The Bookworm – Part XX by Ben J. Pritchett
I’ve been writing these articles for about three years now, and I’m finding topics and books worth revisiting. Let me start by saying that I’ve always been a consultant or coach I started right out of college nearly 30 years ago.
Along the way, I’ve owned several businesses and helped clients start dozens of others. I’ve coached many more through growth and expansion. Sadly, I’ve also seen the demise of a handful along the way too.
One of my most disappointing business experiences was when I owned a business brokerage. It was a mercifully short experience, as much about lousy timing as anything else. Let’s just say that owning a business brokerage in 2008 when the financial markets collapsed and banks locked their vaults tight was not the right time.
Here’s the thing, though, I had a plan. I still think it’s a good plan, and I presented it at a coaching conference in Cancun a year and a half ago (ah, the good old days when we could travel freely).
It goes like this:
Find businesses that are a few years away from a sale. Those with owners who are thinking of their exit but still with enough vim and vigour for one last push for excellence (and a well-funded retirement).
Work out plans and milestones to get the business where the owner needs or wants it to be for an ideal sale. Set fees accordingly. Ideally, there would be a base rate and contingency fees tied to growth.
Help guide the business through a sale and transition to a new owner. In the ultimate deal, you, as the coach, would get cut of the increase in the business’s value and have the vendor require the new owner to retain your services as a condition of any vendor takeback financing.
This magazine is called The Six Figure Coach – and that’s a six-figure strategy all from a single client – it could even be a multiple six-figure strategy if implanted well in a business with enough upside potential. Imagine having a few of them!
I’ve known hundreds of business coaches over a nearly 30-year career. Only a handful of them have been heavily motivated by money! I don’t think any of us are against making good money, but it can’t be the only thing that gets us up in the morning.
This three-step strategy solves many of the problems that plague coaches. It makes for a long-term client relationship, which reduces churn. It creates the opportunity to earn above-average fees. It saves families and ensures business longevity by helping businesses transition from one owner to another.
Here’s this issue’s recommended reading:
By John Warrilow
All of Warrilow’s books pertain to maximizing a business’s value and getting it ready for sale. In the list above, the books are shown in the order they were released – Warrilow himself says he should’ve written The Automatic Customer first, so judge yourself accordingly. I recommend you read them all.
As a business coach, these books are filled with ideas you can implement to help grow your clients’ businesses or your own, for that matter. In particular, read what he has to say about how alternate income streams result in different valuations. For example, subscription-based revenue derives higher multiples than a business that relies upon individual sales.
His latest book, The Art of Selling Your Business, is packed with examples of both good and bad business exits. If you’re going to help your clients pull off successful transitions, you need to know the best strategies to make them happen. Learn how others have made it work and learn what to avoid.
by Richard E. Jackim
This book is getting a little old now, and there are US and Canadian editions. It was published in 2006, but here’s the problem: the book came out a couple of years before “the Great Recession,” which resulted in something of a “pause” in business sales and transitions. Hundreds of business brokerages closed down, and business financing evaporated. People who planned to sell could not.
The world was regaining some level of normalcy; small businesses were up for sale again; liquidity for main street deals was finally available again; then along came COVID-19, and the business world is on pause once again.
Demographics march on – businesses may be on pause again, but their owners aren’t getting any younger. You only have to look at the number of boomers who are now seniors to know that more business owners are feeling desperate to sell every day.
by John H. Brown
The title of this one says it all, but it’s still really a primer. Nothing beats experience when it comes to the buying and selling of businesses. Use this and the other books to get yourself started.
If you can find a good Business Broker to work with, you’ll be golden, but be warned that most are transactional, similar to real estate agents, they may not like or understand the long-term relational model I’ve described. I’m sure there are a few out there, so it’s worth the effort to initiate that search today.
Final Thoughts …
To me, this is the ultimate plan and ideal opportunity for business coaches. If it appeals to you, read these books and put the strategies to work. Good luck!
About Ben J Pritchett
Ben J Pritchett started his first business at the age of 15 and began his own consulting practice in 1991. For over 25 years he has worked with clients in many industries including restaurants, direct sales, software development, tourism, dimension stone (granite quarrying and manufacturing), aviation, and optometry, just to name a few. Companies coached by Ben have nearly doubled and tripled their revenues in a single year.