Take the money and run. How and when to sell for top dollar.

"Honey, I sold the Company."

David was a CEO client of mine for over twenty years. He would still be a client today if I hadn't negotiated the sale of his company and made him rich. The funny thing is that I have another CEO client, also named David, who sold his company for a lot of money as well.

They had more in common than their first name. Two things set them apart from many other CEOs.

1. They knew their businesses very well.

2. They knew when it was time to get out.

   
   

Know your business

Once, I seriously irritated the first David. I asked him if he knew his business. "Yeah, I know my business." Unsatisfied that he hadn't really thought about it before, he answered, I asked again, "Seriously, how well do you really know your business?" Once again, he said, "Yes, I really, really know my business." Undaunted, I continued challenging him with the same simple question. Finally, he broke down like a criminal suspect under interrogation. "Alright, I guess I really don't know my business."

When he thought about it, he realized he knew his business only superficially. Of course, he knew what business he was in, his numbers, who his competition was, and how well his team stacked up. When he really thought about it, David realized that he did not know the dynamics underlying his business and his industry. Was it really the same business he had started 20 years earlier? And the answer was a resounding no. Armed with fresh insight, he reinvented his company and the entire industry. That was before we referred to such CEOs as Disrupters. He reinvented how they charged for their service and significantly increased their profitability without losing market share. As a result, we sold his company for a premium price because he had positioned the company in line with the real needs of his customers.

Know when to get out

The second David knew his business and his industry exceptionally well. And he knew that "they were coming after him." Some very large competitors had identified his niche and were beginning to make inroads. The clock was running, and he either needed to make serious investments in his business and scale up or consider selling out. He approached the proverbial bear that was chasing him through the woods. And he made a compelling case that his company was worth more to them than it was to him, and they acquired him.

Both Davids knew their businesses, and when it was time to get out. They were tempted to stay in the game longer, negotiate a higher price, or find a better buyer. Then again, what if they didn't? In both cases, they sold at the right time for a very good price.

Here's the takeaway: Do you remember Michael E. Gerber's book "The E-Myth Revisited?" One of the main concepts of this book was to work on your business, not in it. Both Davids did that quite well. In the process, they commanded a premium price and were not essential to the company after the sale. They took the money and ran. Both had carved out a unique and premium position in their industry, built leadership teams that understood the business and industry, and installed management information systems that gave them critical information that kept them one step ahead of the bear.

Do you know your business?

Do you really know your business?

Please let me know if this resonates with you. It could be the beginning of a conversation that will change your life.

Liam Chismer

liam@chrismer.com