Most business owners know they’re eventually going to leave their business; they just don’t particularly like thinking about it. For some, the plan is to sell. Others assume a kid or longtime employee will take over. And plenty keep saying they’ll figure it out “in three to five years,” which Devin W. Craig says is often just a comfortable way of putting off the conversation.
This week on The Entrepreneurial Journey, Dave sits down with Devin, Founding Partner at Verity Business Brokers and co-author of The Stewardship Exit. Devin has more than 15 years of deal-making experience and, with his partners, has helped sell more than $100 million in business value.
Interestingly, Devin got into this world by buying businesses himself. After essentially giving himself a YouTube education on acquisitions, he bought his first company, then another, then another. Eventually, other owners started asking for his help.
Twenty years of blood, sweat and tears might mean everything to the person who built the company, but buyers and banks are looking at the numbers. Devin explains why valuation starts with cash flow, and how recurring revenue, management, market demand and other factors can affect what someone is actually willing to pay.
They also get into the part of acquisitions that spreadsheets can’t capture: people. Devin has seen deals where teams stayed intact and others where most of the employees walked away. His advice to a new owner is pretty simple: don’t be a jerk. Come in and listen.
Most importantly, Devin believes exit planning should begin long before you’re ready to sell. What would you actually do if you weren’t running the business? What does the next chapter look like? Once you know that, you can start working backward and preparing the company to get you there.
You can learn more about Devin and Verity Business Brokers at VerityBrokers.com. Devin also offers listeners a free copy of The Stewardship Exit by reaching out through the website.
Get new episodes of The Entrepreneurial Journey automatically
