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

How to sell your business with Chelsea ClarkeToday, we’re talking about how to sell your business – and some things you can do now to set yourself up for a profitable sale later.

Because even if you just started a business, things do change over time and the day might come when you’re ready to sell.

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 those businesses.

Chelsea founded BlogsForSale.co, a boutique brokerage and marketplace for buying and selling niche websites, eCommerce sites and media properties. She’s obsessed with the strategy behind growing an online business, from growth-hacking to funnels to creative monetization.

BUSINESS BUILDING INSIGHTS

  • Enjoy the journey.
  • Focus on what you are doing, believe in your vision, and stay focused on that path.
  • Find and connect with the people who will become your customers and your community.
  • Collect email addresses.  Focus on growing your list and building that relationship with your community through newsletters.

Thinking Ahead For How To Sell Your Business

  • Don’t put your name on anything that you might want to sell down the road.
  • What really cool product (whether it’s digital, or physical) can you create that doesn’t rely on you being the one to be able to provide it?
  • Even when you first start building your business or are just coming up with a business idea, have an exit plan or even just an idea of an exit strategy, right from the start.
  • Be consistent about tracking your profit and loss. It’s easy for the buyer to see where they might be able to fit in the business and what expenses they can expect.
  • Set up Google Analytics on your website right from day one. Every potential buyer will want to check the analytics to confirm you really are getting the traffic.
  • Common mistake: Don’t slack off on your business when you put it up for sale. It’s important to continue to actively run the business – make sales, drive traffic, etc.
  • Tune in for TONS more fascinating details and tips on selling a business! 

Resources Mentioned

Chelsea’s Contact Links

WebsiteFacebook | Instagram


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Transcript
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Gift biz unwrapped episode 314.

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Pretty soon people started asking me,

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Hey, can you help me sell my business?

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

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Can you Help me find a buyer attention?

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Gifters bakers,

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crafters, and makers pursuing your dream can be fun.

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

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Now you are in the right place.

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This is gift to biz unwrapped,

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helping you turn your skill into a flourishing business.

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Join us for an episode,

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packed full of invaluable guidance,

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resources, and the support you need to grow.

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Your gift biz.

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Here is your host gift biz gal,

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Sue moon Heights.

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Hi there.

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

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here today.

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One of the biggest challenges I hear over and over again

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from women who are considering turning their hobby into a business

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

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

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products in the first place.

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Maybe this sounds a little bit like you,

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you see people all around opening businesses,

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selling their handmade creations.

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I mean,

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

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and then you wonder,

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how did they make it happen?

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And now there are other questions too,

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

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a business and our handmade products,

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something people even buy these days to find out the answers

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

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turn your handmade products into an income producing business.

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In this class,

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we cover things like the current state of handmade products,

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

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When you sell your products,

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how to find customers who are the perfect fit for what

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you sell and the secret to having loyal customers who are

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

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what would knowing these things mean to you?

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Solid confirmation,

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that starting your business is not only possible,

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but a good idea how to determine pricing so that you

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can make money selling your products,

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how to find customers who are a perfect fit and the

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secret to having loyal customers who will buy from you again

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and again,

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

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to miss it.

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It starting soon and totally free to select a time that

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works for you.

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Go to gift biz,

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

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forward slash masterclass.

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Okay. Important topic today.

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And once you hear it,

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

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to you.

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We're talking about selling your business.

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I know,

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

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or you may be saying to yourself that your business could

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never be worth enough to sell.

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How do you know that?

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

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MBA is talk about naming your business.

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And with that comes the consideration of whether someday you might

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want to sell.

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I can tell you from experience that your passion or opportunities

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might change as time goes on.

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What if you were able to make thousands of dollars from

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your current business,

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if you decide to move on to something else,

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have I got you thinking now?

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So Today it is my pleasure to introduce you to Chelsea

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Clark. Chelsea is a content monetization,

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strategist, and business broker.

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She helps investors acquire profitable online businesses while providing a way

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for content creators and small business owners to have gainful exits

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from these businesses.

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Chelsea founded blogs for sale.co

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

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e-commerce sites and media properties.

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

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growth hacking to funnels,

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to creative monetization.

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

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her because some of us think about selling our businesses,

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some of us don't,

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but I think we should enter in eyes wide open,

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regardless of which choice we make with that.

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Chelsea, welcome to the gift biz on wrapped podcast.

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

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really excited and honored to get to be here and chatting

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with you.

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I have a lot of questions for you,

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as I told you in the pre-K,

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but before we get started,

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

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tradition on the show.

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And that is getting to know you in a little bit

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of a different creative way,

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and that is through a motivational candle.

