3 Ways to Maximize Your Company's Value

Today's episode of the podcast, Robert Hirsch from Freedom "Factory discusses 3 Ways to Maximize Your Company's Value", frequently asked by business owners, and people who want to start a business.

Listen to the podcast, watch the video, or read the transcript below.

Additional Videos From Freedom Factory

What Does Freedom Mean to me to Sell my Business?

What is My Business Worth?

Transcript of Podcast

Hi, Robert Harris from Freedom Factory here again, and today I want to talk to you about the three ways to maximize the value when you go to sell your business. The first is to maximize your multiple, and what I mean by that is there are different multiples for different businesses and we can talk about what that looks like.

But for example, I had a company come to me to sell and its name was something excavation, and it started off being an excavation company, but in the last 20 years, it really turned into a construction company, but 80% of its revenues were construction. Now it turns out that multiples are this size business and multiples, meaning how much times earning is your company worth?

If your multiple is two and your earnings were $1 million, your company would be worth 2 million plus whatever your capital assets are. And so the excavation company, the multiple was roughly two to two and a half, but if it was a construction company, which it really was, is four and a half to five, so it changed the branding of the company. We changed the positioning and we were able to tell it in the construction multiples, not in the excavation multiples.

Point two is recasting your financials. Now you have to pay your taxes and you have your EBIDTA and your EBIT is designed to be minimized. And what we do is we do a pivot table and we translate that to seller's discretionary cash flow. And it accurately reflects all the cash and value that your company creates. And so by adding back your board meetings in Hawaii and maybe your health club memberships and your vehicles, et cetera, et cetera, et cetera, you really get a capture all that value. So recasting your financials is really important.

The third piece is maximizing your intangibles. And what I mean by that is when we have a buyer that comes to look at your company, they're going to ask questions. And if we have those questions answered beforehand and they say, well, how does the company work? And he said, well, it's A, B, C, and D, and we can send you the operations manual following this call, and he can get back to us with any questions. An approach like that is going to answer more questions and it's going to create, and let's say the multiple range was three to five times earnings, meaning if it was $1 million of earnings, if it were three to 5 million, when your intangibles are there, you're going to really get on the upper side and get a net over four, four and a half, five.

When everything's in disarray, you're really going to be on the lower end of that. So getting your intangibles in place is really important. And remember, when you go to sell your business, it's a team sport. If you need any help, just give us a call at Freedom Factory and we'd be happy to help you and walk you through the entire process.

Thanks for spending your valuable time with me. Please Like This Video and Subscribe to Our Channel and we'll see you soon.

Contact Freedom Factory

At Freedom Factory®, we have experienced and witnessed the explosive results of entrepreneurs aligning passion and purpose to create extraordinary value. However, most entrepreneurs have no idea how to maximize the value of their business and move on to the next chapter of their lives. That’s where we can help.

Freedom Factory® has radically disrupted the way high-growth, lifestyle companies are bought and sold, which historically was a horribly inefficient market. When I sold my first company in the 1990s, I went to several investment banks and sold my business to one of less than five companies they called. Looking back, I see exactly how much money I left on the table and knew that there had to be a better way. The bottom line is that entrepreneurs don’t speak banker, and bankers sure don’t speak entrepreneur.

https://tylertysdal.academia.edu/

Contact Tyler Tysdal at Freedom Factory

Freedom Factory
5500 Greenwood Plaza Blvd., Ste 230
Greenwood Village, CO 80111
Phone: 844-MAX-VALUE (844-629-8258)
https://www.freedomfactory.com/

Freedom Factory Managing Partners

Tyler Tysdal https://www.linkedin.com/in/tyler-tysdal
Robert Hirsch https://freedomfactory.com/about-robert-hirsch

Who is Tyler Tysdal?

Tyler Tysdal is a lifelong entrepreneur who first discovered the joys and challenges of self-employment at the age of 14. Tyler Tysdal was a collector and trader of baseball cards and his budding entrepreneurial spirit spurred him to create Triple T’s Sports Collectibles, a national mail-order trading card and memorabilia business that found a wide audience through ads in trade magazines. While market inefficiencies were numerous in this pre-internet era, a young Tyler Tysdal experienced his first big business win with $14,000 a month of profit result. A lot of money for 14. It hit him during a ride with his mom to the post office to mail dozens of card shipments: He would likely be an entrepreneur and investor the rest of his career.

Additional Websites to Follow Tyler Tysdal

https://soundcloud.com/tylertysdal
https://twitter.com/tysdaltyler
https://www.instagram.com/tyler_tysdal/
https://tylertysdal.com/
https://sites.google.com/view/tylertysdal

Watch Podcasts on Instagram

Additional News Sources:

Tyler Tysdal On How Business Brokers Can Help Sell Your Business

https://tricitydaily.com/tyler-tysdals-freedom-factory-teaching-entrepreneurs-secrets-of-selling-their-business-for-maximum-value/

Tyler Tysdal Discusses Key Reasons for Selling a Business

Tyler Tysdal Podcasting

Check out this episode from Freedom Factory!

