Should I Sell?

If you survived 2020, how many companies asked the big question, is it time to sell.

If you are in that position there are a few things you should know.  When I owned my company we had a good business and my wife and I thought we might want to sell the company.  We invited a big company that purchased tow companies to look at us and make an offer.  The good news is they did; the bad news is they offered almost nothing for the company.

There is pride in ownership and everyone thinks their company is worth millions and needless to say we were very disappointed in their offer, but we learned from the experience.  They showed us what we had to do to prepare to sell for a good price.  Over the next 2 years we worked on making our company a good buy.  We did things like:

1. Pay off debt

2. Make sure our service was good

3. Hired the right people

4. Fired the right people

5. Made sure we had no outstanding law suits

6. Cleaned and upgraded the storage yard

After all the changes we were feeling pretty good about ourselves.  We had no intentions of selling the business. As a matter of fact we partnered up with a local company to do business together.  Then one day it happened.  A complete stranger walked into my office and wanted to purchase my company.  He knew what church I went to; he knew what toppings I put on my ice cream; he knew my favorite color – ok you get the picture!  He did his homework and knew I had a good company.  When you are doing things right, people notice! 

I had to go to the local company and tell them I could not partner with them because someone wants to purchase my company.  His reaction was, I’ll buy your company.  Now I had 2 people wanting to purchase my company.  What a great position to be in.  I sold it to the local company and we closed within a month.  In preparation for the sale I did the following:

1. I told my employees I was selling the company.  After all it was them that made me successful.

2. I told my best customers I was selling and assured them the sale would be good for them.

3. Got all my finances in order

4. Made sure the things listed above were completed.

What I did not do is plan my future.  What will I do since I don’t have a tow company to go to anymore?  I sat on the couch and watched soaps until I got bored.  That lasted about a week.  I wanted to stay in the industry and work with tow companies and go to tow shows and help tow companies in any way I can.

I started another company called TowTrax where I identified an industry problem and I fixed it, or I’m working on the fix.  I developed a phone app that works like Uber.  My app provides the following:

1. I market for the tow companies and find them tows they don’t have today.  This is a free service to the tow company and it is a new revenue stream.  Go to TowTrax.net and watch the testimonial and you will see what impact it has on tow companies.

2. My customers, which are consumer, motor clubs, and law enforcement,  are happy because I improved the ETA’s. I service areas where they cannot find tow companies, and I cut expenses

3. The consumer likes TowTrax because of the improved ETA’s, and they pay less for the service.

Now I am faced with some of the same old problems.  Started a new company and had some success so now I have people knocking at my door wanting to buy my company.  There is value in my company, but not enough to get what I want.  If or when you sell, make sure you have enough to support the next part of your life.  I learned that when someone hands you a big check, you will spend it.  I know I will not sell any time soon only because I see the value in what I am doing, and I want to stay in the industry.  

You will know when its time to sell your company.  You will see signs like:

1. It’s harder and harder to get up in the morning

2. Employees are harder to deal with

3. You will miss the excitement 

4. You will lose your competitive edge

5. You will have a hard time communicating with your wife and other employees

6. Things that use to be fun at work are no longer fun

If and when you decide to sell your company make sure you have something to fill the void in your daily routine.  Don’t make the decision by yourself.  Talk to your employees, talk to your customers, talk to your wife.  Look at the pros and cons of how your life will change.  Find someone to help evaluate your company and come up with a good sale price.  If you do some of the things I mentioned, it will be easier to determine the price.  Don’t back off your number if you think it’s good.  Don’t rush unless the buyer demands it.  If you talk to enough people, the decision will be easy and you will get what you want.  

When I sold my company, I brought another company in to determine its value.  They gave me a selling price.  I took it and added another $250,000.  When the buyer asked for the price, I gave them my number.  I knew it was high, and the buyer knew I was high but I got what I wanted.  Plan on staying with them to make a smooth transition unless they don’t want you there.  The payout was not a big check.  It was a third up front with a payout over time.

If you need help trying to decide what direction to go in the future, or want to discuss your situation, call me.  I’m free  –  and I always have an opinion!