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So if you were to describe for us a candle that

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really would resonate with you,

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what would it look like by color?

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And then a quote?

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Well, I love this question.

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It's so creative.

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

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So amazing.

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I would say,

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as an entrepreneur,

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you really need to be able to burn for yourself because

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what does a candle do?

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

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

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on your own.

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You don't have a team yet.

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You really need to have a flame that burns inside of

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

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when they're getting their business started,

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

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They don't get it.

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

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business on Facebook,

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that sort of thing.

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And I always,

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you have to just focus on what you were doing and

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

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

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

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WIC list candle more,

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or like a Centennial light,

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

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And for the color,

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I would say gold because it's powerful.

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

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And it is you will be defined not just by what

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you achieve,

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but by how you survive.

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So that is what my candle would be.

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If I was representing myself through what Is beautiful,

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so creative and interesting and speaks a real truth.

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And even if we have spouses,

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friends who are supportive of the business,

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

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the business,

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right? I mean,

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at some point you have to have a community of people

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who are on a mission,

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not exactly like yours,

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but similar to yours.

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So they understand it and get you Absolutely.

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And your friends and family,

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they love you,

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but they're not your target market,

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

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You don't need them to have your back.

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It's nice to have that support,

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but really you just have to focus on reaching the people

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

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on And the whole burn for yourself idea.

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So true.

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Because those times when it gets harder and you have to

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really dig down deep in yourself,

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you have to have that passion.

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

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be able to access it when you really need it in

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your business,

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

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

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Yeah, absolutely.

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Give me a little bit of a backstory about how you

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got to where you are today with blogs for sale.

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Absolutely. So I started in marketing myself.

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I went to school for marketing and I was working days

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building websites and creating campaigns and marketing campaigns for corporations.

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And I loved the work.

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I really connected with the projects,

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but I always felt there was just something missing with the

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actual job itself,

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having to go and work for someone else,

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

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I knew I wanted to do something where it was on

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my own terms.

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And blogging was something that I just did as a hobby

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for many,

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many years.

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It was a creative outlet and I never really thought of

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it as a business.

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And for a long time,

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I didn't monetize it.

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And then one day I really just put two and two

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

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with marketing and I put it into my blog content and

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I start creating content about interesting products and interesting things that

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I enjoy,

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that's where my business could become.

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So I just went all in.

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I quit my job.

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

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blogging my main focus and the company that I was working

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at when I was quitting,

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it was a business brokerage.

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And I was in the marketing department there.

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And they were very focused on,

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well, completely.

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It was brick and mortar businesses.

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So selling brick and mortar businesses,

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they were the brokers in between the buyers and sellers.

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And I really resonated with that.

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I found that very interesting,

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but for me,

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I was drawn to online businesses.

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So digital product creation,

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businesses and e-commerce and blogging as a business.

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

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I decided,

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Hey, I'm going to sell it.

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I put it up for sale.

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

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And then I started doing,

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I started creating websites,

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these little startup businesses,

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and then selling them for profit.

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A couple of times a year.

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Pretty soon people started asking me,

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Hey, can you help me sell my business?

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

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Can you help me find a buyer?

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And soon enough,

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I realized that I had to have a place where everybody

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could come and do this.

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So I created blogs for sale.co,

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which is a marketplace and brokerage,

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

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So they can buy and sell businesses.

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And it has grown from there.

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So that is my passion and my thing now.

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

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And it's really exciting to get,

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

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Like we were talking about a moment ago,

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are they,

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if their passions have changed,

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they're just not interested in their business.

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

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die out.

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They're able to sell it,

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earn a profit and the business can go on with someone

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new at the wheel.

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So that is how I got started.

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And that's where I'm at now.

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That's amazing.

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

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the full life of a business.

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Do I teach people how to do that?

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Including the very end.

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Like there comes a time when either you have to reposition

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because your product is no longer relevant as culture changes or

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to your point,

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you're just tired.

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

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

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elsewhere. They're not done with business.

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There is something else that's caught their eye.

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That's right.

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

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because I feel like,

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

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I'm making a little side angle here.

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I love that.

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

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products and digital online.

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So you have the whole umbrella of all of it.

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When do you think people should consider or have in their

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head, what the end goal is the business.

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And I guess I'm asking,

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because I kind of feel,

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

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have conversation around it.

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

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coming from.

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

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of your business when you need to be considering the end

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

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other places.

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

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because you haven't even opened the business yet,

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but there are some things to put in place.

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If you do want to sell to make it easier down

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the road.

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

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no. Your thoughts on that.

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I absolutely agree with you.

