314 – Things to Do Now to Sell Your Business Later with Chelsea Clarke

Gift biz unwrapped episode 314.

Pretty soon people started asking me,

Hey, can you help me sell my business?

I have a blog or I have a Amazon FBA business.

Can you Help me find a buyer attention?

Gifters bakers,

crafters, and makers pursuing your dream can be fun.

Whether you have an established business or looking to start one.

Now you are in the right place.

This is gift to biz unwrapped,

helping you turn your skill into a flourishing business.

Join us for an episode,

packed full of invaluable guidance,

resources, and the support you need to grow.

Your gift biz.

Here is your host gift biz gal,

Sue moon Heights.

Hi there.

It's Sue And I am so happy that you're joining me

here today.

One of the biggest challenges I hear over and over again

from women who are considering turning their hobby into a business

is that they don't know how to get started.

And they question whether it's possible to make money with their

products in the first place.

Maybe this sounds a little bit like you,

you see people all around opening businesses,

selling their handmade creations.

I mean,

they're on Etsy at craft shows promoting on Instagram,

and then you wonder,

how did they make it happen?

And now there are other questions too,

right? Like how does the pandemic affect the ability to start

a business and our handmade products,

something people even buy these days to find out the answers

I've put together a free class for you called how to

turn your handmade products into an income producing business.

In this class,

we cover things like the current state of handmade products,

how to determine pricing so that you can actually make money.

When you sell your products,

how to find customers who are the perfect fit for what

you sell and the secret to having loyal customers who are

going to come back and buy from you again and again,

what would knowing these things mean to you?

Solid confirmation,

that starting your business is not only possible,

but a good idea how to determine pricing so that you

can make money selling your products,

how to find customers who are a perfect fit and the

secret to having loyal customers who will buy from you again

and again,

that's all coming up in this class and you don't want

to miss it.

It starting soon and totally free to select a time that

works for you.

Go to gift biz,

unwrapped.com forward slash masterclass that's gift biz on rapt.com

forward slash masterclass.

Okay. Important topic today.

And once you hear it,

I don't want you to automatically think that this doesn't apply

to you.

We're talking about selling your business.

I know,

I know this may be the furthest thing from your mind,

or you may be saying to yourself that your business could

never be worth enough to sell.

How do you know that?

One of the things that we do very early Within maker's

MBA is talk about naming your business.

And with that comes the consideration of whether someday you might

want to sell.

I can tell you from experience that your passion or opportunities

might change as time goes on.

What if you were able to make thousands of dollars from

your current business,

if you decide to move on to something else,

have I got you thinking now?

So Today it is my pleasure to introduce you to Chelsea

Clark. Chelsea is a content monetization,

strategist, and business broker.

She helps investors acquire profitable online businesses while providing a way

for content creators and small business owners to have gainful exits

from these businesses.

Chelsea founded blogs for sale.co

a boutique brokerage and marketplace for buying and selling niche websites,

e-commerce sites and media properties.

She's obsessed with the strategy behind growing an online business from

growth hacking to funnels,

to creative monetization.

And I'm really excited for us to have a conversation with

her because some of us think about selling our businesses,

some of us don't,

but I think we should enter in eyes wide open,

regardless of which choice we make with that.

Chelsea, welcome to the gift biz on wrapped podcast.

Thank you so much for having me Sue I'm really,

really excited and honored to get to be here and chatting

with you.

I have a lot of questions for you,

as I told you in the pre-K,

but before we get started,

I'd like to do something with you that has become a

tradition on the show.

And that is getting to know you in a little bit

of a different creative way,

and that is through a motivational candle.

So if you were to describe for us a candle that

really would resonate with you,

what would it look like by color?

And then a quote?

Well, I love this question.

It's so creative.

I've never been asked a question like that before.

So amazing.

I would say,

as an entrepreneur,

you really need to be able to burn for yourself because

what does a candle do?

It burns out and burnout is a huge problem with entrepreneurs,

especially when you're in that startup phase and you're doing it

on your own.

You don't have a team yet.

You really need to have a flame that burns inside of

you. And I think thing that I see with people is

when they're getting their business started,

they get concerned because their loved ones don't see their vision.

They don't get it.

Maybe your friend isn't supporting or sharing your posts about your

business on Facebook,

that sort of thing.

And I always,

you have to just focus on what you were doing and

believe in your vision and keep on focused on that path.

So if we're talking about a candle that represents yourself in

business, I would say that you really need to have a

WIC list candle more,

or like a Centennial light,

something internal that stays on keeping you focused on your path.

And for the color,

I would say gold because it's powerful.

And the quote is one from Sheryl Sandberg that I followed.

And it is you will be defined not just by what

you achieve,

but by how you survive.

So that is what my candle would be.

If I was representing myself through what Is beautiful,

so creative and interesting and speaks a real truth.

And even if we have spouses,

friends who are supportive of the business,

they're only going to listen to you so much talking about

the business,

right? I mean,

at some point you have to have a community of people

who are on a mission,

not exactly like yours,

but similar to yours.

