Hey there, and happy Friday! Isn’t it the ultimate fantasy of (most) entrepreneurs to finally sell their business and kick back o n a sun-kissed beach? Sounds heavenly, right? Well, it is…and it isn’t. Today, I will guide you on my business acquisition experience. Not only will I be lifting the veil on the ups and downs of this journey, but I’ll also share exclusive insights into the obstacles I encountered I hope this offers you the unique opportunity to steer clear of them in your entrepreneurial journey. Whether you’re years away from selling your business or have a contract in place, this one is for you! Let’s dive in, shall we?
Key Takeaways
Start "selling" your business as soon as possible
Don't go straight to a broker, reach out to your network
Know your options when selling. What can/can't you write into the contract?
Who Is AJ Silber, and Why Should You Care?
2016: I started freelancing as a marketing consultant to pay the bills. 2017: I started to take things more seriously and decided to build a marketing agency. The Launch was born. 2017: I scaled my business to $10,000/month and hired my first full-time employee. 2018: We niched down into focusing on SEO/SEM. 2019: I rebranded the agency to The Guerrilla Agency, and we hit our first $1,000,000 in revenue. 2020-2022: I scaled the agency to several million yearly recurring revenue (YRR). 2022: I sold the business to a quasi-competitor in another state for multiple seven figures. If you’d like, you can read the full story here .
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Pro Tip #1: When you're selling your business, start getting ready for the sale 2-3 years in advance (or as early as possible).
- AJ Silber
What Can You Expect When Selling Your Business?
Disclaimer: This can go in dozens of ways, but this is a high-level overview. Step 1: You Decide to Sell – This could be due to various reasons, such as a desire to retire, pursue other business interests, or take advantage of a favorable market condition. Timeline: However long it takes you to decide Step 2: Get a Rough Valuation of Your Business – This involves a (quick) business appraisal. Typically, private businesses sell one of two ways. Multiple of EBITDA: (Earnings Before Interest, Taxes, Depreciation and Amortization). Multiple of Sellers’ Discretionary Earnings: EBIDTA but adding back in the owner’s salary as part of the valuation. Timeline: 1-2 weeks Step 3: Your Buyer Signs an LOI (Letter of Intent) – An LOI is a non-binding agreement that signals the buyer’s intention to purchase your business subject to due diligence. It outlines the basic terms and conditions of the purchase, including the purchase price, transition arrangements, and the timeline for due diligence. Typically, when a business sells the deal structure has some (or all) of the following: Cash upfront. Seller financing: You provide financing to the buyer. Earn out: You only get a portion of the cash based on pre-set growth metrics. Timeline: 1-12 Weeks (depending on how long it takes to find a buyer) Step 4: You Go into Due Diligence – This is a comprehensive examination of your business by the potential buyer. It includes thoroughly reviewing all financial records, legal documents, client contracts, and other material aspects of your business. Timeline: 45-60 Days Step 5: Negotiate the Final Terms/Price – Based on the findings from the due diligence, you and the buyer may need to negotiate the final price and other terms of the sale. This is also when you finalize the sales agreement, which legally documents all terms and conditions of the sale. Timeline: 1-2 Weeks Step 6: The Buyer Gets Funding – The buyer must secure the necessary funding to complete the purchase. This could come from various sources, including their own cash reserves, bank financing, or investor capital. Timeline: 1-90 Days Step 7: You Close the Deal – Once the funding is secured and all terms are agreed upon, you sign the final purchase agreement, and the deal is closed. At this point, the ownership of your business officially transfers to the buyer.