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And I think that for anyone who is building a business

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or coming up with a business idea,

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have your exit plan,

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or even just your idea of an exit strategy,

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right from the get-go.

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So, you know,

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

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want to take it,

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but you go into it with the understanding that things can

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

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down a different path.

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So what are you going to do with this business that

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

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intend to do later?

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It's just a good planning,

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I think.

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

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day you launch.

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Of course not.

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But just having an idea of,

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will I run this business until the day I die or

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will I sell this business in 10 years,

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make my profit,

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and then put that towards the next step.

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For me having an idea,

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some foresight or just an idea of where you might take

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it is I think really important.

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Yeah. Or you might even say,

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

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but maybe I would.

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That's right.

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

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personal brands,

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if you're a coach maybe,

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and it's under your name,

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

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road, right.

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

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If it is your name,

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the business,

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if it's your name.

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

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else being able to run down the road,

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it's not a bad idea.

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Just to think up some creative ideas of what you might

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want to do when that day comes,

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just see ahead.

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Right? You brought up a good point.

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

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like name of your company and the style,

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let's say you make jewelry for example.

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

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your name is the name of the company and you were

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to leave.

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

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Is the company less valuable because the name was associated with

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a person who's no longer there,

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not necessarily Thoroughly.

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A lot of the time when that happens,

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

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

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

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But when you sell,

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you sell a certain right to allow your name,

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to continue to be on the brand.

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

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Some businesses actually have a deal with the sellers that will

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allow them to use the sellers name,

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writing that email.

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

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even though they're long gone.

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And we see that a lot with blogs that became quite

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popular under a certain bloggers name.

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And then depending on the deal,

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

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on the site.

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Her picture is still there.

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Blog posts are still coming out with her name.

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It still sounds like her voice,

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but she's off on a beach somewhere.

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She hasn't touched the business in years.

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She got her payday and off.

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

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So when I sell a business,

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I don't put my personal name on it.

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And if my name was on it at the time that

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I sell it,

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I take my picture off.

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I take my photo off.

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I put up a stock image of a person.

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

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And you as the seller of your business,

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if it's a jewelry business,

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you have that decision for how the business would go.

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Is your persona going with it?

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

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And that gets put into the sale agreement so that all

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of those bases are covered.

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

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

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but the value of your business,

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doesn't go down.

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If your name is connected and your willing to let them

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continue with the name or if they rename it,

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I dunno.

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What do you say?

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

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That's what I would say.

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A lot of time.

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

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name on,

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because that keeps the value with it in a way so

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

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all of the people,

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the subscribers,

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the following,

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they either don't notice a disruption.

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And the name continues.

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I was just going to say,

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I also think it depends on how active someone is,

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if you're the name of your business,

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but you're never showing up,

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live on social.

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All your employees are maybe showing up,

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you know,

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

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So the live person that can still continue,

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

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related with you absolutely.

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That are still related with the business.

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

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business down the road,

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then you really want to think about whether you want to

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put your name as the company name.

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I think yeah,

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a hundred percent.

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I mean,

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think it through,

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I mean,

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you were saying it could go one way.

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It could go the other that's fine,

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but really make it a conscious decision.

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Absolutely. Make it a conscious decision.

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

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would intend to sell down the road.

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That's just how personally I would do it.

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

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business I'm running,

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my name will be my business.

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So I can create all of these starter companies.

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I always give them their own name,

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a brand name.

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

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going to sell.

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Right. So you have a number,

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All a company.

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That's your name?

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And then the businesses are established under that name.

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Oh yes,

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absolutely. And that's a great suggestion.

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Thank you for mentioning that.

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

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

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you've retained your name,

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but your name has been associated with that business up until

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the point that you leave.

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

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business that you would have that can be sold off that

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doesn't sell the rest of the company.

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Yeah. Okay.

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All right.

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So I think we've belabored that point enough,

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

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because they are the artists behind the product.

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Some of them are still sole proprietors.

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They haven't gone into LLCs or whatever.

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It would be natural for them to think,

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

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That was really a relevant thing to talk about.

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What are some other things that you think are important in

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the setup phase to be thinking about that are going to

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

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That's a great question.

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So when you are thinking about potentially selling your business down

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the road,

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

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like you would,

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but you really want to make sure that you have every

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month tracked in a spreadsheet where money is coming from how

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

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Because when you put your business up for sale,

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the buyers are going to need to see that before they

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ever consider making you an offer,

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they need the whole picture.

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

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

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for example,

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

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out, all of that stuff.

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You just want to keep a record of it and have

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it ready to go so that when you put it up

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for sale,

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

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able to fit in the business,

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what expenses they can expect,

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and then what they can anticipate they would have to do

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

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

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have Google analytics connected to your website.