So they understand it and get you Absolutely.

And your friends and family,

they love you,

but they're not your target market,

right? You don't need them to be your customers.

You don't need them to have your back.

It's nice to have that support,

but really you just have to focus on reaching the people

who will become your customers and your community that you're focused

on And the whole burn for yourself idea.

So true.

Because those times when it gets harder and you have to

really dig down deep in yourself,

you have to have that passion.

Yes. So it had to have started there for you to

be able to access it when you really need it in

your business,

because there are always going to be times even successful people.

There's always times when you have to reach for that.

Yeah, absolutely.

Give me a little bit of a backstory about how you

got to where you are today with blogs for sale.

Absolutely. So I started in marketing myself.

I went to school for marketing and I was working days

building websites and creating campaigns and marketing campaigns for corporations.

And I loved the work.

I really connected with the projects,

but I always felt there was just something missing with the

actual job itself,

having to go and work for someone else,

as much as I love the people that I worked with,

I knew I wanted to do something where it was on

my own terms.

And blogging was something that I just did as a hobby

for many,

many years.

It was a creative outlet and I never really thought of

it as a business.

And for a long time,

I didn't monetize it.

And then one day I really just put two and two

together. If I take what I love and I'm skilled at,

with marketing and I put it into my blog content and

I start creating content about interesting products and interesting things that

I enjoy,

that's where my business could become.

So I just went all in.

I quit my job.

I didn't give myself a plan B and I just made

blogging my main focus and the company that I was working

at when I was quitting,

it was a business brokerage.

And I was in the marketing department there.

And they were very focused on,

well, completely.

It was brick and mortar businesses.

So selling brick and mortar businesses,

they were the brokers in between the buyers and sellers.

And I really resonated with that.

I found that very interesting,

but for me,

I was drawn to online businesses.

So digital product creation,

businesses and e-commerce and blogging as a business.

And so when I was building out my blog one day,

I decided,

Hey, I'm going to sell it.

I put it up for sale.

I was able to sell it for $50,000.

And then I started doing,

I started creating websites,

these little startup businesses,

and then selling them for profit.

A couple of times a year.

Pretty soon people started asking me,

Hey, can you help me sell my business?

I have a blog or I have an Amazon FBA business.

Can you help me find a buyer?

And soon enough,

I realized that I had to have a place where everybody

could come and do this.

So I created blogs for sale.co,

which is a marketplace and brokerage,

where I connect investors with content creators and small business owners.

So they can buy and sell businesses.

And it has grown from there.

So that is my passion and my thing now.

And it's really just taken off in the last year.

And it's really exciting to get,

to see so many people who may have been feeling burnout.

Like we were talking about a moment ago,

are they,

if their passions have changed,

they're just not interested in their business.

They don't want to just let it go and let it

die out.

They're able to sell it,

earn a profit and the business can go on with someone

new at the wheel.

So that is how I got started.

And that's where I'm at now.

That's amazing.

I have a program called maker's MBA and it goes through

the full life of a business.

Do I teach people how to do that?

Including the very end.

Like there comes a time when either you have to reposition

because your product is no longer relevant as culture changes or

to your point,

you're just tired.

Like you don't have that initial excitement that you used to.

And most of the time it's because the excitement has gone

elsewhere. They're not done with business.

There is something else that's caught their eye.

That's right.

Yes. So this is going to be a really interesting conversation

because I feel like,

and you're going to tell me because you're the expert and

I'm making a little side angle here.

I love that.

You've seen it from the brick and mortar standpoint and online

products and digital online.

So you have the whole umbrella of all of it.

When do you think people should consider or have in their

head, what the end goal is the business.

And I guess I'm asking,

because I kind of feel,

I'm going to tell you what I'm thinking and then we'll

have conversation around it.

Okay. Cause I want you to understand where this comment is

coming from.

Sure. I feel like there are certain parts in the development

of your business when you need to be considering the end

goal, like when you're naming the business or a couple of

other places.

So even though that's not even in your vision,

because you haven't even opened the business yet,

but there are some things to put in place.

If you do want to sell to make it easier down

the road.

And now I give you the platform to tell me yes,

no. Your thoughts on that.

I absolutely agree with you.

And I think that for anyone who is building a business

or coming up with a business idea,

have your exit plan,

or even just your idea of an exit strategy,

right from the get-go.

So, you know,

you're starting it and you have a plan of where you

want to take it,

but you go into it with the understanding that things can

change, your interests can change or your business could lead you

down a different path.

So what are you going to do with this business that

you're starting right now and having a plan for what you

intend to do later?

It's just a good planning,

I think.

And you don't have to have your buyer in mind the

day you launch.

Of course not.

But just having an idea of,

will I run this business until the day I die or

will I sell this business in 10 years,

make my profit,

and then put that towards the next step.

For me having an idea,

some foresight or just an idea of where you might take

it is I think really important.

Yeah. Or you might even say,

I don't know if I'd be interested in selling my business,

but maybe I would.

That's right.

