Built to Sell Radio

When Mark Carlson put Minnesota Mailing Solutions on the block, he got two offers for around $3 million, which represented about four times his pre tax profit – a respectable price for a postage meter reseller turning over $4.5 million in revenue. But Carlson wasn't satisfied, and in this week's episode you'll hear the one simple tactic he used to get the acquirer to boost their offer by 50%.

When the time comes, do you want to sell your business externally, or internally to your employees or family members? Once you decide, a little piece of you may always wonder how the other option would have played out. That's why the story of Barry Wood is such an interesting case study. Wood is a door guy, who started M&I Door Systems in 1995, sold M&I in 1998, and then started another – virtually identical – door business in 2003, only to sell it in 2013. Wood sold his first door business externally and his second internally, so his two exits allow us to see clearly the differences between these two types of sale with an as close to apples-to-apples comparison as possible. The pros and cons of selling externally rather than internally may surprise you.

Mike McCarron sold MSM Transportation to the Wheels Group for $18.6 million. After receiving the letter of intent (LOI) he signed it immediately. If McCarron had the opportunity to do it all again he'd handle this request differently. Listen now and find out why.

For most of its 17 years, Imaging Path was a successful IT services contractor that peaked at more than $16 million in sales. Imaging Path founder and CEO Corey Tansom kept a close eye on his business until, a few years prior to its sale, Tansom went through a divorce that caused him to spend a lot of time away from the office. Tansom was distracted, costs ballooned and margins shrank. Imaging Path started losing about $500,000 a year. The situation at Imaging Path got worse when Tansom's bank decided to pull its financing. Tansom decided his best option was to sell his business – but who would buy a money-losing company?

Carl Silbersky sold his facial recognition software company Polar Rose to Apple in 2010 for a reported $29 million. The negotiation was relatively smooth but Steve Jobs would not budge on one deal point. Learn how one of the savviest deal-makers of our time approached his strategic acquisition.

Katherine Hague, co-founded ShopLocket in 2011 and sold her business two years later to PCH, a billion dollar Irish company. Hague was a prodigious fundraiser in her two years from idea to exit. She sold 2% of her company to a friend before she had a product, another 10% to an incubator before selling an even bigger chunk in a million dollar funding round. In our interview, Hague describes some of the landmines to avoid when raising outside capital and why she still has one regret about the sale of ShopLocket to PCH: listen now.

Dennis Hart sold his advertising agency, Apex Media, for 7.1 times EBITDA. Selling for 7X sounds like a great exit but it disguises the complexity of the negotiations. Hart felt like he knew precisely how much EBITDA he generated until the buyer started questioning his math, adding back extra expenses, and driving down his EBITDA. Hart walked away from the negotiating table twice. Eventually both parties were able to agree on a set of "add backs," but this is a good reminder that, when it comes to selling your business, your EBITDA can be subjective.

How much would someone have to pay you to buy your business today? That's the question Kris Jones was asked when billionaire Michael Rubin approached him about selling. Jones' answer to Rubin's question may surprise you.

Back in 2011, Nathan Latka started Heyo, a social media company that helped businesses advertise on Facebook. By 2016, Heyo had raised $2.5 million in seed and venture capital financing and, by all accounts, it was a growing and successful business. Then Latka sent an unusual email that would ultimately garner him seven offers to buy his business – with the winning bid amounting to an incredible 11 times revenue. Listen to Latka describe the content of the email.

When John Bowen received a $37 million offer to buy his business, he thought it was too good to be true. As it turns out, it was. Bowen had received a non-binding letter of intent from a global bank, who made their bid with no actual intent to buy his business. Bowen came to believe their offer was a decoy designed to disguise their real objective: to understand Bowen's strategy so they could compete better with him. Bowen got wise to their strategy and ended up selling his business to another buyer, Assante Wealth Management, for $25 million. Bowen reveals his three strategies for evaluating the authenticity of an offer to buy your business during our interview.