What important truth do very few people agree with you on?
Good financials and financial intelligence is the most overlooked and underutilized opportunity for 6 and 7 figure bootstrapped businesses.
The Most Valuable Asset for Your Business Sale is Not What You Think
It was a warm and sunny afternoon in Ho Chi Minh City in March of 2017 when my career took an unexpected turn.
After exchanging pleasantries on a call catching up with my business partner, Travis, he drops a bomb...
Travis: [BUYER] may be interested in buying our business.. What do you think?
Travis: Yeah, [BUYER] reached out to me saying he was interested. Are we?
At first, my mind is panicking..
This was NOT the plan.. We are still in the middle of building the business!!
Then I start running some rough calculations about how much the sale would be worth...
...and I warm up to the idea ;)Travis cuts back in...
Travis: So what do you think?
Me: Ummmmmm.. I’m interested!
Three days later,I’m on a plane to China to meet with our potential buyer.
I showed up to our meeting the next day with as many documents and records as I could manage. This was the biggest negotiation and opportunity of my career...
There was some back and forth and questions. He asked me a lot about our revenue, profits, etc etc Fortunately, I had plenty of documents to back up all of my claims.
After a few days, and many more meetings, we came to terms on an agreement for (just under) one million dollars!
How did I feel??
Of course, I was grateful for the unexpected opportunity to sell.
But even more than that, I was grateful for the piece of my business that I frequently overlooked and neglected…
An area that I would have totally botched had it not been for my amazing team… Lucky.
Was it our products? Our customers? Our brand?
It was our financial records.
Without these, our buyer would have no way of knowing that the business was actually worth acquiring. Which means that without these, our business was essentially worthless.I spent so much time in my business that I never realized the importance of these records. I saw our weekly financial statements and our revenue numbers. I already loved and believed in my business.
But you can’t sell based on love and belief.
I felt so grateful that I had amazing and experienced people on my team that made sure we were on top of all of our financials so we could literally prove the worth of our business. Hard, objective numbers that were irrefutable.
Without that one crucial piece, the acquisition conversations would not have even taken place.
This was the moment that made me realize the necessity and importance of keeping good financial records for your business...
... and started me down a path that led me to understand that good financials and financial intelligence are the most overlooked and underutilized tools for small bootstrapped businesses like my own.
They say hindsight is 20/20… but what if there was a way to share my hindsight so other bootstrapped businesses never have to find themselves in a position where they want to sell, but simply don’t have the financial reports to back up and sort of claims about the value of their business?
I’ve been there. The reality is that most small bootstrapped businesses have so many things on their plate that they are not on top of their financials.
It’s easy to continuously move those pieces of the to-do list lower and lower until it disappears completely.
Until the day that it’s too late.
If they received a phone call from an interested buyer but didn’t have those records… that’s it. That opportunity is gone before they can even begin negotiations.
If you have any vision for scaling or selling your business, sound financial records are a necessity.
It is a NEED to have not a NICE to have.
Again, I was very lucky to have had someone on my team that had this foresight so we were able to take advantage of my acquisition opportunity.
Unfortunately, most other small bootstrapped businesses are not.
I know this because I’ve been helping other businesses get prepped and ready for a sale...
… And 8/10 businesses that think they are ready for a sale in reality are not.
It sucks for the owner...
They have poured their heart and soul into building a business…
They are proud of what they’ve built and accomplished…
They have finally decided they’re ready to sell…
… then they are told that they need to do more work just to get their business to a place where a potential buyer would even glance at it.
As I get more insight into more businesses I realize just how big of a problem this is.
And I get it...
Most small bootstrapped business owners are scrapy hustlers that find an opportunity and run with it to build a business.
Like me, they aren’t finance people.
Because finance skills are not what you need to get a bootstrapped business off the ground.
You need to be determined, energetic, self-starter and have faith in your vision to get a business started.
But what got you to Point A (starting your business) will not get you to Point B (selling your business).
In order to sell your business you need to be on top of your financials and records!!I mean… would you buy a business without looking at explicit numbers and growth over time? Nobody will love your business the way that you do… which means you need to have numbers to show them that it’s worthy of buying.
I got lucky with my acquisition in that I had the team that made sure I had in place what was needed to be able to sell. Their foresight saved me a ton of headaches and earned me a ton more money.
Without it, I would have been screwed.
So now I’m lending you my experience so you can learn from it while you still have time to get your finances in order.
Do the work now so you can be ready to take advantage of whatever opportunities that come your way…
Because not every opportunity comes your way twice!