Yeah. And especially when we're talking about people who are creating

personal brands,

if you're a coach maybe,

and it's under your name,

that's going to be a lot harder to sell down the

road, right.

You're probably going to want to hold onto the domain name.

If it is your name,

the business,

if it's your name.

But if you're starting a company that you could see someone

else being able to run down the road,

it's not a bad idea.

Just to think up some creative ideas of what you might

want to do when that day comes,

just see ahead.

Right? You brought up a good point.

Like if you're a personal brand or your products,

like name of your company and the style,

let's say you make jewelry for example.

And you're the artist behind all of your unique designs and

your name is the name of the company and you were

to leave.

So that means you're designing days are over for that brand.

Is the company less valuable because the name was associated with

a person who's no longer there,

not necessarily Thoroughly.

A lot of the time when that happens,

there's some element where the original owner is there in a

way. So maybe you're not physically still writing the emails.

You're not actually showing up at meetings or anything like that.

But when you sell,

you sell a certain right to allow your name,

to continue to be on the brand.

So an email that sent out it may mention your name.

Some businesses actually have a deal with the sellers that will

allow them to use the sellers name,

writing that email.

So it's as if they're still there at the wheel,

even though they're long gone.

And we see that a lot with blogs that became quite

popular under a certain bloggers name.

And then depending on the deal,

we've seen them go where that blogger looks like they're still

on the site.

Her picture is still there.

Blog posts are still coming out with her name.

It still sounds like her voice,

but she's off on a beach somewhere.

She hasn't touched the business in years.

She got her payday and off.

She went now that is not always the way it is.

So when I sell a business,

I don't put my personal name on it.

And if my name was on it at the time that

I sell it,

I take my picture off.

I take my photo off.

I put up a stock image of a person.

So that way my persona doesn't go with the business.

And you as the seller of your business,

if it's a jewelry business,

you have that decision for how the business would go.

Is your persona going with it?

That's a legal thing that you get into with your broker.

And that gets put into the sale agreement so that all

of those bases are covered.

I think what you're saying is it doesn't matter.

It's, it's a personal preference really,

but the value of your business,

doesn't go down.

If your name is connected and your willing to let them

continue with the name or if they rename it,

I dunno.

What do you say?

Well, the value of the business doesn't go down.

That's what I would say.

A lot of time.

We actually see buyers asking if they can keep the seller's

name on,

because that keeps the value with it in a way so

that then they can continue running the business under that name,

all of the people,

the subscribers,

the following,

they either don't notice a disruption.

And the name continues.

I was just going to say,

I also think it depends on how active someone is,

if you're the name of your business,

but you're never showing up,

live on social.

All your employees are maybe showing up,

you know,

if your face isn't all over as your person talking.

So the live person that can still continue,

because there are other elements of the business that aren't directly

related with you absolutely.

That are still related with the business.

Yes. But I still think that if you're considering selling the

business down the road,

then you really want to think about whether you want to

put your name as the company name.

I think yeah,

a hundred percent.

I mean,

think it through,

I mean,

you were saying it could go one way.

It could go the other that's fine,

but really make it a conscious decision.

Absolutely. Make it a conscious decision.

And don't put your name on anything that you think you

would intend to sell down the road.

That's just how personally I would do it.

I wouldn't sell my name with something because no matter what

business I'm running,

my name will be my business.

So I can create all of these starter companies.

I always give them their own name,

a brand name.

I wouldn't put my name on something that I know I'm

going to sell.

Right. So you have a number,

All a company.

That's your name?

And then the businesses are established under that name.

Oh yes,

absolutely. And that's a great suggestion.

Thank you for mentioning that.

Okay. Because then you still have your name on the business,

but when you sell whatever the name of the business is,

you've retained your name,

but your name has been associated with that business up until

the point that you leave.

Yes. I guess it would be sort of like a subsidiary

business that you would have that can be sold off that

doesn't sell the rest of the company.

Yeah. Okay.

All right.

So I think we've belabored that point enough,

but it's important in the industry of many of our listeners,

because they are the artists behind the product.

Some of them are still sole proprietors.

They haven't gone into LLCs or whatever.

It would be natural for them to think,

Oh, I'm just going to use my name.

That was really a relevant thing to talk about.

What are some other things that you think are important in

the setup phase to be thinking about that are going to

be important when you would sell your business down the road?

That's a great question.

So when you are thinking about potentially selling your business down

the road,

you're going to want to start tracking your profit and loss

like you would,

but you really want to make sure that you have every

month tracked in a spreadsheet where money is coming from how

many sales you had and exactly where the expenses are going.

Because when you put your business up for sale,

the buyers are going to need to see that before they

ever consider making you an offer,

they need the whole picture.

So they're going to want to see the numbers.

They're going to want to see screenshots from your Amazon,

for example,

the payments that you've received there and how you've been paid

out, all of that stuff.

You just want to keep a record of it and have

it ready to go so that when you put it up

for sale,

it's easy for the buyer to see where they might be

able to fit in the business,

what expenses they can expect,

and then what they can anticipate they would have to do

to grow the business from where it's at currently.

