Part 3: What can I do to sell my business?
After the story of the Facebook campaigns I just talked about, a customer called me and said, “That's it. I don't want to wait for my phone to ring. I'm doing something. I'm looking for someone who can help me.
So I called you. I don't want anything for free, because no one earns like that. I want someone who has at least an idea of what he does and does everything he can. I am sure the results will come. I ask you directly: Can you help me?”
I really liked how he posed the problem.
Honest, direct, and with normal pretensions.
His name was Dan.
That's when we decided we only needed customers like him.
I honestly wanted to help him, without selling him a single thing.
So I told him how I would do it, being at the beginning of my road in this field.
The "recipe" is simple. You could do it, too: every day you contact a potential buyer for your business. Just one a day. In one month you will contact 21-23 investors.
I thought it was an OK idea.
For a start, you need to know that the people closest to your business have the best chance of taking over your business. This is because they already know your business or they know you.
So you can start making a list of such people.
It starts with employees (yes, it sounds weird, but they could be the best buyers of your business), with customers, suppliers, and other third parties you have some contact with.
Then you can continue looking further, in different fields of activity. You can use your creativity to imagine why a certain company in a certain field might be interested in taking over your business.
For each company, try to find the decision makers. Sometimes it's easy, other times it's not. Then call them.
It should take no more than 1 hour a day.
Dan listened to me to the end and then asked me to do all these things for him.
That's how I started.
It's another way again... you know now... we zig when others zag.
Honestly, this way of selling a business is not ideal either. In fact, nothing is ideal.
All things have their advantages and disadvantages.
We named this way to sell a business: CONTACT 20.
The problem is that the investor who is interested in taking over your business knows that he is probably your only option.
By the time you find another investor next month, he may lose interest in taking over your business.
Thus, you can run month after month for 1 investor, without taking any decisive step for the sale of your business.
The best solution we found to solve this problem is to contact 60 investors every month for the first 4-7 months, in order to simultaneously have 2-3 potential buyers.
Once we have found a short list of about 5-7 investors who know that they are in competition with each other, we will be able to reduce the monthly searches by contacting only 20 investors.
But some choose to continue with 60 until the sale is completed.
Why do we keep looking until the end of the sale?
To always have other possibilities, preparing for the situation in which all 5-7 or more would withdraw.
And, to maintain the bargaining power both during the due diligence phase and at the final negotiation.
For us, this method fits perfectly.
The success rate is around 25%.
Compared to the success rate of only 2-3% in the case of online ads, this is 10 times better.
The time required to sell a business is about 9-11 months. About half of the time recommended by those with online ad platforms.
This depends on several factors.
We can control two of these factors. One is the seriousness (actually routine) with which we do our work, and the second is the number of business sales we deal with at a given time.
For this very reason we have chosen to stay small and limit the number of businesses we deal with to only 24 per year.
Sell your business by contacting only 1 investor per day.
We started this activity with Dan's proposal, deciding to continue looking only for clients like him.
We contact 60 investors in the first months so that those interested remain eager to take over the business offered.
Contact 20 (the name we give for monthly contacting of 20 investors) is 10 times more effective than online ads.