026 - Build a Business to Sell with Larry Hughes
Even if you aren’t planning to sell your business in the next year or two, you have GOT to listen to this interview with Larry Hughes. He breaks down all of the things you need to do to make your business sellable so that, when the time is right, you can bring buyers to the table.
(Pssst! These are things that will make your business healthier, more stable, and more profitable RIGHT NOW too!)
Show Notes
Who is Larry Hughes, and how does he help business owners? (1:40)
Why you need to do a valuation of your business before you sell. (8:56)
Common reasons business owners sell their business. (13:36)
Does your business have value? (19:49)
5 things you have to do to create a highly valuable business that someone will want to buy:
Operating margins above industry standards. (22:00)
Strategies for improving your margins. (29:22)
Have a stable, motivated management team. (33:55)
If you already have a great manager on your team, how do you keep them? (39:00)
How do systems help make your business “buyable?” (41:31)
Systems that support sustainable cashflow. (45:59)
Realistic growth strategy. (48:20)
Diversified customer base. (51:15)
How to protect yourself from Godzilla. (52:28)
Who buys businesses, and why do they buy them? (57:48)
Scenario: You’re a business owner and you’re looking to grow by buying another business. What should you be looking for, and what are red flags that should cause you to steer clear? (1:07:29)
What are you actually buying when you buy a business? (1:10:53)
How is business valued? (1:12:08)
Where do you find buyers? (1:20:15)
If you want to sell your business, good books are SO important! Here’s why. (1:24:10)
We’ve been hearing about Cliff the whole episode... What ended up happening with his business? (Spoiler alert: it’s good!) (1:29:07)
When should you start planning for selling your business? (1:36:18)
Ethan’s Insights — What are the most important things from this info-packed interview with Larry Hughes? (1:37:06)
Quotable Moments
“We all know that there are two things that are definite in this world. One is taxes, and one is death. But for business owners, there’s a third, and that is that one day, they’re going to leave their business.” — Larry
“When you build a business to sell, you’re also building a business that you might choose to keep because it’s making extraordinary income and it runs relatively hands-off... which is what makes it attractive to buyers.” — M
“Value is all wrapped up in one key item, and that’s cash flow.” — Larry
“Cut costs, not corners.” — Larry
“It’s so important that you are NOT the key guy in every aspect of your business.” — Larry
“Sometimes a little too much money is not good for a business owner because he makes a decision without planning.” — Larry
Resources
5 Things to Do to Create a Highly Valuable Business infographic
IBIS — Look up your industry standards, from gross margins to employee costs
The Profit Problem by Martin Holland
More from Larry at thehughes-group.com
Call Larry directly at (405) 478 - 3800
More from Martin
More from Khalil
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