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So your own website for this one,

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

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day one,

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

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see that you really are getting the traffic that you say

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you are.

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And if you're selling physical products,

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I know physical products can often have quite a bit of

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

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have to buy to run your business every bit.

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If you're making jewelry,

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every little element that it takes to actually put that jewelry

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together. So last year I sold a jewelry business.

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It was an Amazon FBA business and the seller was so

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on top of every bit of her records,

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that when it came time for me to take a look

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at everything and put together her profit and loss sheet and

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put together a package that a buyer would see,

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

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Someone who hasn't been there in the business,

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

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it all really made sense,

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

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So those are the basics.

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

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

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Okay. Perfect.

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So profit and loss virtually just doing standard regular bookkeeping.

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

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right? Exactly.

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

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right. In my local community,

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she had just opened her brick and mortar shop.

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And I walked in,

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we were talking about me coaching with her and to my

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horror, she,

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we were talking about her numbers.

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She pulls out how she was tracking sales.

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It was all on a piece of paper.

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And I'm like,

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Oh my gosh,

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how do you do your sales tax?

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She's like,

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I just add it all up every month.

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And I'm like,

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well, what if you get audited?

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Oh my gosh.

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And I know that exists.

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And people are just getting started.

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And especially for her,

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there were so much,

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

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not the business stuff behind it.

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Right. And she's in Scott,

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all of her ducks in a row.

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So everything was fine.

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But I think this just talks about the importance of having

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it done properly.

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

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place, right at the start.

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

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to put in at the start and then more common than

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more calm versus having to try and retrofit heaven forbid all

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this data in Definitely.

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And also another point I would add to that too,

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

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make sure that you start collecting email addresses from the beginning

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to not just your customers,

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

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to generate signups to your email list.

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

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with your community through newsletters,

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because that is another really valuable asset that you will have

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in your business when it comes time to sell.

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

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engaged people who open your emails,

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that's really attractive to buyers as well.

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

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that are important to have already established in your business,

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let's get to now,

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

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Okay. So all the accounting in mind,

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probably the processes to your point,

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where do you get the product?

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How much do you buy?

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Like all of that is partially in your accounting,

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

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So someone would know Google analytics.

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So how much business is being driven to your website?

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So the visibility of your company directly to your website.

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So you're saying Chelsea,

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not at T none of that,

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your website.

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Yes. Always good to have,

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you know,

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you have your SES and Amazon and everything,

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but you have to have your own home on your own

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website where you control everything,

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right. And the Etsy stuff isn't for,

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not because those sales are going to show up in your

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overall sales numbers too.

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Yes. It all comes together.

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These are just the different elements.

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Then you talked about email addresses.

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And again,

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we've talked a lot here,

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

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You don't really own their email,

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

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There's a lot of value to that.

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Would you say about social media followings?

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How important is that to a sale,

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To a sale?

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It's not as important as everything else,

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but it's a nice to have.

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

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where you focus a lot of your marketing,

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then that's important.

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Everything. When you sell your business,

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you're selling everything.

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So you're selling your social media accounts.

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Your everything goes with it as one nice package.

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And if you have engaged,

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active social followings with maybe 10,000

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people are just throwing a number out,

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that's good.

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It looks nice.

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And it just helps the overall sale,

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but it's not a necessity.

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

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really focused that much on social media,

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that's okay.

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

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super active on social media.

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It's just a nice to have,

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Could tip the balance.

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I mean,

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I just kind of think no matter what the numbers have

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to be solid,

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

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level too.

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And if they had an opportunity,

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all numbers being equal,

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let's say,

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and one company had a thousand Instagram followers and another had

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40,000 Instagram followers.

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I think they'd probably go because social credibility,

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we still put value on it,

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whether they buy or not,

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we still put value on it.

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Yes. Overall,

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not as important as the other three,

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for sure.

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Not as important as your sales.

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So how much is your business making?

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That is the first thing that buyers will look at.

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

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going along our business.

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Everything's good,

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we're happy.

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And then we decide that now is the time where we

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want to consider selling the business.

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How do we figure out what the value of the business

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is? Yes.

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As a broker,

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that is what I do.

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I give business valuations to people.

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If you are interested in selling your business,

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

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blogs for sale.co/v

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a L short for evaluation.

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And we take a lot of things into consideration.

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But the typical standard that a buyer will pay is up

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to three years,

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times your monthly revenue.

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So how much your business is making per month.

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And it's usually between two and three years.

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So three years would be the higher end two years.

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

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So that means two years times your monthly revenue between two

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and three,

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that standard monthly Gross revenue.

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

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when we're doing valuations.

