“What we broadcast predicts success.” @MichelleGielan
As leaders, we’re responsible for change management and communication in our organizations and communities. Michelle shares why it’s important to broadcast happiness and describes how we can be happiness broadcaster’s #4Change!
About the book –
We are all broadcasters. As managers, colleagues, parents and friends, we are constantly transmitting information to the people around us, and the messages we choose to broadcast create success or hold us back.
New research from the fields of positive psychology and neuroscience shows that small shifts in the way we communicate can create big ripple effects on business and educational outcomes, including 31 percent higher productivity, 25 percent better performance ratings, 37 percent higher sales, and 23 percent lower levels of stress.
In Broadcasting Happiness, Michelle Gielan, former national CBS News anchor turned positive psychology researcher, shows you how changing your broadcast changes your power by sharing jaw-dropping stories and incredible research.
About the Author –
Michelle Gielan, national CBS News anchor turned positive psychology researcher, is the bestselling author of Broadcasting Happiness. She is the Founder of the Institute for Applied Positive Research and is partnered with Arianna Huffington to study how transformative stories fuel success.
Michelle is an Executive Producer of “The Happiness Advantage” Special on PBS. At CBS News, Michelle anchored two national newscasts and produced “Happy Week,” a series focusing on fostering happiness in the midst of the recession. She holds a Master of Applied Positive Psychology from the University of Pennsylvania, and her research and advice have received attention from The New York Times, Washington Post, FORBES, CNN, FOX, and Harvard Business Review.
Source: Broadcasting Happiness website at http://broadcastinghappiness.com/
When should you start your exit planning? The time to be thinking about the sale of your company is when you start it. Everything you do from Day 1 should be focused on driving enterprise value upon sale.
Startup entrepreneurs typically fail to consider when and how they will prepare for an eventual exit. Thinking with the end in mind, companies manage their businesses better and that helps prepare them to sell.
What can I do to maximize the value of my business upon my exit?
Before you think about selling your business, you should (1) avoid preconceived ideas about what its value “should” be and (2) retain a qualified valuation expert or consultant to obtain a neutral third-party estimate.
Identify ways to enhance your company’s value in the eyes of a buyer.
- Synergies expected from a merger/acquisition
- Cash flow and profitability
- Supplier relationships
- Distribution network
- Quality and depth of your management team
- People and intellectual capital
- Quality and reputation of your business
- Customer relationships
- Growth trends for key products and services
- Intellectual property – patents, trademarks, brand
Your internal team
During divestiture, owners face one of their most sensitive and critical tasks determining those key individuals at the company who need to know about the transaction.
For owners, the art lies in forming the right internal team. The correct people must be identified to gather information and interact with buyers. At the same time, the group must be narrow enough to control the consistency of the seller’s message and minimize overall distraction from day-to-day operations. Generally, it’s best to keep the group as small possible, typically, 5 to 10 individuals. However, the circle may expand as the process progresses and as more and more internal leaders are needed to meet with buyers and demonstrate the depth of management.
Your external team of advisors
Given the limited bandwidth of a typical seller’s resources, the nuances of the process, and the fact that the sale often represents both a life-changing and once-in-a-lifetime event for owners, experienced external advisors, lawyers, accountants, and investment bankers, can be critical. Good advisors can smooth and accelerate the process while helping accurately recognize value and provide insight and guidance in complex areas. Finally, the objectivity that advisors provide can be crucial to owners faced with many emotional, highly subjective decisions.
Get a good adviser. Because selling can be the most important event in the life of your company, it is critical to have an experienced advisor in your corner – before it is up for sale. The right professional can help you navigate complexities and identify a buyer who represents the best fit and the highest price. Lawyers and accountants are advisers on their respective areas of expertise. Businesses brokers and for larger companies, investment bankers, are the advisers that will provide valuation advice, buyer solicitation and negotiation, and oversight on closing a transaction.
An experienced adviser can help negotiate the deal’s nonfinancial terms, such as your employees’ future, your ongoing role in the business, non-competes, and earn-outs. They can help develop an exit plan and determine the best timing and implications for your sale, which are important in an uncertain marketplace.
Determine the right type of buyer. The best buyers for your company may be unknown to you. They must have both the means to pay what your business is worth and the motivation to see the deal through. They also should have some strategic goal for acquiring your company, such as tapping into a new market. Understand the buyer’s motives, and you will be at an advantage when it comes to maximizing proceeds from the sale.
Have alternative buyers. With only one, you run the risk of weakening your negotiating position and giving up control over the transaction. More than one buyer in the process broadens your options and creates a more competitive environment. A buyer that bears consideration is a financial buyer, such as a private equity group. It will likely offer less money than a company seeking a strategic acquirer, but is often ready to move more quickly. Depending on the seller’s situation, a financial buyer may be the only option.