And you're also going to want to make sure that you

have Google analytics connected to your website.

So your own website for this one,

you're going to want to make sure that you're tracking from

day one,

because every buyer's going to want to check the analytics to

see that you really are getting the traffic that you say

you are.

And if you're selling physical products,

I know physical products can often have quite a bit of

expenses. So really having an itemized list of everything that you

have to buy to run your business every bit.

If you're making jewelry,

every little element that it takes to actually put that jewelry

together. So last year I sold a jewelry business.

It was an Amazon FBA business and the seller was so

on top of every bit of her records,

that when it came time for me to take a look

at everything and put together her profit and loss sheet and

put together a package that a buyer would see,

it was very streamlined and easy for me to see it.

Someone who hasn't been there in the business,

someone who is just looking at it for the first time,

it all really made sense,

and it was easy to put it together for someone else.

So those are the basics.

I would say that you'd want to make sure you have

set up if you're thinking you're going to be selling.

Okay. Perfect.

So profit and loss virtually just doing standard regular bookkeeping.

Yes. I mean just what you should be doing overall anyway,

right? Exactly.

Yes. I tell the horror story about somebody that I knew

right. In my local community,

she had just opened her brick and mortar shop.

And I walked in,

we were talking about me coaching with her and to my

horror, she,

we were talking about her numbers.

She pulls out how she was tracking sales.

It was all on a piece of paper.

And I'm like,

Oh my gosh,

how do you do your sales tax?

She's like,

I just add it all up every month.

And I'm like,

well, what if you get audited?

Oh my gosh.

And I know that exists.

And people are just getting started.

And especially for her,

there were so much,

she was decorating the shop and the excitement was the shop,

not the business stuff behind it.

Right. And she's in Scott,

all of her ducks in a row.

So everything was fine.

But I think this just talks about the importance of having

it done properly.

And it's so much easier when you put these things in

place, right at the start.

Absolutely. You only have maybe two or three or four numbers

to put in at the start and then more common than

more calm versus having to try and retrofit heaven forbid all

this data in Definitely.

And also another point I would add to that too,

is when you're working with all of this data,

make sure that you start collecting email addresses from the beginning

to not just your customers,

but have some sort of free lead magnet that you're using

to generate signups to your email list.

So you're focusing on growing your list and building that relationship

with your community through newsletters,

because that is another really valuable asset that you will have

in your business when it comes time to sell.

When you can show that you have this list of active,

engaged people who open your emails,

that's really attractive to buyers as well.

Right. For sure where we're at here in terms of things

that are important to have already established in your business,

let's get to now,

like, let's say you're considering selling.

Okay. So all the accounting in mind,

probably the processes to your point,

where do you get the product?

How much do you buy?

Like all of that is partially in your accounting,

right? But there has to be some way to track back.

So someone would know Google analytics.

So how much business is being driven to your website?

So the visibility of your company directly to your website.

So you're saying Chelsea,

not at T none of that,

your website.

Yes. Always good to have,

you know,

you have your SES and Amazon and everything,

but you have to have your own home on your own

website where you control everything,

right. And the Etsy stuff isn't for,

not because those sales are going to show up in your

overall sales numbers too.

Yes. It all comes together.

These are just the different elements.

Then you talked about email addresses.

And again,

we've talked a lot here,

Chelsea, about how important email is because you can contact them.

You don't really own their email,

but it's something that you can resource unless they opt out.

There's a lot of value to that.

Would you say about social media followings?

How important is that to a sale,

To a sale?

It's not as important as everything else,

but it's a nice to have.

So if your ideal customers are all on Instagram and that's

where you focus a lot of your marketing,

then that's important.

Everything. When you sell your business,

you're selling everything.

So you're selling your social media accounts.

Your everything goes with it as one nice package.

And if you have engaged,

active social followings with maybe 10,000

people are just throwing a number out,

that's good.

It looks nice.

And it just helps the overall sale,

but it's not a necessity.

So if you want to sell your business and you've never

really focused that much on social media,

that's okay.

You're not going to not find buyers because you haven't been

super active on social media.

It's just a nice to have,

Could tip the balance.

I mean,

I just kind of think no matter what the numbers have

to be solid,

but people still also buy and invest like there's an emotional

level too.

And if they had an opportunity,

all numbers being equal,

let's say,

and one company had a thousand Instagram followers and another had

40,000 Instagram followers.

I think they'd probably go because social credibility,

we still put value on it,

whether they buy or not,

we still put value on it.

Yes. Overall,

not as important as the other three,

for sure.

Not as important as your sales.

So how much is your business making?

That is the first thing that buyers will look at.

So we understand what we should have in place and we're

going along our business.

Everything's good,

we're happy.

And then we decide that now is the time where we

want to consider selling the business.

How do we figure out what the value of the business

is? Yes.

As a broker,

that is what I do.

I give business valuations to people.