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And then we take everything else into consideration too.

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So we look at your traffic,

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we look at,

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like, we're saying social media,

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

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We look at the actual on your website and on your

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sales pages,

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depending if you have digital physical products,

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

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

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

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In addition to that,

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we're also going to look at reviews.

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

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ready to sell your business,

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your business is primed in a good light,

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

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have a ton of bad reviews on Trustpilot or on your

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Facebook page.

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

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really is a legitimate,

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good business.

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And once we take all of that into consideration,

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

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And as a broker,

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all we can do is give you a suggestion based on

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the market value and all of the little elements that I

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was just mentioning there,

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really the selling price is completely up to you,

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the seller.

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So you can put it up for any price that you

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

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range as that is what buyers are used to and what

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to expect.

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And we see sites,

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businesses sell for more than the asking.

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We see them sell for significantly less.

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

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

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And the broker,

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

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

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

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parties, you are running your business,

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you don't have to worry about that.

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

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there, there's an offer on the table.

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

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to you and you can meet the buyer and then you

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have the opportunity to accept reject or counter.

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And once everything is happy,

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then we go into the next phase,

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

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But that is the listing process.

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Going back to the value of the business.

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I have three questions.

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Sure. One,

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what if you're a very inventory,

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rich business.

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So I have a product based business also,

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and I hold a lot of inventory.

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That's going to be needed to fulfill orders.

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Yes. So does that get calculated in?

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Sure does.

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Yes. So when we sell physical product businesses,

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we take into consideration the actual inventory that comes with the

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business and that could either be added into the valuation.

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So the buyer will be able to buy the business with

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a bonus of all of this inventory,

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or sometimes we have it where you have the price of

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the business,

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and then you also have to buy the inventory off of

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the seller.

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But again,

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that is personal preference to the seller.

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

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the inventory is included.

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So the price is higher and the inventory is included.

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Right. Okay.

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And equipment,

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same Thing.

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Exactly. Yeah.

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If you have a shop storefront,

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when it gets into that,

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then yeah.

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

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actual things that are coming with the business or machines,

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

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Okay. And then digital assets.

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Yes. How is that valued?

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Yes. The digital space is what we specialize in.

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So we're talking digital products like courses,

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eBooks, membership,

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sites, apps,

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things along that,

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

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

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Or if you have a membership,

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you have members,

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

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are paying monthly for that access.

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So that is taken into the valuation on the digital side

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as well.

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Okay. And then what about future potential?

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

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line with the trends.

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

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

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

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Yes. Is there anything there?

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So as far as the value,

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we can't value on potential.

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

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the future.

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We can only put the valuation on what has happened.

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The actual assets that are coming with the business and the

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actual sales that have happened.

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But if there is some standout opportunities there,

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

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we put that into the listing to let interested parties know

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about the potential.

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We're not putting it into the price.

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

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might have these sales in the future,

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

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new owner.

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

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may be able to do.

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But no,

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

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yet. That would be amazing,

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but we can't do that.

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No, but That makes sense.

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And I do feel like it's showing,

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you know,

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

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it shows potential and it gives them the vision for the

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path of what could be,

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which also could be the decision maker of whether they buy

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your business or they buy a different business.

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Absolutely. Yes.

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

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Opportunities for growth.

Speaker:

This is No interesting.

Speaker:

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

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us on this.

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

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You shared with us how you do the valuation,

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what you put into all the numbers and what you would

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then present to a future or potential buyer.

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And then what happens from there?

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Like what would we expect as someone buying a business and

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hiring You?

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What did I tell you?

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Super interesting episode.

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Isn't it?

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We will get right back to it.

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After a short break to hear from our sponsor.

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Yes, absolutely.

Speaker:

So if you are someone looking to buy a business,

Speaker:

you would go and you can take a look at the

Speaker:

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

Speaker:

the ins and outs of the business.

Speaker:

We can get the seller involved on the call so that

Speaker:

you can really understand his or her reasons for starting the

Speaker:

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

Speaker:

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

Speaker:

is because they want to focus on other projects.

Speaker:

Like you were saying,

Speaker:

Sue your passion as an entrepreneur,

Speaker:

isn't gone,

Speaker:

but you're passionate in that particular business.

Speaker:

Isn't where it used to be.

Speaker:

You've gone on to something else.

Speaker:

So that is what we see as a main reason when

Speaker:

it comes time that you want to make an offer on

Speaker:

a business,

Speaker:

that part is easy.

Speaker:

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

Speaker:

I present it to the seller.

Speaker:

They have the opportunity to accept or decline or send you

Speaker:

a counter.

