The Business of Selling Businesses: Why 80% of Companies Don’t Sell
with Michelle Seiler Tucker
Business is a world filled with trading and selling and buying. Products are bought and sold, adjusted to fit new markets, and developed with new technology. But there is another thing that is often overlooked when entrepreneurs start businesses, and that’s the fact you need to build up your company to sell the business itself.
Michelle Seiler Tucker, founder, and CEO of Seiler Tucker joins this episode of Making Bank. With a passion for entrepreneurship, Michelle began in franchising and has now become the world expert on mergers and acquisitions. Helping over 500 businesses grow and sell for a high price. She quickly learned that there are ways that you can make sure that when you sell your business, you can exit rich.
Learn how Michelle got into selling businesses, along with her how she found her reigning place in the business world. Plus, learn why 80% of companies don’t sell – and what you can do to ensure that your business sells.
Getting into Selling Businesses
Michelle was always interested in entrepreneurship from a young age. “I’ve always owned different types of businesses at any given time. I own five to 10 different businesses that I’m building to sell. And I’ve always just been like a kid in a candy store. I’ve always been super excited and interested to find out how somebody grew up a multimillion-dollar company from the kitchen table, the garage, or you know, we’re selling a company right now for 70 million dollars and the owner has an eighth-grade education.”
The idea of taking a business, building it up, watching it grow, and then sell it while it’s at its peak excites Michelle, so that’s what she set out to do. Before really getting into selling companies, she got into a franchise, sales consulting, and franchise development. However, her passion is not always as easy as she might make it seem. In the beginning, she very quickly learned that 80% of businesses won’t sell, at least, according to Steve Forbes.
80% is a huge number of businesses that won’t sell…but the problem wasn’t in the numbers. To Michelle, she wanted to learn WHY they weren’t selling and what she could do to fix that problem.
By owning her own business, she got hands-on experience to fix businesses and learned how to build them up so that they were sellable. “I put them on an infrastructure called the six-piece and I talk about an exit rich. And then I helped them on a build-to-sell program…we specialize in buying, selling, fixing, growing businesses.”
Not only does she buy the businesses and flip them, but she also partners with business owners, invests her money, expertise, resources, and time to help companies and businesses go through her journey.
Why Don’t 80% of Businesses Sell
80% of businesses never sell, so let’s dig into the WHY. Michelle says it’s because it’s not often thought about. “So, the number one reason is a business owner never thinks about selling until a catastrophic event has occurred. Most businesses don’t plan their exit.”
Most of the time, people think of exiting when they’re diagnosed with an illness, going through a divorce, or something else that is causing them stress from their personal life. This limits the way that the business could sell because there are no processes in place for it to be transitioned – it’s not a business, but rather a glorified job. And when you’ve just got a glorified job, there is nothing to sell.
“So, most business owners have created a glorified job in which they go to work every day versus a business that works for them,” Michelle says. And when those business owners try to sell the business, it’s typically when the business is going downwards. The best time to sell your company is when it’s going up and it’s in its prime.”
When creating a business, the important part that some forget is they don’t create a business or grow a business that buyers want to buy. A lot of the time, people don’t separate being the owner of a business and the business itself.
For people to want to buy a business, Michelle says that people look for a sustainable business that can be scaled towards change and success. That way, when you’re ready to sell the company, it’s an actual asset that can be sold.
Another important thing when creating a business that could be sellable is by putting the right people in the right positions. If the company is successful because of the owner, and the owner leaves, then the success is going to leave. Entrepreneurs need to focus on their strengths and hire their weaknesses.
Even if you build your company up with no intentions of selling it, there are ways that you can make sure that you’re getting all the money and value out of it that you can. You’ll never know what life will throw at you, either, so it’s always good to have that exit plan.