How to Sell Your Business to a Strategic Buyer

How to Sell Your Business to a Strategic Buyer

 
 
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Have you ever wondered what the perfect strategic sale looks like? On today’s show, we’re going to be talking to Josh Elizetxe, who was extremely successful at managing his company at a very young age. Within six months of deciding to sell, Josh successfully created a market and sold his company to one of his strategic partners. He’s going to share some of the best wisdom and insight that we’ve had on this show. Tune in to learn what Josh learned, what he’d have done differently, and what he’s up to now.

In this episode, you’ll learn:

  • When Josh decided to become an entrepreneur and how he decided to take the lead in his venture.
  • Some of the goals Josh made and milestones he met as he snowballed his company from startup to success.
  • Some of the benchmarks that Josh had been tracking mentally so he knew he had gotten to the point where it made sense to sell.
  • The trigger when Josh knew that he was not doing what he should have been doing.
  • How Josh managed all of the factors that go into the decision to sell, the tactical strategies he used, and his tips on making the transition.
  • Thoughts on valuing a company and setting a price, as well as convincing a potential buyer that the company is worth that price.
  • How Josh picked the partner he picked and how he removed emotion from the decision.

How do you value the power of your own two hands? Josh Elizetxe learned just how valuable building something from nothing can be, particularly in the digital world. Today’s podcast explores how to properly build a successful and profitable business out of nothing and capitalize on its specifics for a strategic sell for the highest dollar.

What do you need to do to be a successful entrepreneur?

Simply put: work for it. Josh poured all he had into his work. Starting at the age of fifteen, Josh immersed himself in his hobby of computers (learning about them, playing on them, and eventually building websites on them) until he was a master of his craft. It took time, energy and prioritization.

What Makes You Unique?

Josh was surprised to hear from advertisers after he started his blog. He had built something for himself which was a labor of love — his first blog was about the new iPhone coming out (which he coveted) and was the tech review that has become standard today. He was before the curve. This is vital in being successful, we all know, so how can you take the product you have (or hobby or service) and capitalize on it? This is your time to shine. Find what makes you unique in the market and customize what you’re offering to further help yourself stand out.

Josh did this by accident. But he capitalized on it with intention.

Say Yes

After he built his first blog site for himself, he started hearing from advertisers. This was at a time when the Internet was still an enigma and there was no trust in transactions conducted on it. Typical of most teenagers, Josh ignored the advice of his father and agreed to take the money offered by this Internet-unknown.

As a teenager, Josh had no concept of recurring revenue — he thought he would be receiving a one-time payment. When the money came through once, then twice, Josh realized he could make some significant cash off his site. He could buy his iPhone, perhaps a car… and if one website was making him this kind of money, why not two?

Josh recognized opportunity. He started curating and advertising on multiple websites. To do this, he had to learn new things each time. But he said yes to every opportunity that came his way, and figured out the ‘how’ after.

Follow Through

So you said yes. Now you need to back it up. Josh grasped onto each opportunity not only for its monetary infusion, but also as a chance to learn and do more. When Josh built his first website, he went to the library at his school and read everything he could find on how to build a website. When he was offered money for advertising on this site, he learned how to build a banner ad. When he was asked to build a website for another person, he expanded his base website knowledge and learned how much to charge for this service.

You’ve got the idea. Say yes, then follow through. Learn everything you need to know to successfully deliver on your promise. If you don’t have the time or skills yourself, build a network. Find those who have these skills or expertise and recruit them or get them to mentor and teach you. Utilize freelancers or hire into your business. These skills are invaluable and the more you can learn about all the areas that impact your business, the more valuable your business becomes.

Be wary, however, of giving away your agency to the wrong people. Josh made the mistake of letting someone else manage his money and it negatively impacted him. What he learned from it was that he needed to stay informed and be in control of what he was doing with the heart of his business. When you choose to outsource, vet your choices and don’t be caught completely ignorant of the situation. In Josh’s own words: A fool and his gold are invited everywhere.  Choose people whose self-interest matches your own and you will see greater success and build trust.

If you’re offering a complete product or service, you are far more appealing as an acquisition. Not to mention the edge you have in any conversation — you are flexible, knowledgeable and dependable, and your target clients will recognize this.

Competitive Edge

After you have all the elements you need to offer the best value possible, you have to price your product or service. Josh underscores the concept that working for less than your competitor and providing top-quality service creates another type of value: word of mouth. Intangible assets and goodwill go a long way in building a successful business.

If you want to build something, be prepared to give a little more than you get — especially in the beginning. You need a foundation before you can build a sky scraper.

Put Your Money Where Your Mouth Is

And then, once you’ve built up your base business, you need to be reinvesting in it and pushing it to grow. As Josh says, you need to throw your money at it to keep it growing. If you want to see progress in your bottom line and concurrently in your ceiling, you need to put more capital down to add services, products or people that will help you achieve this.

This circles back to the first concepts of finding what makes you unique, saying yes and following through. You need to keep reinventing yourself to ensure you’re staying competitive and current; you need to recognize your opportunities and not be afraid to go after them (whether this is expansion or re-tooling); and you need to keep up the quality by ensuring everyone knows what they need to know and has the skill set to support the business.

Learn How to Anchor

Don’t be afraid to throw out the first price point. Show them the numbers — show your impact. How much could you hurt the competitor with your product or service? How much could you earn each month? Tell them what you can do, and then follow through.

Anchor it (plant the seed), test it (prove the worth) and sell them on the dream as it applies to them (make it realistic). 

Take these components to build your path to a successful exit that you can strategically present to the right buyer so you get the most money possible for your hard work. Never be afraid of an exit — chances are you can build another business or stay on in this one if you really want. An exit is another opportunity, so say yes and figure it out.

Takeaways:

  1. Really knowing and understanding the value of your business gives you an amazing amount of control.
  2. Find people who align their motives with yours: When you don’t realize exactly what’s driving behavior, you don’t have control and ownership of the situation.
  3. Understand yourself and what makes you happy. Figure out what is most important to you and make time for those things.

Links and Resources:

Josh on LinkedIn

Josh on Quora

Principles

More About Josh:

Josh Elizetxe is an Internet advertising veteran and successful serial entrepreneur. Last year, over 100,000,000 people interacted with websites and brands owned by Josh’s company. He serves on the board of the Phoenix Coding Academy and the Fleischer Scholars Program. Josh is a sought-after company advisor and Angel Investor in the software (SaaS), ecommerce, and advertising technology industries.

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