Grow a Business or Buy a Business

Robert Hirsch from Freedom Factory talks about whether you should 'Grow a Business or Buy a Business'. 

Listen to the podcast, watch the video, or read the transcript below.

Additional Videos From Freedom Factory

What is Entrepreneurial Freedom?

What is Your Stupid Human Trick?

Transcript of Podcast

Hi Robert Hirsch from Freedom Factory, and I want to talk to you about something that's pretty important for an entrepreneur. And frankly, I don't think most entrepreneurs consider, which is when they want to grow their company, do you want to build it or do you want to buy it or growth by acquisition.

Now, historically, a lot of entrepreneurs haven't really considered it, and the reason for that is that buying and selling small businesses has been a pretty inefficient asset class. It's hard to find the right one. It's hard to find a real one. It's hard to know what business you're in. Not a lot of brokers really disclose a lot of meaningful information and unless you're applying EBITDA of 5 million or more, you don't necessarily view it that way.

But I'm here to tell you that that's not necessarily the case anymore. Money is made on the buy and you want to, you want to find something at a fair valuation. Warren buffet said it, I think best. He said, I'd rather have a great business at a good price than a good business at a great price.

I think what he means by that is an exceptional business with this sustainable competitive advantage will always be worth more than an average business. Again, when you're looking at it, you're trying to think, okay, how do I find a great business at a fair price? So at Freedom Factory, we really specialize in selling great businesses. If you can find a great business at a good price, it can make a ton of sense. There's two other points of leverage that you might want to consider. One is if you have a complementary product set or a complimentary customer set. And what I mean by that, let's say you sell phones and you're looking at buying the headset company, or buying headsets to would plug right into your phones. Your existing customers would be interested in it. And if you could get a 10 20% take rate on that, you might be able to pay for your business in less than a year if you bought it at three, four or five times earnings.

The other thing which I talk about more in other videos is what I like to call your stupid human trick. Or really, that's the one thing that you do better than anyone else. And everyone's heard of the 80 20 principle, right? 20% of your work delivers 80% of your results. Well, when you get to an expert level at something, in my experience, it's really turned into 95 -five. So 5% of my work delivers 95% of my results.

Now, that can really multiply your efficiency and efficacy in your business. And what I mean by that is if I could do that 5% 20 times, I could deliver 20 times the business results that I could otherwise. So let's land the plane and talk about exactly what I'm saying. So let's say, for example, for me, my background is in sales and direct response marketing.

So if I can find an engineering company with a superior quality product that's extraordinary, that has a sales problem, I can probably dramatically shift the line by focusing on fixing the sales and marketing problem, which comes really naturally to me, and allows me to make huge differences in your company.
So for example, we've had clients that have bought companies at four times earnings, and they've paid for itself in less than nine months because you use that stupid human trick to really dramatically shift the line on your business. Going back to build versus buy. I know it's been an inefficient market class, but you don't always have to build organically.

Money's made on the buy. Look for great, great businesses. See if you can find businesses that are complimentary to yours. Maybe it's a luggage company and you have a travel site. See if you can plug it into your existing customer set, or you can plug your products into their customer set.

And finally, as entrepreneurs, we all do a lot of great work on figuring out our stupid human trick. And there are a lot of tools for that - Kolby, Meyers Briggs, figuring out your profile and what that looks like. A lot of people like the enneagram model, but whatever you can do to sharpen and hone that edge of figuring out what you're best at and making sure that you can leverage that in a business, can provide dramatic results and make buying a business really makes sense. If you have any questions on a great business for you or under stupid human trick, why don't you give us a call it freedom factory? Thank you so much for watching.

Please like and subscribe and we'll see you soon.

Contact Freedom Factory

At Freedom Factory®, we have experienced and witnessed the explosive results of entrepreneurs aligning passion and purpose to create extraordinary value. However, most entrepreneurs have no idea how to maximize the value of their business and move on to the next chapter of their lives. That’s where we can help.

Freedom Factory® has radically disrupted the way high-growth, lifestyle companies are bought and sold, which historically was a horribly inefficient market. When I sold my first company in the 1990s, I went to several investment banks and sold my business to one of less than five companies they called. Looking back, I see exactly how much money I left on the table and knew that there had to be a better way. The bottom line is that entrepreneurs don’t speak banker, and bankers sure don’t speak entrepreneur.

https://tylertysdal.academia.edu/

Contact Tyler Tysdal at Freedom Factory

Freedom Factory
5500 Greenwood Plaza Blvd., Ste 230
Greenwood Village, CO 80111
Phone: 844-MAX-VALUE (844-629-8258)
https://www.freedomfactory.com/

Freedom Factory Managing Partners

Tyler Tysdal https://www.linkedin.com/in/tyler-tysdal
Robert Hirsch https://freedomfactory.com/about-robert-hirsch

Who is Tyler Tysdal?

