The Amazing Exits podcast has over fifty episodes of fascinating interviews and stories told by successful entrepreneurs, aggregators, brand owners, and more. There are many lessons to be learned in these podcasts, and we have compiled five of them.
Five Valuable Lessons Learned on the Amazing Exits Podcast
Here are five lessons that we learned from our guests here on the Amazing Exits podcast:
1. If you want to eventually sell your business, keep things simple
Aggregators like simplicity when purchasing a business. So, set your company up now to ensure it’s easy to buy later. This includes:
- Using white-hat tactics only.
- Ensuring all legal matters are resolved and have complete documentation.
- Separating your brand account from your personal account.
- Streamlining manufacturing, packaging, and shipping.
- Documenting brand revenue and profit margins.
- Keeping other brands or businesses that you may want to sell separately on separate accounts.
- Getting your financials in order.
- Documenting any one-time expenses that could be included as an add-back.
Reference: Podcast Episode 55
2. Determine what an amazing exit looks like to you before putting your business on the market.
Before seeking a buyer, determine what the most important aspects of a contract would be for you. This allows you to compare offers, decide what makes one offer better than another, and negotiate that aspect.
For example, one brand owner sold his company to the buyer with whom he could negotiate the performance payment. This allowed him to realize a higher earnout after signing the contract.
Reference: Podcast Episode 51
3. Are you 12 months or so out from a sale? Here’s what you can do:
- Optimize your business for best value.
- Shave off all of the expenses you possibly can.
- Determine whether you will realize a profit on any product launches before the end of the year.
- Have products researched and ready to go – but hold off on launch if the launch will cut into your profitability.
- Get your financials in order. Prepare them now and keep up with them each month.
Reference: Podcast Episode 51
4. Go for building a million-dollar (or more) business before your exit.
In an interview with Ryan Daniel Moran from Capitalism.com, we discussed how to build a million-dollar business. Ryan lays out what a brand owner needs to do to get there. Here are the steps:
1st: Produce a product that sells 25 units daily.
2nd: Release three more products and sell 25 units of each daily.
3rd: Get the average customer value to $30.
There are many ways to do the above and, often, the key is finding a niche for your brand that has room for 100 sales a day at an average value of $30/each. You may need to create ancillary products or products that support your hero product – and then add another hero product or even rebrand or repackage the best seller.
The key is learning and growing as a business owner until you reach the metric that means success for you.
Reference: Podcast Episode 52
5. Understand all of the terms and nuances of the contracts typically offered by aggregators.
Aggregators most commonly offer an asset purchase agreement. The amount that they offer is based on many factors including:
- SDE (seller discretionary earnings)
- EBITDA (earnings before interest, taxes, depreciation, and amortization)
- Market interest
- Their determination as to whether they can rapidly grow the brand
On the other side of the coin, the brand owner/seller needs to understand:
- SDE and EBITDA
- Any add-backs
- Stability payments and holdbacks
- Tax implications
The mergers and acquisitions world is much different than the world of selling on Amazon. Get specialized knowledge by talking with experts and educating yourself. Not only do we recommend our podcast to help you get a glimpse into the world of exits and aggregators, but we also recommend Joe Valley’s book The EXITpreneur’s Playbook.
Reference: Podcast Episode 43
There are many more lessons to learn from the Amazing Exits podcast. We have interviewed notables in the industry, from aggregators to successful sellers to brokers.
If you are interested in making an amazing exit from your business, set up a call. We would love to talk with you.