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How Not to Sell a Business

by Basil Peters on February 6, 2013 · 4 comments

This is the first time I’ve described all of the things we did wrong the first time I tried to sell a business. It’s also the story of the first time I lost several million dollars.

How Not to Sell a Business – Don’t Blow The Biggest Deal of Your Life

This is a talk I gave to the Vancouver Chapter of the Entrepreneurs Organization (EO) on February 19, 2009. It is consistently the most viewed video on my blog.

In this talk, I compare my first experience selling a business to a more recent one where everything was perfectly planned and executed.

PowerPoint PDF here

Highlights of Part 1:

How Not to Sell a Business Part 1

  • This is the first time I’ve described all of the things we did wrong the first time I sold a business. It’s also the story of the first time I lost several million dollars.
  • During this presentation, I compare my first business sale to a more recent one where everything was perfectly planned and executed.
  • My story begins with the launch of my first company, Nexus Engineering, while I was still in university.

Highlights of Part 2:

How Not to Sell a Business Part 2

  • I wish we had done a secondary sale before we sold the business.
  • I confess that we had never discussed our exit strategy.
  • We start to learn about exit strategies at the worst possible time.
  • We make the classic error of having the CEO sell the business.
  • I learn that every business sale needs multiple bidders.
  • What happened because we hadn’t checked the alignment on our exit strategy.

Highlights of Part 3:

How Not to Sell a Business Part 3

  • Painful lessons about how nasty take-over battles can get when you sell a business.
  • I was a rookie and ended up playing defense all the way through.
  • We finally get the business sold, but my regret was that we ‘rode it over the top’.
  • It took me another ten years to understand all the things we did wrong.
  • The truth is… we were lucky. To this day, I wish we’d had a good exit strategy and checked the alignment before we started to sell the business.

Highlights of Part 4:

How Not to Sell a Business Part 4

  • This is the story of the Parasun business sale – where we did everything perfectly.
  • We developed alignment on a simple exit strategy at an offsite planning retreat.
  • At Parasun, we successfully executed two secondary sales before we sold the business.
  • We sell the business right on schedule, but the price was 48% higher than the target.
  • A comparison on the Nexus and Parasun exits – what to do and what not to do selling your business.

Many of these lessons are described in my new book on selling businesses for entrepreneurs and angel investors – www.Early-Exits.com.

If you enjoyed this video, you might also like this one on Exit Strategies or this series on Maximizing Value in Business Sales.

{ 4 comments… read them below or add one }

From refurb on Hackernews March 2, 2013 at 6:07 pm

Great presentation! It gets right to the point and offer advise you can use.

I think it’s a good read for any entrepreneur. Selling your company requires planning from the start, before you’ve even made your first dollar.

Reply

Basil Peters March 2, 2013 at 6:08 pm

Refurb – glad you found it informative.

Reply

terry magee April 7, 2013 at 4:37 pm

great presentation, wish i had the information 30 years ago

Reply

Basil Peters May 13, 2013 at 4:08 pm

Hi Terry,

I wish I didn’t have to learn those lessons the hard way :-).

Basil

Reply

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