Tyler Tysdal is a lifelong entrepreneur who first discovered the joys and challenges of self-employment at the age of 14. Tyler Tysdal was a collector and trader of baseball cards and his budding entrepreneurial spirit spurred him to create Triple T’s Sports Collectibles, a national mail-order trading card and memorabilia business that found a wide audience through ads in trade magazines. While market inefficiencies were numerous in this pre-internet era, a young Tyler Tysdal experienced his first big business win with $14,000 a month of profit result. A lot of money for 14. It hit him during a ride with his mom to the post office to mail dozens of card shipments: He would likely be an entrepreneur and investor the rest of his career.

Additional Websites to Follow Tyler Tysdal

https://twitter.com/tysdaltyler
https://www.instagram.com/tyler_tysdal/
https://tylertysdal.com/
https://sites.google.com/view/tylertysdal

What Podcasts on Instagram

Additional News Sources:

https://tricitydaily.com/tyler-tysdals-freedom-factory-teaching-entrepreneurs-secrets-of-selling-their-business-for-maximum-value/

https://tricitydaily.com/tyler-tysdal-talks-about-bitcoin-mining-and-cryptocurrency/

AllTheTopNews.com

Check out this episode from Freedom Factory!

When Should I Tell Employees if I am Thinking About Selling

Today's episode of the podcast, Robert Hirsch from Freedom Factory discusses "When Should I Tell Employees if I am Thinking About Selling".

Listen to the podcast, watch the video, or read the transcript below.

Additional Videos From Freedom Factory

Strategies for Getting Your Company Ready to Sell

How are Brokers Different from Investment Bankers?

 

Transcript of Podcast

Hi, Robert Hirsch from Freedom Factory again. I just had a really interesting email from one of my clients, and long story short, rumors got out among their employees that they were selling the company and he chose not to share that with his team and now it's created some problems for him.

And so I wanted to talk to you today about whether you should tell your employees that you're thinking of selling your company or not. To me, when I sell one of my companies or my advice on it, it's always honesty and transparency is the best policy. That's easy to say and hard to do and you understand the culture at your company and whether you want to have an all hands meeting, whether you want to have an email, whether you want to discuss it. I love talking to our employees about it in a place that's face to face where it gives them the opportunity to talk to me and it gives me the opportunity to comfort them. Depending on the structure of your company, I usually have bonuses or incentives when the company sells, and as an entrepreneur, there's this really important lesson that I learned along the way.

It's, there's no fun winning when there's nobody to high five, and if you're the only one that wins in the sale of your company and all your employees and the teammates and the people that have given the years of their life are worried or concerned about what they're going to do next often you can create a structure that makes it, that everybody wins and everybody celebrates together and, and perhaps, some of your core team is going to want to come with you. Perhaps they transition with the company. Most of the time when a company is acquired, they're going to want to keep the team in place for the continuity.

So ultimately, how you choose to address this question is up to you and it's up to your corporate culture. But often I'll tell a few key members early and the people that are going to help me in the transition, but rumors are unavoidable, and if you don't talk to your team about it, and then the rumors are going to start coming and then it's going to come back to bite you like it just bit my client in the behind and I like to get out in front of it early. I think honest and transparency and creating a game worth winning for everybody is a whole heck of a lot of fun. In that way when you win, you in with everybody. If you have any questions about how to disclose it or what that looks like, just give us a call at Freedom Factory.

Please hit like and subscribe and thank you so much for watching.

Contact Freedom Factory

At Freedom Factory®, we have experienced and witnessed the explosive results of entrepreneurs aligning passion and purpose to create extraordinary value. However, most entrepreneurs have no idea how to maximize the value of their business and move on to the next chapter of their lives. That’s where we can help.

Freedom Factory® has radically disrupted the way high-growth, lifestyle companies are bought and sold, which historically was a horribly inefficient market. When I sold my first company in the 1990s, I went to several investment banks and sold my business to one of less than five companies they called. Looking back, I see exactly how much money I left on the table and knew that there had to be a better way. The bottom line is that entrepreneurs don’t speak banker, and bankers sure don’t speak entrepreneur.

https://tylertysdal.academia.edu/

Contact Tyler Tysdal at Freedom Factory

Freedom Factory
5500 Greenwood Plaza Blvd., Ste 230
Greenwood Village, CO 80111
Phone: 844-MAX-VALUE (844-629-8258)
https://www.freedomfactory.com/

Freedom Factory Managing Partners

Tyler Tysdal https://www.linkedin.com/in/tyler-tysdal
Robert Hirsch https://freedomfactory.com/about-robert-hirsch

Who is Tyler Tysdal?

