Becoming an Exitpreneur with Joe Valley

In our newest episode, we talk to Joe Valley, a Certified Mergers and Acquisitions Professional. After building, buying, and/or selling a 1⁄2 dozen of his own companies, Joe Valley helped build one of the leading online-focused M&A Advisory firms in the world.

After facilitating nearly 1⁄2 billion in exits, Joe has written the bestselling book “The EXITpreneur’s Playbook” to help online business owners get the maximum value and best deal structure when they seek an exit.

Tune in for Joe’s insights, and don’t forget to download three free chapters from his book, just for the Ecwid community:

• Chapter 11: Identify All Your Add-Backs
• Chapter 13: FBA Roll-ups, Yeah or Nay?
• Chapter 15: Structuring the Deal

Some key insights of the podcast include:

Getting the Basics Right to Build on Your Foundation

Set a specific goal for your exit time and value. Then reverse engineer a path to that goal. The more detail you bake into your vision, the clearer your path will be along the way.

Entrepreneurs get excited when they understand the actual value of their business. Getting the basics right starts with getting your books and accounting in order. If you’re just starting out, try a software tool like Quickbooks. Understanding a seller’s discretionary revenue is the key to understanding the actual value of your business.

The Peculiarities of Selling a Business

C-Corporations are harder to sell because they involve an asset sale, not a stock sale. Sales under one million dollars will typically be cash deals, with some cash set aside in escrow.

However, more than just assets will be involved in the contract. Post-sale, you’ll need to stick around and help with the transition.

For most business owners, the most money is made at the exit. You should probably operate under that assumption and worry less about extracting a paycheck to maximize your business value.

Becoming an Exitpreneur

Learning to look at your business as a short-term project can help you build something great. Shifting your mindset from being an entrepreneur to an Exitpreneur, can be exhilarating, but difficult for some people to accept that they won’t continue to grow alongside every business.

It’s important to clearly understand how the money you are pulling out of a company will impact the end value of the business’s sale. Business owners often dramatically undervalue their business and leave tons of money on the table.

What Revenue Levels Are Buyers Looking for Today?

The four things buyers look at while deciding on a deal are: Risk, Growth, Transferability, and Documentation.

High total discretionary earning is the goal. Two-year-old businesses with six-figure discretionary earnings are ideal. Sell on growth years.

Ensure everything is in order, both in the ease of transferability of assets and the documentation of everything. The actual value of the business can vary wildly, depending on understanding the right time, in your business’s lifecycle, for the sale.

But there’s nothing in the world like the feeling that comes with the large bank account deposit following the sale.