How to Build a Business and Sell It for Millions

by Jack Garson

Overview

In How to Build a Business and Sell It for Millions, MBA meets Main Street, with a combination of inspiration and invaluable practical advice.

Finally, the positive economic news every businessperson is waiting to hear. Jack Garson says the long economic downturn will give way to a major buying spree by cash-rich companies—and they could be in the market to purchase your small or medium-sized business. It's the ultimate payday for everyone who wants to live the American dream, whether they're starting a business or already own one. Millions of dollars are on the table. But will you and your business be ready?

How to Build a Business and Sell it for Millions is a must-read for every business owner and would-be entrepreneur. In entertaining and elaborate detail, Garson outlines the vital moves your company needs to make to become an attractive acquisition by other firms:

· Do you have a competitive edge that sets you apart from your competition?
· Are both you and your company sustainable and able to outlast the bad times to become a success?
· Can you stop being a "Derek," the boss who suffers from "Founder's Dilemma," micromanaging everything
big and small?

How to Build a Business and Sell it for Millions uses real life examples to explain how the goal of selling your company needs to be linked to every business decision you make: hiring, compensation, contracts, financial reporting and dozens of other areas often overlooked by busy entrepreneurs. While many business owners struggle to get to the next day, Garson has the inside scoop on achieving the opportunity of a lifetime— selling your company for vast riches.

Product Details

ISBN-13:	9781429961721
Publisher:	St. Martin's Publishing Group
Publication date:	03/16/2010
Sold by:	Barnes & Noble
Format:	eBook
Pages:	268
File size:	729 KB

About the Author

Jack Garson writes from the trenches of the business world. As founder of Garson Claxton LLC and leader of his law firm's business group, Jack has guided companies from start-up all the way to the celebration dinner following the big sale. His extensive understanding of the business world is why he's sought after to be the lead negotiator in multi-million dollar sales of companies. Jack also serves as legal and strategic advisor for numerous national, regional and local companies, helping them overcome challenges, grow, succeed and sell.

In addition, Jack is a director of the prestigious Metropolitan Washington, D.C. Airports Authority, which oversees Dulles International and Washington Reagan National Airports. He writes a monthly column for SmartCEO magazine, a leading business publication in the Washington, D.C. region. Jack graduated with honors from both the George Washington University National Law Center and the University of Maryland.

