Terry is a Certified Valuation Analyst and cofounder of Innovative Business Advisors. He works with his team to guide current business owners looking to sell their enterprises, as well as prospective buyers. His new book, You Don’t Know What You Don’t Know, is an in-depth examination of the process of buying, growing, and eventually selling a business.
You Don’t Know What You Don’t Know – Grab a copy of Terry’s book!
Terry’s LinkedIn – Connect with Terry & Innovative Business Advisors on LinkedIn!
Terry’s Website – Learn more about Terry’s business and what he has going on
Value Builder System Questionnaire – Measure your company’s ability to obtain bank financing with Terry’s online tools.
3 Value Bombs
1) The biggest driver of value in a company is its cash flow.
2) You need to develop and have a life plan after the sale.
3) You don’t know what you don’t know – you have to ask questions!
**Click the time stamp to jump directly to that point in the episode.
Today’s Audio MASTERCLASS: Strategically positioning your company for sale in 7 steps with Terry Lammers
[0:55] – Terry shares something about himself that most people don’t know.
- He served for 22 years as a volunteer firefighter; he retired but is currently the president of their district.
[1:42] – Step 1: Identify the critical factors that determine a company’s worth. How do we do that?
- The biggest driver of value in a company is its cash flow.
- During evaluation, first thing is to get 3-5 years worth of financial statements and/or tax returns to determine the income trend. To get the true worth of the company they add back the normal expenses.
- Check the trend line and identify the glider path.
[4:33] – What are some best practices that companies can implement today to improve their overall worth?
- Use Accrual Accounting – it will give you accounts receivable and payables.
- Have a readable Financial Statement.
[6:08] – Step 2: Find the right attorney to handle the deal and the right bank for your specific needs.
- Make sure to get an attorney who is going to work with you.
- Choose a bank that will meet your needs.
[8:55] – Step 3: How does a company know when they need a financial adviser, and how do they choose the right one?
- If you have investable assets greater than a million dollars, then you will need a registered investment agent.
- The right registered investment agent for you is one who will grow your portfolio – not the ones who sell you products.
[10:50] – Step 4: You need to be aware of non-financial things that can affect the value of your company.
[13:36] – Step 5: Focus on profit and cash flow.
- Watch your growth profit instead of your sales and net income.
[16:23] – Step 6: How does one develop a life plan for after the sale?
- Terry talks about the last chapter of his book, “Don’t be like the dog that caught the car.”
- You need to develop and have a life plan after the sale.
[18:04] – Step 7: Ask questions, because you don’t know what you don’t know.
- In his book, Terry talks about the things he did right and things that he should have done differently.
- You have to ask the right questions whether you are selling or buying a company – and ask somebody who has done transactions before.
- Seek out the right advice.
[20:39] – Key takeaways for Fire Nation from Terry and his call to action!
- You don’t know what you don’t know – you have to ask questions. Everybody’s situation is different.
[22:44] – Connect with Terry!
- You Don’t Know What You Don’t Know – Grab a copy of Terry’s book!
- Terry’s LinkedIn – Connect with Terry & Innovative Business Advisors on LinkedIn!
- Terry’s Website – Learn more about Terry’s business and what he has going on
- Value Builder System Questionnaire – Measure your company’s ability to obtain bank financing with Terry’s online tools.
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