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Strategic Plan Sets the Foundation Annual Business Planning
Your company’s strategic plan creates a shared vision of what’s important to the organization and translates into a simple story about your organization’s future.
In a McKinsey Global Survey of more than 2,000 global executives, only one-third agreed that their corporate strategy approach represented “a distinct exercise that specifically addresses corporate-level strategy, portfolio composition issues.”
Increasing the time spent on strategy and involving more senior leaders in strategic dialogue makes it easier to stay ahead of emerging opportunities, respond quickly to unexpected threats and make timely decisions. An integrated PB&F framework links top-down, strategic targets to financial and operational bottom-up forecasts.
Key Questions To Answer When Preparing Your Strategic Plan
What is our purpose?
What do we do?
What is our picture of the future in three to five years?
Strategic Themes & Perspectives –
What performance lenses should we use to evaluate results?
What are our focus areas?
What do we do better than anyone else?
What results do we need to achieve?
What continuous improvement activities are needed to get results?
Strategy Map –
How do we create and improve value to customers and stakeholders?
Performance Measures and Targets –
How will we know if we’re achieving the results we want?
Strategic Initiatives –
What projects and programs will contribute to the desired results?
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Mistake #1: Going Solo
One of the biggest mistakes business sellers make is trying to do everything themselves. Very few owners have the time or experience to handle selling a company alone. Business brokers, exit planners, accountants, appraisers and other sale professionals streamline the process and ensure that your company is truly ready for prospective buyers. Pulling together a talented team of advisors should be one of the first things you do after you decide that it is time to sell.
Get a broker or investment banker involved. Selling a business on your own is doable, but the ongoing negotiations can be distracting and can be emotionally draining. And with your efforts concentrated on something other than running your business, your business may start struggling at the exact time you are trying to sell it. That’s never good! A broker or investment banker will handle a huge portion of the negotiations and will probably get you better terms than you would on your own. In addition, they will become a much-needed buffer when the negotiations get intense.
Mistake #2: Starting the Process with Misguided Expectations
First-time business sellers often have unrealistic expectations. For example, many sellers believe their companies are worth more than actual market value and are then disappointed when their (over-priced) business does not sell quickly or at all.
During the preparation stage, it is important to right size your expectations. By evaluating the recent sales of similar businesses in your area, you can gain more realistic insights about average sale prices and how long it typically takes to sell a business like yours. Through consultations with your business broker and other experts, you can also identify the types of concessions sellers or buyers have made to close deals.
Mistake #3: Getting the Timing Wrong
Your personal feelings aside, it may or may not be the right time to sell your business. While a strengthening economy is certainly helpful, it doesn’t necessarily mean that the business succession market is ripe for every business in every industry. Even if the market looks good, it is possible that your position could be stronger six months or a year down the road.
Determining the best possible time to sell your business is tricky. But by consulting with your advisory team, putting yourself in a buyer’s shoes, and identifying the outcomes you want to achieve early in the process, you can uncover insights that impact the timing of your sale. In some cases, it may be better to wait until you have improved the company’s financials or until the market is more likely to deliver your desired sale outcomes.
Mistake #4: Incorrectly Valuing the Company
Valuation is a tricky process. Although there is a tendency for sellers to inflate the value of their companies, it can be equally dangerous to undervalue your business. If the asking price is too low, you may leave money on the table or, worse yet, buyers may assume there is a problem and move on to other opportunities.
While your own insight and quick, easy-to-use valuation tools are a good starting point, ultimately, you need the objective valuation provided by a qualified third party. Commercial appraisers and business brokers who offer valuation services understand the marketplace and have the expertise to provide an accurate measure of your company’s real value. Considering that your business is likely your most valuable asset, it pays to get the price right.
Demonstrate your value. Avoid the temptation to set a price for your business too early. Focus on what the buyer values most about your business, whether it is a new product or service, geographic expansion or human capital. This approach puts you in a better position to document value and negotiate a higher price. To get the best offer do not focus on one acquirer; allow your investment banker to increase competition and bring in multiple offers.
Buyers focused on past performance may undervalue your business. Help them see the future value of your business with analysis and documentation of your earning potential. Align this documentation with the strategic goals your buyer has in mind.
Mistake #5: Not Spending Enough Time on Preparation
Many business sellers are surprised by the amount of time and effort it takes to properly prepare a business for the marketplace. From determining value and setting the right asking price to compiling historical financials and other documents, a multitude of tasks need to be performed before you list your business.
At a minimum, you should begin the preparation process six months to a year before you intend to sell the business and, ideally, preparation starts several years in advance. In addition to allowing you to complete all the necessary preparations, longer lead time gives you time to increase earnings or improve your company’s competitive position, making your business more appealing to qualified buyers.
There are no guarantees in selling a business but business owners who approach exit planning systematically and methodically are more likely to maximize their business sale prices and sell on their own terms. To do it right, be sure to start preparing well in advance of actually listing your business for sale.
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