Speaker:

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

Speaker:

then I provide the legal contracts of sale between the buyer

Speaker:

and seller.

Speaker:

And I open an escrow account and the escrow is used

Speaker:

as a secure third party holding.

Speaker:

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

Speaker:

and the buyer and seller,

Speaker:

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

Speaker:

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

Speaker:

once it's secured there and being held,

Speaker:

we then the broker and the seller,

Speaker:

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

Speaker:

So that's the actual website,

Speaker:

the domain access to your Etsy account,

Speaker:

access to your Amazon FBA or social accounts,

Speaker:

everything that comes with the business,

Speaker:

we just make sure that it gets to you securely and

Speaker:

in a timely fashion.

Speaker:

And then once you have everything on your side,

Speaker:

you then go back to escrow.

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You Mark that,

Speaker:

yes, you've received everything.

Speaker:

And then that releases the funds to the seller and it

Speaker:

officially closes.

Speaker:

And I always like to make sure that the sellers provide

Speaker:

30 days support to make sure that they can onboard and

Speaker:

train the new owner and just be there to assist.

Speaker:

And then for me,

Speaker:

I'm there to help you at any step.

Speaker:

At any time,

Speaker:

you can always send me an email.

Speaker:

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

Speaker:

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

Speaker:

And I also provide online courses to help you with the

Speaker:

next step so that you can take your marketing to the

Speaker:

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

Speaker:

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

Speaker:

there to help you with the next step.

Speaker:

So you can really grow and get a really good return

Speaker:

on your investment.

Speaker:

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

Speaker:

the seller and the buyer.

Speaker:

And as you were talking,

Speaker:

Chelsea, I was like,

Speaker:

almost tearing up thinking like,

Speaker:

you know,

Speaker:

when everything's done and you sign off,

Speaker:

you know,

Speaker:

this company that you've built,

Speaker:

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

Speaker:

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

Speaker:

But like,

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that's gotta be pretty emotional for the salad.

Speaker:

Yes, it is.

Speaker:

It's emotional.

Speaker:

Especially the first company that you sell,

Speaker:

the one that you grass root,

Speaker:

built yourself from your bedroom.

Speaker:

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

Speaker:

But when you made that decision that,

Speaker:

you know,

Speaker:

you've given it your all,

Speaker:

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

Speaker:

someone else and they can really run with it.

Speaker:

Then it's the right time.

Speaker:

You know,

Speaker:

that it's a good thing.

Speaker:

And especially then when you get that big payment into your

Speaker:

bank account from escrow,

Speaker:

it's a great day.

Speaker:

You're popping a bottle of champagne.

Speaker:

You're jumping around the room with your family.

Speaker:

It's a very happy day when that happens.

Speaker:

Yeah. Well,

Speaker:

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

Speaker:

going next?

Speaker:

That's right.

Speaker:

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

Speaker:

next adventure.

Speaker:

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

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Is there like a range?

Speaker:

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

Speaker:

I do 20%.

Speaker:

If the deal is under a hundred thousand dollars.

Speaker:

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

Speaker:

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

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over a hundred thousand dollars selling price,

Speaker:

then it goes to 15%.

Speaker:

Got it.

Speaker:

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

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a disaster,

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there's no records.

Speaker:

They have none of the information put together.

Speaker:

Do you even take on a client like that or what

Speaker:

happens then?

Speaker:

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

Speaker:

So I try to make it as easy as possible.

Speaker:

So folders that you can go around and collect what you

Speaker:

need to do before I can sign you on as a

Speaker:

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

Speaker:

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

Speaker:

analytics. I have everything kind of streamlined.

Speaker:

So if someone isn't as organized,

Speaker:

I can give you that little push to help you get

Speaker:

organized so that we can get your listing up.

Speaker:

If someone just straight up says,

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I can't it,

Speaker:

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

Speaker:

a client.

Speaker:

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

Speaker:

you're never going to be able to sell.

Speaker:

So it would not work out.

Speaker:

I don't think so,

Speaker:

but I've never run into that.

Speaker:

That's good to know.

Speaker:

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

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aren't even really ever thinking about selling.

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They're just closing.

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

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Just shut down?

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Well, I mean,

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

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

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

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course. Yeah.

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Like it's run its course,

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

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COVID right now,

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it's just not possible.

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

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

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

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We're in the,

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day-to-day running the business,

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but maybe someone else from the outside could see where they

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

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customers. Yes.

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Maybe there's still social media.

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I mean,

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you might pivot with the product.

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That's a good point.

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Yes. Could just be a pivot.

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And I think what 2020 taught us was the art of

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the pivot.