Tyler Tysdal is a lifelong entrepreneur who first discovered the joys and challenges of self-employment at the age of 14. Tyler Tysdal was a collector and trader of baseball cards and his budding entrepreneurial spirit spurred him to create Triple T’s Sports Collectibles, a national mail-order trading card and memorabilia business that found a wide audience through ads in trade magazines. While market inefficiencies were numerous in this pre-internet era, a young Tyler Tysdal experienced his first big business win with $14,000 a month of profit result. A lot of money for 14. It hit him during a ride with his mom to the post office to mail dozens of card shipments: He would likely be an entrepreneur and investor the rest of his career.

Additional Websites to Follow Tyler Tysdal

https://twitter.com/tysdaltyler
https://www.instagram.com/tyler_tysdal
https://sites.google.com/view/tylertysdal

Watch Podcasts on Instagram

Additional News Sources:

https://tricitydaily.com/tyler-tysdals-freedom-factory-teaching-entrepreneurs-secrets-of-selling-their-business-for-maximum-value

https://tricitydaily.com/tyler-tysdal-talks-about-bitcoin-mining-and-cryptocurrency

NewsArrivals.com

Who is Tyler Tysdal?

Check out this episode from Freedom Factory!

Seller Beware The Big Reasons Deals Don't Close

Today's episode of the podcast, Robert Hirsch from Freedom Factory "Seller Beware! The Big Reasons Deals Don't Close"

Listen to the podcast, watch the video, or read the transcript below.

Additional Videos From Freedom Factory

How Do I Sell My Business?

When is the Right Time to Sell My Business?

Transcript of Podcast

Hi everybody. This is Robert from Freedom Factory and I want to talk to you about it a pretty serious topic today, and it's the biggest reason that deals don't close. Now, personally, my close rate on deals has been really strong over the last 10 or 15 years, but I see a lot of people, you know, the industry standard, they close less than 50% of deals.

So, it's almost unbelievable when you think 50% of people that agree to pay a price for a business don't actually buy it. And I want to jump into why that is, and more importantly, how can you can make sure that doesn't happen to you. So first of all, when the biggest reason that I see that deals don't close is usually when the numbers drop off a cliff.

And the reason that happens is because the entrepreneur is trying to do too much. So as running a business as an entrepreneur takes a lot of work, and when we sell a business, we're partners for a short period of time. I talk a lot about our 147-day selling process and a lot of times it works in that time. Sometimes it takes a little bit longer, sometimes or even faster. But the number one thing when we're selling your business is to let us do our job as you have to do your job and make sure the numbers are still going on the same trend line that they were. If you're growing at 3% a month. The this time can be the absolute most important time for you to do it. Not only because you get paid the best. What that means, for example, let's say, you're selling your business on earnings and you're getting a multiple of five times earnings. When you sell it, you're actually getting paid six times on every sale you ever make, which means you're getting paid once in the cash and five times you're earning is when you sell it.

Now, if you were making six times your usual value when you sell a business, do you think you would sell harder? I sure would. And having the right broker and the right partner to be able to sell it for you, we're going to handle the process. We're going to handle the phone calls. We're going to handle the Q and a, the diligence.

We're going to prequalify your buyers. We're going to take all that off of your plate. In fact, until the buyers had been prequalified, and we have an LOI on the table, we don't even put them on the phone with you. We want to preserve your time as much as you can so you can run your business as profitably as we can, and we can do our job.

And again, what we do at Freedom Factory is make sure to build as much deal tension as we can. So that's getting the most people introduced to the business, either through a combination of inbound or outbound and marketing materials going through a Q and A process and getting all the buyers to go to our process, meaning the sellers process.

We do Q and A here. We do prequalification here; we do LOI's here. We start to go through and we get the funnel and we find the perfect buyer and the perfect fit for you. Bottom line is the partnership's pretty simple - for the next year, you run your business, we focus on selling your business.
When you're talking to a broker, you're making the right decision. Try and find somebody that's not just a sales guy or just sells businesses for a living. Find a career entrepreneur; someone that speaks entrepreneur, somebody that understands that. Just because you've built the business and got it to here doesn't mean that you want to run it for the rest of your life.

Sometimes as entrepreneurs, I look at us as the producers or the builders or the contributors, and, and if I'm not on point and on passion in my business, you can feel it. And it's not the same thing. And so if you're an entrepreneur that has a business that you're no longer passionate about, just because you took the train to Chicago, doesn't mean you want to drag the train around with you once you get there. Give us a call and we'll be able to help figure out the best way for you to transition to something you are passionate about so you can build massive, massive value.