If you are interested in selling your business,

you can go and I'll give you a free valuation of

blogs for sale.co/v

a L short for evaluation.

And we take a lot of things into consideration.

But the typical standard that a buyer will pay is up

to three years,

times your monthly revenue.

So how much your business is making per month.

And it's usually between two and three years.

So three years would be the higher end two years.

We're seeing most businesses sell at the 24 X multiple.

So that means two years times your monthly revenue between two

and three,

that standard monthly Gross revenue.

Yes. That is one of the things that we look at

when we're doing valuations.

And then we take everything else into consideration too.

So we look at your traffic,

we look at,

like, we're saying social media,

we see what's going on in your social accounts.

We look at the actual on your website and on your

sales pages,

depending if you have digital physical products,

we're looking at all of your marketplaces that you have.

And we're really just putting everything together to give a good

valuation. That really makes sense and is within the market value.

In addition to that,

we're also going to look at reviews.

So you're going to want to make sure that when you're

ready to sell your business,

your business is primed in a good light,

right? So we want to go and make sure you don't

have a ton of bad reviews on Trustpilot or on your

Facebook page.

We just want to make sure that the business you're selling

really is a legitimate,

good business.

And once we take all of that into consideration,

then we give you a report and a suggested listing price.

And as a broker,

all we can do is give you a suggestion based on

the market value and all of the little elements that I

was just mentioning there,

really the selling price is completely up to you,

the seller.

So you can put it up for any price that you

want, but we would recommend that you stay within that recommended

range as that is what buyers are used to and what

to expect.

And we see sites,

businesses sell for more than the asking.

We see them sell for significantly less.

There's so many factors that come into when you're actually you're

live. Your listing is live and you're having negotiations.

And the broker,

I take care of having to have meetings with potential buyers.

We're taking all of that off of your plate.

So we're having tons of emails throughout the day with interested

parties, you are running your business,

you don't have to worry about that.

And then once we find a good buyer and there's potential,

there, there's an offer on the table.

That's when we bring you in and we present an offer

to you and you can meet the buyer and then you

have the opportunity to accept reject or counter.

And once everything is happy,

then we go into the next phase,

which I'm sure Sue you'll want to get more into that.

But that is the listing process.

Going back to the value of the business.

I have three questions.

Sure. One,

what if you're a very inventory,

rich business.

So I have a product based business also,

and I hold a lot of inventory.

That's going to be needed to fulfill orders.

Yes. So does that get calculated in?

Sure does.

Yes. So when we sell physical product businesses,

we take into consideration the actual inventory that comes with the

business and that could either be added into the valuation.

So the buyer will be able to buy the business with

a bonus of all of this inventory,

or sometimes we have it where you have the price of

the business,

and then you also have to buy the inventory off of

the seller.

But again,

that is personal preference to the seller.

I like to do it where there's just one price and

the inventory is included.

So the price is higher and the inventory is included.

Right. Okay.

And equipment,

same Thing.

Exactly. Yeah.

If you have a shop storefront,

when it gets into that,

then yeah.

You're going to want to look at those assets and the

actual things that are coming with the business or machines,

it takes to create the products depending on what it is.

Okay. And then digital assets.

Yes. How is that valued?

Yes. The digital space is what we specialize in.

So we're talking digital products like courses,

eBooks, membership,

sites, apps,

things along that,

of course there's no physical inventory for a digital product,

but a lot of the time it will come with students.

Or if you have a membership,

you have members,

maybe if it's an app or a software there's people that

are paying monthly for that access.

So that is taken into the valuation on the digital side

as well.

Okay. And then what about future potential?

Like, let's say you have a business that is right in

line with the trends.

There's a huge opportunity for maybe retail placement of the product.

Like you can see the extension it's very clear to see,

but the current owner hasn't taken advantage of that yet.

Yes. Is there anything there?

So as far as the value,

we can't value on potential.

We can't put a price tag on what might happen in

the future.

We can only put the valuation on what has happened.

The actual assets that are coming with the business and the

actual sales that have happened.

But if there is some standout opportunities there,

and there's some really exciting possibilities that we're seeing,

we put that into the listing to let interested parties know

about the potential.

We're not putting it into the price.

We're not saying that it will be valued more because it

might have these sales in the future,

but we'll put it in actual text writing opportunities for the

new owner.

We're writing it out so that people can see what they

may be able to do.

But no,

I'm not able to charge more on something that hasn't happened

yet. That would be amazing,

but we can't do that.

No, but That makes sense.

And I do feel like it's showing,

you know,

if you're part of an industry and you see an opportunity,

it shows potential and it gives them the vision for the

path of what could be,

which also could be the decision maker of whether they buy

your business or they buy a different business.

Absolutely. Yes.

You definitely want to let people know what your ideas are.

Opportunities for growth.

This is No interesting.

Chelsea, thank you so much for sharing all your knowledge with

us on this.

So let's continue with the path we started down earlier.

You shared with us how you do the valuation,

what you put into all the numbers and what you would

then present to a future or potential buyer.

And then what happens from there?

