Fri, 24 July 2020
Welcome to this week's Friday Jam session, glad to have you here! As always, this is one of the highlights of my week. Every Friday, I get to hang out with some awesome people and answer some great questions. Join us by heading over to takeactioncrew.com to join in on the fun every week and get your questions answered.
The question we're going to start with today is, "how do you build a brand with the intention of selling it?" The goal is to find traffic in the market that produces revenue if you want your business to be successful and prepare it for sale. Not only will you be making money from ads, products, etc. as you go along, you'll also be able to sell your blog for around 3x the amount of your net profit when you're ready.
We're in the process of selling one of our businesses now. We had a previous offer before COVID hit that was an amazing offer. We were ready to go, and we were a month into the sale, and they backed out right in the middle of the pandemic. We've now supposed to close with a new buyer in a week that has been a long two-month process, and today, I'm going to share what we need to make that brand success and ready to sell.
Create Your Strategy From The Start
We built traffic following our Brand Creator's playbook. Everything we've implemented follows that same model. We focus on creating content that gets indexed by Google, sending three emails a week to our audience, a Pinterest strategy, selling over ten physical products, and a digital product. On top of that, we also implemented our ad and affiliate revenue streams. We even have some Etsy and eBay sales. The key is to have diversification in place, which buyers love.
If you want to start a business to sell it, make sure that you get your accounts set up by a 3rd party accounting team. Your books have to be to make the sale a success. When you want to sell your business, having your books done by a third party helps build credibility, so potential buyers know it was done accurately. I would get that process set up when you make your first sale.
How To Prepare Your Business to Sale
Start by finding a market or a niche that will be around for the long haul. Make sure that you validate that you'll get traffic, and there is money to be had in the market. Can you make money selling digital products and putting ads on your site? Focus on getting the ad networks, affiliate links, and digital products set up to start with. If you want to sell your business, they want to see diversification.
If you want to sell your business for a million dollars, you'd need to make $350,00 net profit per year. Keep in mind you'll have to have your business for at least 18 months before you can sell. Buyers want to see a positive trend for longer than a year. So you should always start planning ahead of time before you want to sell.
The perfect formula to sell your business includes diversification, traffic, and revenue. By following this formula, you'll be able to sell your business quickly because you want to buy something that they know has the potential to grow quickly.
If you're really niched down, it might be hard for someone to take it over, but it can still be done if you have a good strategy in play. It's also hard if you're the face of the brand, so branch out and bring in others contributes to making it easier to transition ownership. You can still be the face of the brand but had other people to the mix too.
I recommend getting help with your business by finding people who are good at what they do and get a good process in play. You'll learn how to do things but delegate the day to day process to a team member. It'll help you sell it, so it's easy to transfer to a new order.
How to Choose a Good Broker For Your Sale
Personally, I work with Joe Valley's team. Their whole business model is to help you before you decide if you want to work with them or not. It's helpful to have a plan in place a year before you actually sell your business, so it's important to talk with a broker before you decide to sell. So they can walk you through the process and get you prepared before you move forward when you're ready.
Do You Need an LLC
Yes, you should have an LLC and start it fairly quickly. For the brand we're selling, we started sourcing a product, to begin with, and began with an email list. As we were building it, we were building content and driving people from our email to the website. During that time, we were getting an LLC up and running. It's not that difficult of a process, but you'll need it in place when you sell your business, so the sooner you set it up, the better.
I hope you found our Friday Jam session helpful today!
Remember, I am here for you, I believe in you and am rooting for you.
Now it's time to take action and go rock your brand!
Take-Aways From Today's Episode
"The perfect formula to sell your business includes diversification, traffic, and revenue".