One other truth is that time kills all deals. And every deal goes sideways. We have buyer's remorse. People often talk about it's the house as the biggest purchase you ever going to make. Well, that's not true if you're buying or selling a business. Often for me, buying and selling a business is the biggest purchase, or is the biggest purchase or sale that my clients are ever going to make.

And the more time you have, more likely the buyer is to have a little bit of buyer's remorse. Or if one little thing goes wrong, maybe they latch onto that, we have a bad month or bad week, and they use that as an example of why the business isn't as good as they thought they would. So at the best-case scenario, they're going to try and buy it for a little less of a price, which isn't going to feel good to you, the seller, or to me, the broker. And the worst-case scenario is they just back off and they go dark and they don't want to do it and they pull it out of escrow, and then we have to begin the process all over again.

So again, when you, when you look at these types of things, what I've found in 20 years of doing this is every deal is going to go sideways at least once. And that's where my experience comes into play. That's where we can get it through. I've seen deals go sideways for every reason you can think of yet I still get surprised and see new deals go sideways all the time. We'll get you through it. We'll keep a smooth, steady hand. You keep running the business and keep the fundamentals going up and up and up, and we're going to sell your business for more than anybody else in the marketplace.

Now, if you have any questions on selling your business, why deals go sideways or what the process looks like. Why don't you give us a call at freedom factory? We'll talk you through that and any other questions that you might have. Thank you so much for watching. Please like and subscribe and we'll see you soon.

 

Contact Freedom Factory

Freedom Factory
5500 Greenwood Plaza Blvd., Ste 230
Greenwood Village, CO 80111
Phone: 844-MAX-VALUE (844-629-8258)
https://www.freedomfactory.com/
https://g.page/freedom-factory-denver

Also, Follow Freedom Factory here 

Business Brokers - video portfolio

Youtube Videos

Available on Youtube:

Contact Freedom Factory

At Freedom Factory®, we have experienced and witnessed the explosive results of entrepreneurs aligning passion and purpose to create extraordinary value. However, most entrepreneurs have no idea how to maximize the value of their business and move on to the next chapter of their lives. That’s where we can help.

Freedom Factory® has radically disrupted the way high-growth, lifestyle companies are bought and sold, which historically was a horribly inefficient market. When I sold my first company in the 1990s, I went to several investment banks and sold my business to one of less than five companies they called. Looking back, I see exactly how much money I left on the table and knew that there had to be a better way. The bottom line is that entrepreneurs don’t speak banker, and bankers sure don’t speak entrepreneur.

https://tylertysdal.academia.edu/

Contact Tyler Tysdal at Freedom Factory

Freedom Factory
5500 Greenwood Plaza Blvd., Ste 230
Greenwood Village, CO 80111
Phone: 844-MAX-VALUE (844-629-8258)
https://freedomfactory.com/about-tyler-tysdal/

Freedom Factory Managing Partners

Tyler Tysdal https://www.linkedin.com/in/tyler-tysdal
Robert Hirsch https://freedomfactory.com/about-robert-hirsch

Who is Tyler Tysdal?

Tyler Tysdal is a lifelong entrepreneur who first discovered the joys and challenges of self-employment at the age of 14. Tyler Tysdal was a collector and trader of baseball cards and his budding entrepreneurial spirit spurred him to create Triple T’s Sports Collectibles, a national mail-order trading card and memorabilia business that found a wide audience through ads in trade magazines. While market inefficiencies were numerous in this pre-internet era, a young Tyler Tysdal experienced his first big business win with $14,000 a month of profit result. A lot of money for 14. It hit him during a ride with his mom to the post office to mail dozens of card shipments: He would likely be an entrepreneur and investor the rest of his career.

Additional Websites to Follow Tyler Tysdal

https://soundcloud.com/tylertysdal
https://twitter.com/tysdaltyler
https://www.instagram.com/tyler_tysdal/
https://tylertysdal.com/
https://sites.google.com/view/tylertysdal

What Podcasts on Instagram

Additional News Sources:

https://sites.google.com/view/howtosellabusiness/sell-your-business

https://www.globenewswire.com/news-release/2021/04/20/2213552/0/en/Award-Winning-Journalist-Natalie-Tysdal-Quits-News-Business.html

https://tricitydaily.com/tyler-tysdals-freedom-factory-teaching-entrepreneurs-secrets-of-selling-their-business-for-maximum-value/

ObservedNews.Com

Check out this episode from Freedom Factory!

Key Difference Between Owning a Business and Owning a Job

Do you own a job or a business? Many entrepreneurs don't recognize the difference between the two. If you are a businessman, it is essential to know how your company performs if you're physically there and if you're not.

That way, you can find out if your business continues to profit or not. There's a litmus test to find out if what you have right now is really a business or just a job. 