Like what would we expect as someone buying a business and

hiring You?

What did I tell you?

Super interesting episode.

Isn't it?

We will get right back to it.

After a short break to hear from our sponsor.

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Yes, absolutely.

So if you are someone looking to buy a business,

you would go and you can take a look at the

listings. You can have a meeting with me to really discuss

the ins and outs of the business.

We can get the seller involved on the call so that

you can really understand his or her reasons for starting the

business, how they run it and why they want to sell

it. And usually the main reason that people want to sell

is because they want to focus on other projects.

Like you were saying,

Sue your passion as an entrepreneur,

isn't gone,

but you're passionate in that particular business.

Isn't where it used to be.

You've gone on to something else.

So that is what we see as a main reason when

it comes time that you want to make an offer on

a business,

that part is easy.

You just tell me the price that you'd want to pay.

I present it to the seller.

They have the opportunity to accept or decline or send you

a counter.

And then once we've reached a price and everyone's happy,

then I provide the legal contracts of sale between the buyer

and seller.

And I open an escrow account and the escrow is used

as a secure third party holding.

So this is so that I don't see your bank information

and the buyer and seller,

don't see each other's banking information that is all done through

escrow, where the buyer sends the money and escrow holds it

once it's secured there and being held,

we then the broker and the seller,

we then sent all of the files over to the buyer.

So that's the actual website,

the domain access to your Etsy account,

access to your Amazon FBA or social accounts,

everything that comes with the business,

we just make sure that it gets to you securely and

in a timely fashion.

And then once you have everything on your side,

you then go back to escrow.

You Mark that,

yes, you've received everything.

And then that releases the funds to the seller and it

officially closes.

And I always like to make sure that the sellers provide

30 days support to make sure that they can onboard and

train the new owner and just be there to assist.

And then for me,

I'm there to help you at any step.

At any time,

you can always send me an email.

We can always have another follow-up meeting just to make sure

that everything's rolling and you have everything you need.

And I also provide online courses to help you with the

next step so that you can take your marketing to the

next level so that you can build out the WordPress site.

If your site is on WordPress and everything's sort of covered

there to help you with the next step.

So you can really grow and get a really good return

on your investment.

Perfect. So we're kind of seeing the view from both sides,

the seller and the buyer.

And as you were talking,

Chelsea, I was like,

almost tearing up thinking like,

you know,

when everything's done and you sign off,

you know,

this company that you've built,

right. And how you feel in your heart for all the

reasons you're deciding you're going to go somewhere else.

But like,

that's gotta be pretty emotional for the salad.

Yes, it is.

It's emotional.

Especially the first company that you sell,

the one that you grass root,

built yourself from your bedroom.

That's always going to be the hardest one to see go.

But when you made that decision that,

you know,

you've given it your all,

and now it's reached a point where it should go to

someone else and they can really run with it.

Then it's the right time.

You know,

that it's a good thing.

And especially then when you get that big payment into your

bank account from escrow,

it's a great day.

You're popping a bottle of champagne.

You're jumping around the room with your family.

It's a very happy day when that happens.

Yeah. Well,

and then it's turned around face forward and where are you

going next?

That's right.

Yes. You have that money that you can put towards your

next adventure.

Yeah. What type of a percentage does a broker take?

Is there like a range?

Yeah. It's usually anywhere from 15 to 25%.

I do 20%.

If the deal is under a hundred thousand dollars.

So that's when we have the smaller businesses and the content

sites. And then when it's a larger business,

over a hundred thousand dollars selling price,

then it goes to 15%.

Got it.

And what about if you enter into a business and it's

a disaster,

there's no records.

They have none of the information put together.

Do you even take on a client like that or what

happens then?

Well, I give everyone a spreadsheet that I've made.

So I try to make it as easy as possible.

So folders that you can go around and collect what you

need to do before I can sign you on as a

client. So I provide resources to help you get there.

And I'll show you how to add me to your Google

analytics. I have everything kind of streamlined.

So if someone isn't as organized,

I can give you that little push to help you get

organized so that we can get your listing up.

If someone just straight up says,

I can't it,

then I'm not going to be able to take them as

a client.

Because if you can't get your records together to sell,

you're never going to be able to sell.

So it would not work out.

I don't think so,

but I've never run into that.

That's good to know.

Yeah. And probably people who don't have their records put together,

aren't even really ever thinking about selling.

They're just closing.

Yes. Is there any business that should never think about selling?

Just shut down?

Well, I mean,

if you're doing something that you think has obsolete,

if it's a business that just can't work,

that you don't see a way a possibility to run its

course. Yeah.

Like it's run its course,

or maybe it's a very in-person style company that now with

COVID right now,

it's just not possible.

But I never liked to think that something is not possible.

I feel like there's always a way to figure it out

and maybe we can't see it because we're in the mix.

We're in the,

day-to-day running the business,

but maybe someone else from the outside could see where they

could fix it or develop If it's a business there's still

customers. Yes.

Maybe there's still social media.

I mean,

you might pivot with the product.

That's a good point.

