Selling A Small Business

This week I have to enter into negotiations to buy a small business. The other side believes that it's worth a lot more than it is. It's my job to convince them that it's worth what are willing to pay. Unfortunately, its often difficult to explain the true value of a business to small business owners, who have invested the proverbial blood, sweat and tears.

The numbers, including some industry standards, show that we are paying the correct price (half of what they are asking). The seller, however, is uninformed of these methods and thus wants a higher price. Small businesses such as this are prone to overvaluing the effort they put into the business. What they often don't understand is that the more valuable they personally are to a business, the less the business is worth. Its simple, once the owner leaves, the value leaves with them. Kinda selfish really.

A small business owner should try to make the business run without them. Its the logic behind systematization. Makes it easier to sell. As Michael Gerber says in the E-myth, there are only two reasons for a business, to sell it or franchise it.

A Cool Business Model

From Tim Ferris's book, The Four-hour Workweek.

Here is a cool new business model made possible by the internet. Steps are listed below:

1. Be a specialist/expert at something.
2. Build a DVD explaining how to do it.
3. Outsource the manufacturing of it.
4. Sell it over the Internet.

Easy. If need be, replace DVD with website, newsletter, whatever. Its easy and cheap and if its good, you can reach a lot of people without a lot of expenditure.

Next project: My mom teaches ballroom dancing for people in wheelchairs. How-to DVD will be coming for Christmas.

A Constant Reminder

Although my dad will surely role his eyes (thinks I can be a bit dramatic) I will go ahead with this blog. I read this theme in two separate books and one speech by Steve Jobs, all within the span of a few days. (Thanks Allen and Tyson!!)

The theme is that death is a constant companion.

It follows you wherever you go, all your life. You cannot outrun it or hide from it. It is always there, ever patient, ever ready. In the light of this, knowing that you could go at any second most things seem not so important. Is it important that you get that new ipod? Or that when you go to clubs you dont meet anyone? Just doesnt seem that important, does it? Family, loyal friends, work that lets you contribute to the world - these are the important things.

Its not simple enough to live life as though you may die tomorrow. I dont plan on dying tomorrow, nor the next day or a long while after that. But I could. So why be scared/intimidated/timid/content - there is so much to do...

Words For The Ages

Some words that you use as a teenager/young adult are cool. However, once you enter the business world, some of these words have to leave your vocabulary lest you run the risk of sounding immature - and believe me, immature is almost as bad as dumb. These words and their replacements are listed below:

Old Word: Awesome (or Sweet!) - Replace with: Great.
Old Word: Seems - Replace with: Appears.
Old Word: Cool - Replace with: Excellent.
Old Word: Fun - Replace with: Interesting.
Old Word: Cops, 5-0, pigs - Replace with: Police (they arent your enemy anymore, they protect you)
Old Word: A'ight - Replace with: Yes.
Old Word: Bi'atch - Replace with: ...(silence)...

Of course there are some words you dont get rid of: Boo-yah (always sounds cool), HOT (useful for so many things) and my personal favorite - Badonkadonk.

Adherence

The more books I read, the more complicated things seem to become. My brain cant handle it. Its like the more clothes I buy, the more complicated it becomes to choose what to wear. The more furniture I buy, the more cluttered my apartment became. The more dishes I buy the more I have to clean (not true, but it feels that way). The more girls I date...uh...err..nevermind.

Its like single variable calculus was easy. Multi-variable calculus no way! Impossible!

I always thought the more I read on business, in all of its categories, the better I would be at business. Not true. I think that people with the most success have a few principles that they adhere to strictly. Seems to make sense that I should have mine:

1. Underpromise/Overdeliver

2. Be impeccable with my word. (Do what I say I will when I say I will do it!)

3. Listen to myself.

The first is obvious but tough. You want to get people excited, hell, get yourself excited. But its important to manage expectations. The second is, in my opinion, the most important for business. Its a function of trust, the most important thing in a relationship. Business is about relationships. The third is less obvious than the first two but equally advantageous to implement. Its the times when I have walked an others path and gone astray. When I listen to myself, I have no regrets. No regrets means higher and more solidified self-confidence.

I will add more as time goes on and my experience widens. A lot of trouble in my life could have been avoided by adhering to the above.

The Four Agreements, By Miguel Ruiz

1. Don't Take Anything Personally -What this does is protect you from taking offence when none was meant. Although it may seem passive and is if you are letting people "get away with something" thats not the case.

2. Be Impeccable With Your Word - simpel as dont say things about people that you wouldnt say to their face. Heck, dont say anything mean at all. Be honest with yourself and others. Do as you say you will.

3. Dont Make Assumptions - Sometimes you will be called upon to make judgements, get as much information as possible. If you must react, give the benefit of the doubt.

4. Always Do Your Best - Always. Give your all.

These four laws work in conjunction with each other; like the spokes on a wheel, they work best together.

Cool Websites

These websites are cool. I am surprised I had to read a book to find out about them. Seems like these should be common knowledge (or commonly used tools).

www.getfriday.com - get a virtual assistant in India to help you with a range of tasks. Cheap and apparently they are great at what they do.

www.elance.com - hire a professional website designer, engineer, you name it!

www.hotrecorder.com - record conversations over the internet. (we should all be talking over the internet anyways. 3 cents a minute!!!)

www.contactanycelebrity.com - just kind of fun.

Its hard to imagine what else is out there, but I will bet there are a lot more great sites. Please post in comments other cool websites.