Listen to the podcast, watch the video, or read the transcript below.

Additional Videos From Freedom Factory

Strategies for Getting Your Company Ready to Sell

How are Brokers Different from Investment Bankers?

 

Transcript of Podcast

Hi, Robert Hirsch here from Freedom Factory, and one of the most frequent questions we get is, can I sell my business? And the answer is always yes. It just depends on what's the price. And if you own a job, it's very difficult to sell. And the multiple is usually one or less. And if you don't know whether you own a job or you own a business, there's a really easy litmus test to find out.
Just don't show up for a few weeks. If your income stays the same or goes up, you're on a business. If it goes down, you own a job.

The good news is there's a lot of value to be created by taking people that own jobs and transition to them, to people that own businesses. And what I mean by someone that owns a business or a business that holds its shape, if you will, when you're not there, when you're not the primary entrepreneur, you have systems and processes and employees and team that makes sure that you generate as much value as you can. So let's jump into that. Let's jump into what that looks like. So again, if you're not sure if you own a business or you own a job, just don't show up for a couple of weeks. If your income stays the same or goes up, you own a business. If it's lower, you own a job.

The good news. If you own a job, you can transition it to a business pretty easily. What you want to do is build your operations manual, your systems, your processes, and your team to get yourself out of the traditional workflow. So you're working on your business and not in it. If you need any help with processes like this, just give us a call at Freedom Factory. Thank you so much for watching. Please hit like and subscribe and we'll see you soon.

Contact Freedom Factory

Freedom Factory
5500 Greenwood Plaza Blvd., Ste 230
Greenwood Village, CO 80111
Phone: 844-MAX-VALUE (844-629-8258)
https://www.freedomfactory.com/
https://g.page/freedom-factory-denver

Also, Follow Freedom Factory here 

Freedom Factory - Best Business Brokers - video portfolio

Follow Freedom Factory us on Twitter

Freedom Factory Youtube Channel

Available on Youtube:

Contact Freedom Factory

At Freedom Factory®, we have experienced and witnessed the explosive results of entrepreneurs aligning passion and purpose to create extraordinary value. However, most entrepreneurs have no idea how to maximize the value of their business and move on to the next chapter of their lives. That’s where we can help.

Freedom Factory® has radically disrupted the way high-growth, lifestyle companies are bought and sold, which historically was a horribly inefficient market. When I sold my first company in the 1990s, I went to several investment banks and sold my business to one of less than five companies they called. Looking back, I see exactly how much money I left on the table and knew that there had to be a better way. The bottom line is that entrepreneurs don’t speak banker, and bankers sure don’t speak entrepreneur.

https://tylertysdal.academia.edu/

Contact Tyler Tysdal at Freedom Factory

Freedom Factory
5500 Greenwood Plaza Blvd., Ste 230
Greenwood Village, CO 80111
Phone: 844-MAX-VALUE (844-629-8258)
https://www.freedomfactory.com/

Freedom Factory Managing Partners

Tyler Tysdal https://www.linkedin.com/in/tyler-tysdal
Robert Hirsch https://freedomfactory.com/about-robert-hirsch

Who is Tyler Tysdal?

Tyler Tysdal is a lifelong entrepreneur who first discovered the joys and challenges of self-employment at the age of 14. Tyler Tysdal was a collector and trader of baseball cards and his budding entrepreneurial spirit spurred him to create Triple T’s Sports Collectibles, a national mail-order trading card and memorabilia business that found a wide audience through ads in trade magazines. While market inefficiencies were numerous in this pre-internet era, a young Tyler Tysdal experienced his first big business win with $14,000 a month of profit result. A lot of money for 14. It hit him during a ride with his mom to the post office to mail dozens of card shipments: He would likely be an entrepreneur and investor the rest of his career.

Additional Websites to Follow Tyler Tysdal

https://soundcloud.com/tylertysdal
https://twitter.com/tysdaltyler
https://www.instagram.com/tyler_tysdal/
https://tylertysdal.com/
https://sites.google.com/view/tylertysdal

What Podcasts on Instagram

Additional News Sources:

https://sites.google.com/view/howtosellabusiness/sell-your-business

https://tricitydaily.com/tyler-tysdals-freedom-factory-teaching-entrepreneurs-secrets-of-selling-their-business-for-maximum-value/

https://www.newswireunited.com/

Check out this episode from Freedom Factory!

What Contract Structure Should I Use to Sell My Business

Robert Hirsch, managing partner at Freedom Factory, founder of Freedom Factory, discusses the different types of contracts that you can use to sell your business.

What Contract Structure do I Need to Sell My Business

Stock Purchase Agreement or Asset Agreement? What's the Difference?

