep the fundamentals going up and up and up, and
we’re going to sell your business for more than anybody else in the
marketplace.
Now, if you have any questions on selling your business, why
deals go sideways or what the process looks like. Why don’t you
give us a call at freedom factory? We’ll talk you through that and
any other questions that you might have. Thank you so much for
watching. Please like and
subscribe and we’ll see you soon.
A seller’s goal is to close the deal the soonest time possible. Great deals are a win-win situation for both the buyer and the seller. However, selling a business is not always a smooth sailing process. There are factors that cause the deal not to push through. As a seller, it is a must to know what these reasons are and avoid them as much as possible. It only takes a single mistake to break the entire deal.
The good news is there’s a lot of value to be