Yes. Could just be a pivot.

the pivot.

I mean,

we all had to figure out a way to make things

work when suddenly everything changed and everything went online or we

weren't able to even go get our groceries.

I mean,

we had to get really good at being able to pivot.

So it's a good exercise to do regardless.

Yeah. Boy,

isn't that the truth,

any mistakes that come to mind that you commonly see when

someone is looking at selling their business,

let's go with that angle.

One thing that really stands out and I do have to

remind people sometimes once they've put their business up for sale,

they're not out yet.

So a lot of times people will put up for sale

and then they just mentally,

they move on from it.

But you really have to still run your business while it's

yours. And especially while it's up for sale,

you want to continue making sales.

You want to continue driving traffic to your website or to

your marketplaces.

You want to make sure that you're still running the business

actively, just because it's up for sale.

That's not the time to check out because people who are

going to be looking at your business,

they want an active business.

They don't want an abandoned business.

So you just have to remember that it's not sold yet.

And just keep hanging in there,

running the show,

Which brings up another point.

What about employees?

Yes. Well,

I'm just wondering if you have employees,

they may or may not be interested in staying with the

business. If it's sold,

they may be working for you because they like the relationship

you have.

They're not interested in having a new boss for a number

of different reasons,

right? So where does that fall in the realm?

I actually have a couple of questions for employees.

Let me start with what's the value or do retention of

employees play a role anywhere in their negotiations?

They absolutely do.

If you have employees,

then a lot of the time that will be put into

the sale agreement and you often will want to make sure

that you are either including the opportunity for your employees to

stay on.

When you put your business up for sale.

If it's a larger company,

a lot of times companies don't want their employees to know

that the businesses for sale.

So that's when we wouldn't put the name of the business

up, there'd have to be an NDA that buyers signed before

they even see anything about the business.

And that is done just because a sale could take a

long time and you don't want your employees to think,

Oh no,

the new owner might come in and fire me because we

don't know what's going to happen yet.

And I think that if you just lead from a place

of, you have an idea of how long it's gonna take

for you to sell,

and you can expect that it could take six months to

a year when you actually get to the point where you

are in negotiations with a serious buyer,

then that's when you're going to talk to them about,

well, what are their plans for the company?

Are they going to want to keep the employees on?

Do they have their own team?

And you just kind of play it by as things progress

and every company will be different.

So I'm not able to just give a flat answer to

that because it really depends on the individual business structure.

And we also see a lot of in the digital space.

We see companies that have virtual assistants.

So they're not full-time employees and they work remotely,

but the buyers they always ask,

will your virtual assistant be willing to stay on?

Can I keep her him on for a certain time?

And that's just,

then you just straight up ask your virtual assistant and you

say, Hey,

I'm thinking of selling this business.

And I know that the buyer would be interested in keeping

you on.

Would you be open to that?

No pressure.

You just work one-on-one with them.

And obviously any contracts that are in place,

you know,

all of that.

Yes. Yeah.

I was just thinking about employees.

It is difficult from an emotional standpoint.

Like when do you tell them,

what do you say?

You don't want to blindside people,

but then you don't want to tell them too early.

That's a delicate dance.

I think Definitely.

Yeah, because you don't want to tell them too early.

And then they start looking for another job and maybe you're

not actually going to sell for another year.

And then you have people with one foot out the door.

You wouldn't want that.

Right. I did a blog post years ago.

Now it was for my other company.

My other company is called the ribbon print company.

And it's the best we have the best customers,

everything. And I did,

it was actually a YouTube video.

It's still up today.

And it says,

I'm moving on.

And it had to do with what was coming next in

the business.

So enhancement,

but people freaked out Because they thought you were leaving.

Yes. And literally they totally freaked out,

which in a way is good.

So first I have say anyone who is a ribbon print

customer of ours.

I am not looking to selling the business right now anyway,

not four years.

So don't worry.

Don't worry because I really do feel like I have to

say that.

But there is something to that I think too,

in terms of who's leading and if they leave,

what's going to happen to sales.

What if customer service isn't the same?

What if all the systems are different?

I don't know.

I'm thinking from a personal perspective right now,

but as a seller,

if ever I decide to do that,

I feel a loyalty to my customers.

But if I don't own it anymore,

I'm expecting the person who buys it to take care of

them. Yes,

absolutely. And the same with the people on your email list

or in your Facebook group,

who you built a relationship with?

I sold a mental wellness blog last year.

It was one that I bought and I developed and I

sold it.

And while I was running it,

I connected with so many people in the Facebook group.

And when it was time to sell,

that was a very crucial point that anyone that I met

with any interested buyers,

I said,

these people in this group,

they are such an amazing community.

If you come in and you take over this business,

I need to know that you are going to nurture that

relationship and answer their questions.

And you'll have someone there to support them.

You're going to want to think about all of the people

that have come around and rallied around your business because those

people, yeah,

they do go with the business too.

I'm kind of wondering again with my scenario.

What if you sold the business and to your point,

you know,

you kind of stick around for 30 days to help out.