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I mean,

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we all had to figure out a way to make things

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work when suddenly everything changed and everything went online or we

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weren't able to even go get our groceries.

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I mean,

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

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So it's a good exercise to do regardless.

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Yeah. Boy,

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isn't that the truth,

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any mistakes that come to mind that you commonly see when

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someone is looking at selling their business,

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let's go with that angle.

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One thing that really stands out and I do have to

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

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they're not out yet.

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So a lot of times people will put up for sale

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and then they just mentally,

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they move on from it.

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

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

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you want to continue making sales.

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You want to continue driving traffic to your website or to

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your marketplaces.

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

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actively, just because it's up for sale.

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

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going to be looking at your business,

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they want an active business.

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They don't want an abandoned business.

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

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And just keep hanging in there,

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running the show,

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Which brings up another point.

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What about employees?

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Yes. Well,

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I'm just wondering if you have employees,

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they may or may not be interested in staying with the

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business. If it's sold,

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they may be working for you because they like the relationship

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you have.

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

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of different reasons,

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right? So where does that fall in the realm?

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I actually have a couple of questions for employees.

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

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employees play a role anywhere in their negotiations?

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They absolutely do.

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If you have employees,

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then a lot of the time that will be put into

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the sale agreement and you often will want to make sure

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that you are either including the opportunity for your employees to

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stay on.

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When you put your business up for sale.

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If it's a larger company,

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

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that the businesses for sale.

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

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

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they even see anything about the business.

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And that is done just because a sale could take a

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

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Oh no,

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the new owner might come in and fire me because we

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

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And I think that if you just lead from a place

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

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for you to sell,

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and you can expect that it could take six months to

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a year when you actually get to the point where you

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are in negotiations with a serious buyer,

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

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well, what are their plans for the company?

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Are they going to want to keep the employees on?

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Do they have their own team?

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And you just kind of play it by as things progress

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and every company will be different.

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

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that because it really depends on the individual business structure.

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

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We see companies that have virtual assistants.

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

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but the buyers they always ask,

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will your virtual assistant be willing to stay on?

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Can I keep her him on for a certain time?

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And that's just,

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then you just straight up ask your virtual assistant and you

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say, Hey,

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I'm thinking of selling this business.

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And I know that the buyer would be interested in keeping

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you on.

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Would you be open to that?

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No pressure.

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You just work one-on-one with them.

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And obviously any contracts that are in place,

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you know,

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all of that.

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Yes. Yeah.

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I was just thinking about employees.

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It is difficult from an emotional standpoint.

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Like when do you tell them,

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what do you say?

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You don't want to blindside people,

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

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That's a delicate dance.

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I think Definitely.

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

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

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not actually going to sell for another year.

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

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You wouldn't want that.

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Right. I did a blog post years ago.

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Now it was for my other company.

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My other company is called the ribbon print company.

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

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everything. And I did,

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it was actually a YouTube video.

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It's still up today.

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And it says,

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I'm moving on.

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And it had to do with what was coming next in

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the business.

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So enhancement,

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but people freaked out Because they thought you were leaving.

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Yes. And literally they totally freaked out,

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which in a way is good.

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So first I have say anyone who is a ribbon print

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customer of ours.

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

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not four years.

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So don't worry.

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

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say that.

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But there is something to that I think too,

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

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what's going to happen to sales.

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What if customer service isn't the same?

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What if all the systems are different?

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I don't know.

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I'm thinking from a personal perspective right now,

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but as a seller,

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if ever I decide to do that,

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I feel a loyalty to my customers.

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But if I don't own it anymore,

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

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them. Yes,

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

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or in your Facebook group,

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who you built a relationship with?

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I sold a mental wellness blog last year.

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It was one that I bought and I developed and I

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sold it.

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And while I was running it,

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I connected with so many people in the Facebook group.

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And when it was time to sell,

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that was a very crucial point that anyone that I met

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with any interested buyers,

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I said,

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these people in this group,

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they are such an amazing community.

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If you come in and you take over this business,

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I need to know that you are going to nurture that

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relationship and answer their questions.

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And you'll have someone there to support them.

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

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that have come around and rallied around your business because those

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people, yeah,

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they do go with the business too.

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I'm kind of wondering again with my scenario.

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What if you sold the business and to your point,

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you know,

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

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What if the roles reversed and they paid you or your

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

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okay. Yes.

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Something like that.

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So you can do creative.

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I'm sure.

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Like anything it's like buying a house.

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So like you write things into the contract,

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Right? That's right.

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

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So when you're working out a deal,

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you as the seller of the business,

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you have the creative right.

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To put in anything that you want to make sure that

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you're getting the deal that you want.

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Okay. Really interesting.

