Built to Sell Radio

Ep 474 2024 Year-End Special: The Insider’s Guide to Maximizing Your Exit

25 snips
Dec 27, 2024
As entrepreneurs prepare for 2025, they delve into key strategies to maximize business value before an exit. The shift to subscription models is emphasized for creating stable revenue. Negotiating the sale becomes critical, with tips on avoiding retrading and leveraging advisors. Entrepreneurs are encouraged to view exits as opportunities for ongoing wealth, especially through private equity. The complexity of selling service-oriented businesses is also explored, alongside the importance of understanding financial structures to ensure smooth transitions.
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ANECDOTE

Recurring Revenue Success

  • John Rood built Next Step, a test prep business, to nearly $10 million in revenue.
  • By shifting to a subscription model, he increased its value and secured a premium exit to private equity.
ADVICE

Subscription Model Design

  • Identify your ideal customer segment before designing a subscription model.
  • Optimize the subscription for their specific needs and problems to increase its appeal.
ADVICE

Defend Against Retrading

  • Understand your Best Alternative to a Negotiated Agreement (BATNA) before and during negotiations.
  • Recognize and name retrading tactics to neutralize their effect and protect your interests.
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