Read an Excerpt

1Planning to Sell
Putting the Horse in Front of the Cart
America has hunkered down. People have cut back wherever they can. Folks are brown-bagging lunch—if they still have a job. They’re cutting their own lawns and one another’s hair. Families take in-home “staycations” instead of trips to Disneyland.
Your moment has arrived.
You may have always wanted to start your own company. You may have just gotten fired and have no other choice but to go into business for yourself. You may have a business that isn’t growing and needs fixing.
Perfect timing.
Building and selling your own business has always been one of the greatest paths to wealth. Now it’s the opportunity of a lifetime. This is the best time in decades to plunge in. As the economy revives there will be pent-up demand for what businesses have to sell. Better still, people with briefcases full of money will be clamoring to buy those businesses.
But it’s not enough to build your business now and worry about selling it later. From day one, you need to know what buyers want to buy and then create it. You shouldn’t knock yourself out for years building a business only to discover you can’t sell it. Planning to sell—from that very first day—is putting the horse in front of the cart.
The Coming Boom:
Making Your Fortune in Business
The next big thing in business is starting your own company, building it up, and selling it for a bundle. When real estate crumbled in the early 1990s, investors ultimately turned to technology companies and created the dot-com boom. When that boom went crash, investors renewed their love affair with real estate—and thus was born condomania. It felt like there were more construction cranes in Miami and Las Vegas than tourists. Now stocks and real estate have plunged once again. Battered investors are not about to fall madly in love with either of them for a while. Personally, I’d rule out comic books, baseball cards, and Beanie Babies, too.
Making money the old-fashioned way, by starting a business, growing it like crazy, and then cashing out, is about to come back into style.
If you’re wondering if the timing is right, consider this: At this writing we are in the worst recession since the Great Depression. Throughout history, though, some of the most successful businesses were created in the most difficult of times. General Electric was formed by Thomas Edison during the six-year recession called the Panic of 1873. Disney began business in the recession of 1923– 24. Hewlett-Packard was started at the end of the Great Depression. It only stands to reason that a company that succeeds in dire circumstances—when so many others fail—will thrive in normal times and excel in boom times.
Now consider the buyers of businesses. In recessions, they conserve cash and maybe even run out of it. Certainly they get cautious. So they slow down and even stop buying businesses. Coming out of a recession, they’re looking for steals. They start buying companies again—but just the best businesses and only at bargain prices. Buyers make a killing off those early deals. Then, pumped up by those lucrative returns, they broadcast their success to attract acclaim and investors. Thus the gold rush begins. Other buyers stampede onto the scene, looking to strike it rich buying companies.
The business sales in the next few years will bring on a mad dash of buyers and deals that get better and better for sellers. If you start now, you’ll be in a position to sell at an extraordinary time.
Planning to Sell
Planning to sell is all about building—from the very start—a business that people want to buy. The folks who purchase companies don’t want a business where every customer asks for you and you’re long gone. They certainly don’t want a business that, as harsh as it sounds, dies with you. They want an enduring institution, a reliable moneymaking machine that will grow and last.
Of course, you don’t need to build up your business or sell it. You can run your business so that it meets your everyday desires, whether that means golf every afternoon and poker every night or just enough money for Cheez-Its, lottery tickets, and cable television. They even have a name for that type of business—a “lifestyle business,” because it prioritizes your lifestyle over your company. You can run your business like a hobby. You can live a decent life as chief bottle washer and cook. You can even put a bullet in your business when you retire. Life is full of choices.
But to get all of the possible value out of your business—to increase the chance you’ll achieve enormous wealth—you need to build something that you can sell. You need to create something that buyers compete to buy.
Buyers look for a lot of things, but at the very top of the list are the following:
PROFITABILITY: A business that consistently makes money. Ideally your profits increase every year.
COMPETITIVE EDGE: A business that beats the competition. Face it: once you’re making money, you’ll attract rivals. Buyers want to make sure that competitors can’t duplicate your success or cut into your profits.
SCALABILITY: A business that can grow bigger. Buyers want to increase the size, revenues, and profits of your company. The decisions you make from the outset, from how you form your company, to the equipment you buy, to the brand you establish, all affect “scalability”—the future ability to grow your business. If you want to sell for big bucks, you need a company that can get big.
SUSTAINABILITY: A business that can make it through adversity. You may not have enough capital. You may not back up your computers. You may not even have employees who can do your job if you get sick. But if your company can’t withstand a few disasters, you’ll never be in a position to survive, much less sell. Buyers don’t want a company that tumbles like a house of cards in the first heavy breeze. They’re only going to pay a lot if you’ve built a company that can make it through tough times.
There’s more. There’s picking the right legal structure for your business, creating financial systems so you can manage your business, avoiding unnecessary risks, preparing good contracts, marketing, government relations—and more. There’s learning the way businesses are sold, how to assemble the deal team to sell your company, and how to negotiate the sale itself—and more.
Building a business, overcoming problems, and selling your company present countless challenges. But you don’t have to do it the hard way.
The Easy Hard Way
I’ve seen sweat on the foreheads of great business leaders struggling with momentous decisions. I’ve sat in thousands of boardrooms and business meetings where entrepreneurs agonized over issues that would determine the fate of their companies. I’ve seen their responses yield victories and defeats. In the lessons that follow, you’ll see and learn from their successes and failures.
With the guidance in this book you can learn how to build a business that sells. This is the insider’s guide to what works and what doesn’t—what you need and what you need to avoid. Selling a business can be hard. But it’s not hard to sell a good business.
Excerpted from How to Build a Business and Sell It for Millions by .
Copyright © 2010 by Jack Garson.
Published in March 2010 by St. Martin’s Press.
All rights reserved. This work is protected under copyright laws and reproduction is strictly prohibited. Permission to reproduce the material in any manner or medium must be secured from the Publisher.

Table of Contents

Introduction xi

1 Planning to Sell 1

Putting the Horse in Front of the Cart

2 Profitable Business Model 6

Making Money Every Time

3 Your Competitive Edge 14

What Makes You So Special?

4 Scalability 17

Because Size Does Matter

5 Bench Strength 24

Your Executive Team

6 Sustainability 32

Surviving Until You Succeed

7 Personal Sustainability 41

Playing Until You Win

8 The Vision Thing 45

Having One and Sharing It

9 Values and Culture 51

Profit Rules

10 Overcoming Self-Destructiveness 61

Your Worst Enemy

11 Inc., LLC, or Partnership 68

The Right Structure for Your Business

12 Financial Reports and Forecasts 80

Where You've Been, How You're Doing, and Where You're Going

13 Payday 89

Yours and Your Employees'

14 Risk Management and Compliance 100

Avoiding Bad Stuff

15 Implementation 109

Better to Implement a Good Plan Than Seek a Perfect One

16 Contracts 113

Because a Handshake Won't Do

17 Marketing 121

It's Not Who You Are. It's Who They Think You Are

18 Government Relations 126

Making Friends in High Places

19 Don't be a Competition Factory 130

Carrots and Sticks

20 Letting Go 137

Can you?