Read the Transcript Below

Hello, this is Robert Hirsch from Freedom Factory, and I want to talk to you about something that sometimes you get so involved in selling businesses that you don't realize that you have all these TLAs or three letter and acronyms that people don't understand. And so I just got a letter from one of my clients and he was talking about the difference between deal structure when selling a business.

And so we're going to cover what's the difference between a stock purchase agreement and an asset purchase agreement because they're, they're pretty fundamental and often in the LOI or the letter of intent, it's going to be listed whether they want to do a stock purchase agreement or an asset purchase agreement.

And so as both a seller and a buyer, often if you don't know which one to do, and I'll give you exceptions to the rule before we get through the entire video. But I like asset purchase agreements and there's some fundamental differences, and I'm going to go into those right now. So an asset purchase agreement means you're buying the assets of a company.

So you're going to set up another shell company and are going to buy the assets and you're going to put it in there. So. Uh, for example, when I was buying a, I personally bought a boat company I boat manufacturer for, for fly fishing. And many of you that know me know that I love to fly fish and we're up here in my mountain house right now and it's a raining day.

And I decided it's probably good to get some work done. So I bought it with an asset purchase agreement. And so when you do that, all you have to do is just get the assets of it and put it in there. So the differences are the liabilities of the old company. Don't transfer. So if they owe the bank $100,000 you buy the assets and you put them in there and they're unencumbered, and then they have to pay off the debt.

Obviously, if somebody has a loan on it, you can't sell the assets out from under them. So they're going to have to clear that debt with the proceeds and we can handle that in escrow. But an asset purchase agreement is means you're just buying the assets of a company. So it's not your job to find every liability that they have that sticks with the, with the other company.

So conversely, if you do a stock purchase agreement, now the due diligence is much harder. You have to find all the debts of the company, and often they, you can make promises or reps and warrants in the contract of what that means. But a stock purchase agreement means you're buying all the assets, all the liabilities of the company.

And sometimes you can do things like have the seller warrant certain risks and there's ways to do it, but stock purchase agreements are much more complicated. 80 to 90% of the deals that we see on high growth lifestyle companies are asset purchase agreements. Sometimes with our bigger companies, or they have a lot of IP or licensure, intellectual property.

And licenses. Stock purchase agreements make more sense. For example, uh, if you bought a company and it had a lot of licensure, let's take the boat manufacturer, right? We were licensed as a U S coast guard, uh, approved manufacturer. We were a boat dealer. We also were a car dealer because we had to put tags on the trailers for them to drive it home.

And we were ironically an auto manufacturer because we had to make the trailers and put a VIN on it. So that's a lot of licensure. It's a lot of one to three day classes, uh, that we had to take. So in that circumstance, when there's a lot of licensure, you can, if you want to, you can do a stock purchase agreement and the licenses transfer with the company.

Again, you have to be a little bit more careful about your diligence and making sure that you identify all the liabilities that the company might be exposed to. That includes environmental risks and business risks. So if you're not sure what to use, 80 to 90% of the. At the time, I would really recommend an asset purchase agreement.

If it's a company with less than $20 million in sales. There's obviously exceptions to it, and if you have any questions about what those exceptions are, what it looks like, why don't you just give us a, call it at freedom factory. You know, we have, you know, great middle of the fairway S PAs and APA has their stock purchase agreements and asset purchase agreements you can take to your attorney.

At Freedom Factory®, we have experienced and witnessed the explosive results of entrepreneurs aligning passion and purpose to create extraordinary value. However, most entrepreneurs have no idea how to maximize the value of their business and move on to the next chapter of their lives. That’s where we can help.

Freedom Factory® has radically disrupted the way high-growth, lifestyle companies are bought and sold, which historically was a horribly inefficient market. When I sold my first company in the 1990s, I went to several investment banks and sold my business to one of less than five companies they called. Looking back, I see exactly how much money I left on the table and knew that there had to be a better way. The bottom line is that entrepreneurs don’t speak banker, and bankers sure don’t speak entrepreneur.

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Contact Tyler Tysdal at Freedom Factory

Freedom Factory
5500 Greenwood Plaza Blvd., Ste 230
Greenwood Village, CO 80111
Phone: 844-MAX-VALUE (844-629-8258)
https://freedomfactory.com/about-tyler-tysdal/

Freedom Factory Managing Partners

Tyler Tysdal https://www.linkedin.com/in/tyler-tysdal
Robert Hirsch https://freedomfactory.com/about-robert-hirsch

Who is Tyler Tysdal?

Tyler Tysdal is a lifelong entrepreneur who first discovered the joys and challenges of self-employment at the age of 14. Tyler Tysdal was a collector and trader of baseball cards and his budding entrepreneurial spirit spurred him to create Triple T’s Sports Collectibles, a national mail-order trading card and memorabilia business that found a wide audience through ads in trade magazines. While market inefficiencies were numerous in this pre-internet era, a young Tyler Tysdal experienced his first big business win with $14,000 a month of profit result. A lot of money for 14. It hit him during a ride with his mom to the post office to mail dozens of card shipments: He would likely be an entrepreneur and investor the rest of his career.