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In summary,

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I think now what would you say to somebody who is

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just starting their business,

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having listened to this and what would be the advice for

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

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Well, I would say,

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first of all,

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go you,

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

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please keep on doing it.

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

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

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but really take time to enjoy it.

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And if you're thinking,

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Hey, maybe I have an exit plan.

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Maybe I won't be running this forever.

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

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

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loss and building your lists.

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That's all really important.

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But also just think about how you can create a really

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cool product it's digital or physical,

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the really amazing,

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

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being the one to be able to provide it.

Speaker:

So something like coaching services,

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one-on-one type thing,

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where you are the person that serves the customer that is

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going to be harder to sell,

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not impossible,

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but it's definitely harder.

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So what can you create?

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In addition to that,

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like an online course,

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like an ebook,

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or like we're talking about jewelry,

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

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that you make.

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

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when it comes time to sell,

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thinking about someone else,

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being able to come on and be you and take on

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your responsibilities without you actually having to be there.

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Perfect love that.

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And I'm also thinking like guides,

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depending on what your jewelry,

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candles, cupcakes,

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special secret recipes,

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things like that.

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Things that can be duplicated,

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but not by you.

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Yes. All of that.

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

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here. Chelsea,

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what about someone who's listening and is like,

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Oh, new.

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Like I have none of this in place.

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My business is four years old.

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I better get things in line because you never know about

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the future.

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So what do you say to that person?

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Never too late to get organized.

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

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realize you haven't been doing this stuff,

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don't freak out.

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You have not failed.

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Just start putting things together,

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

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to sell or not,

Speaker:

it's just good to do.

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Good to keep things organized.

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And like I say,

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you can just start at any time.

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Okay. So no excuses.

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It's not too late.

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Just start,

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just do it.

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Yeah. Perfect.

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And honestly,

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everything that you've talked about are good,

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solid, foundational business practices to have in place.

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

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

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potential sale,

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it might also do a world of good for your business

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overall today when you put it in place.

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For sure.

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Wonderful Chelsea,

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this has been amazing.

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Where can people go to learn more about you?

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Well, thank you so much again for having me.

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This is honestly been so much fun.

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I am on blogs for sales.co.

Speaker:

So that's blogs for sale dot C O.

Speaker:

That is the marketplace where you can go and buy businesses

Speaker:

or sell your business.

Speaker:

You can go there.

Speaker:

I'll give you a free valuation.

Speaker:

If you want some tips and advice for potentially selling.

Speaker:

And I also have a website at her paper,

Speaker:

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

Speaker:

growth hacking tips.

Speaker:

We dig into funnels.

Speaker:

We dig into email list,

Speaker:

building lead,

Speaker:

magnets, all that great stuff that your business,

Speaker:

we all need it.

Speaker:

So it's all there.

Speaker:

And I would love it if you also checked out my

Speaker:

podcast, the her paper route podcast,

Speaker:

but thank you so much for having me.

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Wonderful. Well,

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thank you so much for being here.

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I really it take care of Chelsea.

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Thank you.

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You too.

Speaker:

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

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the sale of a business.

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

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would add value to the sale of your business are also

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solid business practices.

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

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the future.

Speaker:

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

Speaker:

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

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may be unintentionally guiding your prospects away from a sale.

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

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so far.

Speaker:

And finally,

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I want to slip in another reminder that you have only

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a short time to sign up for my free class,

Speaker:

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

Speaker:

Go to gift biz on rapt.com

Speaker:

forward slash masterclass there.

Speaker:

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

Speaker:

Thank you again for spending time with me today.

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

Speaker:

a rating and review would mean the world to me and

Speaker:

helps the show get seen by other makers.

Speaker:

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

Speaker:

Also make sure to follow the podcast.

Speaker:

So new episodes will automatically be downloaded to your phone.

Speaker:

That way you don't miss a thing,

Speaker:

including next week's super important,

Speaker:

special episode,

Speaker:

and now be safe and well.

Speaker:

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

Speaker:

unwrapped Podcast.

Speaker:

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

Speaker:

group called gift is breeze.

Speaker:

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

Speaker:

support each other.

Speaker:

Got a really fun post in there.

Speaker:

That's my favorite of the week.

Speaker:

I have to say where I invite all of you to

Speaker:

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

Speaker:

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

Speaker:

reaction from other people and just for fun,

Speaker:

because we all get to see the wonderful products that everybody

Speaker:

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

Speaker:

without doubt.

Speaker:

Wait, what,

Speaker:

aren't you part of the group already,

Speaker:

if not make sure to jump over to Facebook and search

Speaker:

for the group gift biz breeze don't delay.

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