21 For Sale 141

An Overview

22 Key Terminology: 101 145

Talking the Talk

23 Investment Bankers 153

Dealing with the Deal Makers

24 Surveying the Market 160

Identifying Prospective Buyers

25 The Price 165

Valuation Methods versus Your Guess Is as Good as Mine

26 The Book on Your Business 173

What Your Company Needs to Be a Bestseller

27 Dogs, Ponies, and the Deal Team 179

Taking Your Show on the Road

28 The Best Way to Sell Your Company 185

The Art of Creating an Auction

29 Strengthening Your Bargaining Power 190

Boosting Your Leverage

30 The Letter of Intent 192

Picking a Winning Battleground

31 The Deal 197

What's in it for you?

32 Tax Consequences 203

The Deal within the Deal

33 Post-Sale Terms 207

The Deal after the Deal

34 The Documents 213

Praying over Commas

35 Due Diligence 219

The Business Version of a Cavity Search

36 The Deal's Done Being Renegotiated 224

Beware the Retrade

37 Dead Deals 230

Picking Up the Pieces

38 Last-Minute Surprises 233

What the Hell!?

39 The Closing 237

Great Expectations

40 Now What? 241

Who Am I? And What Am I Doing Here?

Index 245

Editorial Reviews

Have you ever dreamed of playing golf everyday with poker every evening, spending more time with your family and friends or putting the stresses of commuting and running a business behind you? How to Build a Business and Sell it for Millions is the book for you! This is the definitive work on starting, building and, if so desired, selling a business of any kind.  It is a bible for entrepreneurs, CEOs and dreamers alike, even in this recession… Most assuredly, anyone who picks this book up will be captivated until the very end!”—Sacramento Book Review

“Jack Garson delivers a lean and mean picture of what’s really going on when you read the headlines about the latest startup purchased for a mint. If you’re ready for something beyond ’sell sell sell’ and ‘think big’, read this guide and take the trip.”—Baronmiller.com

“I highly recommend the essential and very readable book How to Build a Business and Sell It for Millions by Jack Garson, to anyone considering starting an entrepreneurial venture, is currently operating a business, or who is contemplating the sale of their company. The information found in this book is valuable at every stage of a company's life. At the same time, the advice provided by Jack Garson will ensure a successful start up even in today's difficult economy. Indeed, the techniques presented in this book will work especially well in a weak economy as the new business will be utilizing systems that will out distance the competition.

Read the excellent book on building and eventually selling a successful company How to Build a Business and Sell It for Millions by Jack Garson, and create the business of your dreams and sell it for millions of dollars. This book will start you on that wonderful and rewarding journey”—Blog Business World Review

“As a TV producer, I know business. As a TV host, I know entertainment. This book is perfect in both areas. It’s incredibly informative and entertaining. Jack Garson makes Business: Possible.”—Marc Summers, president of Marc Summers Productions Inc. and host/executive producer of Unwrapped and Dinner: Impossible on the Food Network

“Anyone who aspires to achieve the American Dream will love How to Build a Business and Sell It for Millions. With the rare combination of a breezy style, solid expertise, and an encouraging tone, Jack Garson answers any question you could possibly have about starting a business and becoming a successful entrepreneur. Reading the book, you can’t wait to get started.”—Ronald Kessler, bestselling author of In the President’s Secret Service and The Season: Inside Palm Beach and America’s Richest Society

“As a veteran entrepreneur and venture capitalist, I wish I had this book years ago. The material in it is exactly what we try to tell folks who come to us for venture money. It clearly spells out the basics that every successful entrepreneur must master. Every would-be entrepreneur needs to curl up in bed with this book before starting a business.  Jack Garson is smart, knowledgeable, experienced and explicit.”—Charles D. Snelling, entrepreneur and venture capitalist

“Jack Garson’s advice and experience is worth a fortune! I know, because he helped lead my company to success—and then I sold it, for much more than I ever imagined. Everyone who wants a better business must read his book.”—Walter Kennell, former owner of Soil Safe, which sold to an affiliate of Texas Pacific Group

From the Publisher