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Big Mistakes Sellers Make Before Selling Your Business

Today's episode of the podcast, Robert Hirsch from Freedom Factory, discusses "Big Mistakes Sellers Make Before Selling Your Business."

 

Listen to the podcast, watch the video, or read the transcript below.

Additional Videos From Freedom Factory

How to Buy a Business When You Don't Have the Cash

What Are the Types of Business Buyers?

 

Transcript of Podcast

Hey guys! Robert from Freedom Factory here, and I want to talk about something that comes up a lot when we start working with new sellers, and usually it sounds something like this, should I start a new revenue stream? Should I add a new channel? Should I build an affiliate program before I sell? And while this sounds like a good idea on the surface, in reality, not so much. And the reason for that is twofold. One, when you start a new revenue stream, it's going to burn as inefficiently as possible. And what I mean by that is your customer acquisition cost is going to be the highest and you're not going to add significantly to your bottom line.

Now, most of the time when you sell your business, it's a multiple of earnings. So you want to optimize for earnings. And so let's say for example you could build a new revenue stream, but you're not actually adding a lot of profits. Conversely, you could spend that same time taking your existing revenue stream and for example, let's say you can find an extra $200,000 in profitability through cost cutting on that.

Now that $200,000 in earnings, not only did you make that the first time, but if you sell for five times earnings, that's going to be another million dollars in revenue, or another million dollars in valuation to your business. And ultimately it's these little tips and tricks that make the difference whether you stick the landing or not, you're a business you've worked for years on, and it's the most important asset that you have.

And frankly, sticking the landing is just as important as building and creating a great company. If you have questions about this or anything else, why don't you give us a call it Freedom Factory. We look forward to speaking with you soon.

 

Thank you so much for watching. Please like and subscribe and we'll see you soon.

 

Contact Freedom Factory

Freedom Factory
5500 Greenwood Plaza Blvd., Ste 230
Greenwood Village, CO 80111
Phone: 844-MAX-VALUE (844-629-8258)
https://www.freedomfactory.com/
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Check out this episode from Freedom Factory!

How To Prepare My Business To Sell

Listen to Robert Hirsch from Freedom Factory talk about the steps you should take in preparation for selling your business. If you're interested in finding out how to get the maximum value for your business, contact Tyler Tysdal at Freedom Factory today.

Contact Freedom Factory

Freedom Factory
5500 Greenwood Plaza Blvd., Ste 230
Greenwood Village, CO 80111
Phone: 844-MAX-VALUE (844-629-8258)
https://www.freedomfactory.com/

How to Prepare My Business To Sell

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Read the Podcast Transcript below

Hi, Robert Hirsch from Freedom Factory here. And I want to talk to you about one of the most common questions that we get here, which is, how do I get my business ready to sell? Or I've decided I want to sell my business. Now what? Well, the first thing you need to do is to get your house in order to prepare your business to sell. So go and get two or three years of tax of tax records.

And financials and put those together. Get them from your accountant and get them ready to go. Second, if you haven't put together an operations manual, this would be a great time to do so. You know how your business works, you know how the different departments interrelate, but when you sell your business, we want to make it as easy as possible to transition to a new owner.

And that value is going to be reflected in the sales price. So go put your operations manual and new job descriptions together and get your house in order. And the third piece is find, you know, put your team together. Find a great broker and an appraiser. Get an idea of what your business is worth. Start to craft the story and figure out, okay, how are we going to take it to market?

When are we going to take it to market? You know, what's the current tax environment. You know, how can I recast my financials? And what I mean by that is really simple. They're going to, we're going to take your EBIDTA or your accountant can do the same thing, and we're going to translate it into seller's discretionary cash flow, which is.

A fancy way of saying all the money that your, that your business creates when you do your tax returns. It's a game of minimization, right? Tax evasion is illegal. Tax avoidance is very smart. So you're trying to pay as little tax as you can. Well, we need to translate that, you know, from some of your non-cash expenses, depreciation, you know, some of your discretionary stuff and add that back in to maximize the value accurately.

Flag all the value that your business creates, and that's gonna make a big difference. And finally, you know, what industry are you going to be in? How do we maximize your multiple? And there are ways to be able to do that. But think about what industry you're in. Figure out, you know, all your financials.

Put an operations manual together to make the transition as easy as possible. And all of this is going to be, is going to help you when you put the right team. Find the right appraisers, find the right brokers to help you prepare your business to sell, and if you need any help with this, give us a call here at Freedom Factory.

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