What if the roles reversed and they paid you or your

employees a salary for 60 days just to make sure everyone's

okay. Yes.

Something like that.

So you can do creative.

I'm sure.

Like anything it's like buying a house.

So like you write things into the contract,

Right? That's right.

You customize it the way that you want to do it.

So when you're working out a deal,

you as the seller of the business,

you have the creative right.

To put in anything that you want to make sure that

you're getting the deal that you want.

Okay. Really interesting.

In summary,

I think now what would you say to somebody who is

just starting their business,

having listened to this and what would be the advice for

that newbie in terms of best advice for a future state?

Well, I would say,

first of all,

go you,

that is amazing that you're starting a business out there,

please keep on doing it.

That is the best thing is when you're creating your own

business and put your blinders on and just do the work,

but really take time to enjoy it.

And if you're thinking,

Hey, maybe I have an exit plan.

Maybe I won't be running this forever.

Like we've mentioned the basic things that you would be doing

anyway, like keeping track of your records and your profit and

loss and building your lists.

That's all really important.

But also just think about how you can create a really

cool product it's digital or physical,

the really amazing,

helpful product that you have that doesn't necessarily rely on you

being the one to be able to provide it.

So something like coaching services,

one-on-one type thing,

where you are the person that serves the customer that is

going to be harder to sell,

not impossible,

but it's definitely harder.

So what can you create?

In addition to that,

like an online course,

like an ebook,

or like we're talking about jewelry,

businesses, something where you can teach someone to make the thing

that you make.

That's always going to help you in the end,

when it comes time to sell,

thinking about someone else,

being able to come on and be you and take on

your responsibilities without you actually having to be there.

Perfect love that.

And I'm also thinking like guides,

depending on what your jewelry,

candles, cupcakes,

special secret recipes,

things like that.

Things that can be duplicated,

but not by you.

Yes. All of that.

Okay. So now I'm going to switch it up on you

here. Chelsea,

what about someone who's listening and is like,

Oh, new.

Like I have none of this in place.

My business is four years old.

I better get things in line because you never know about

the future.

So what do you say to that person?

Never too late to get organized.

You can start now if you're just listening now and you

realize you haven't been doing this stuff,

don't freak out.

You have not failed.

Just start putting things together,

start keeping track of things moving forward and whether you're going

to sell or not,

it's just good to do.

Good to keep things organized.

And like I say,

you can just start at any time.

Okay. So no excuses.

It's not too late.

Just start,

just do it.

Yeah. Perfect.

And honestly,

everything that you've talked about are good,

solid, foundational business practices to have in place.

Anyway, if you're thinking of putting them in place,

because you've heard the podcast and you think you should for

potential sale,

it might also do a world of good for your business

overall today when you put it in place.

For sure.

Wonderful Chelsea,

this has been amazing.

Where can people go to learn more about you?

Well, thank you so much again for having me.

This is honestly been so much fun.

I am on blogs for sales.co.

So that's blogs for sale dot C O.

That is the marketplace where you can go and buy businesses

or sell your business.

You can go there.

I'll give you a free valuation.

If you want some tips and advice for potentially selling.

And I also have a website at her paper,

route.com. That is where I share marketing and online business development,

growth hacking tips.

We dig into funnels.

We dig into email list,

building lead,

magnets, all that great stuff that your business,

we all need it.

So it's all there.

And I would love it if you also checked out my

podcast, the her paper route podcast,

but thank you so much for having me.

Wonderful. Well,

thank you so much for being here.

I really it take care of Chelsea.

Thank you.

You too.

So well now you're a whole lot wiser about what's behind

the sale of a business.

As you've heard putting some of the things in place that

would add value to the sale of your business are also

solid business practices.

Regardless. You never know what the future holds and talking about

the future.

I want you to specifically Mark your calendar for next week.

You're going to learn some eye opening things about how you

may be unintentionally guiding your prospects away from a sale.

Seriously. This is perhaps the biggest game changing episode for you

so far.

And finally,

I want to slip in another reminder that you have only

a short time to sign up for my free class,

how to turn your handmade products into an income producing business.

Go to gift biz on rapt.com

forward slash masterclass there.

You'll see all the details and be able to register.

Thank you again for spending time with me today.

If you'd like to show support for the podcast,

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So it's a great way to pay it forward.

Also make sure to follow the podcast.

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That way you don't miss a thing,

including next week's super important,

special episode,

and now be safe and well.

And I'll see you again next week on the gift biz

unwrapped Podcast.

I want to make sure you're familiar with my free Facebook

group called gift is breeze.

It's a place where we all gather and our community to

support each other.

Got a really fun post in there.

That's my favorite of the week.

I have to say where I invite all of you to

share what you're doing to show pictures of your product,

to show what you're working on for the week to get

reaction from other people and just for fun,

because we all get to see the wonderful products that everybody

in the community is making my favorite post every single week,

without doubt.

Wait, what,

aren't you part of the group already,

if not make sure to jump over to Facebook and search

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