5 Key Steps to Selling Your Business Successfully | Ep #166

In this episode of the Second Act Success Career Podcast, host Shannon Russell shares her personal experience of selling her first business, a successful franchise she ran for eight years. Whether you're a current business owner or aspiring entrepreneur, learning about the process of selling a business is crucial. 

Shannon walks listeners through the emotional and strategic sides of selling, offering five essential tips to make your business attractive to buyers and ensure a smooth transition. 

From getting your financials in order to setting a realistic valuation and having a strong transition plan, Shannon’s insights provide invaluable advice for entrepreneurs at any stage. If you’re thinking about starting, growing, or eventually selling your business, this episode is a must-listen!

Tune in to learn how to approach this complex process with confidence and set yourself up for your next venture with no regrets.

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Transcript

Second Act Success Career Podcast
Season 1 - 5 Key Steps to Selling Your Business Successfully | Ep #166
Episode - #166
Host: Shannon Russell
Transcription (*created by Descript and may not be perfectly accurate)

[00:00:00] Welcome back to the second act success career podcast. I am your host Shannon Russell. 

Today is a very personal topic for me. We are going to talk about selling your business. So if you are an entrepreneur or if you're an entrepreneur in the making, I want you to listen in because this is an aspect of being a business owner that I honestly wasn't aware of. 

It took me many years into my first business to realize that I should be thinking about selling. Just recently I sold my first business, my franchise business. And it was really a learning experience in so many ways that I thought this would be a great podcast episode to really let you in, to pull back the curtain and tell you how it is to build a business, to create this baby, and then turn around and sell it. Whether you're looking to transition into a new venture retire or simply move [00:01:00] on to your next big idea, selling a business is a complex process. 

Trust me. 

After eight years in business, I recently sold my first business, my franchise and I experienced firsthand. What really goes into this decision. And everything that happens afterwards. I love to share with you five key things to keep in mind when you decide it's time to sell. 

[00:01:26] Speaker: Are you ready to quit your nine to five job and start a business of your own? Well, you're in the right place, my friend. Welcome to the second act success career podcast. I am your host, Shannon Russell. I am a former television producer turned business owner, career transition coach, and boy mom. My mission is to help you produce your best life.

This podcast will teach you how to get from where you are now to where you want to be and how to build a business that fits your life and lights you up. Let's get [00:02:00] started.

Before we jump in. I want to remind you that here at second act success, I am all about helping you craft your next chapter, whatever that may be. So whether that means starting a business, growing it, or in this case today, selling it. I want you to know that you are supported. . I have walked in your shoes or in many cases I have gone through these things so that I can come out on the other side and share with you so that you know what to look out for on your journey. 

All right. Let's dive right in. 

If you have been around following me on social media or here on the podcast for any amount of time, you most likely know that I began my career as a television producer. 

And when I had my family, when I had my two boys, I decided to leave television because the hours and the travel were a bit too much. 

And I was on the lookout for my second [00:03:00] act. What I ended up finding after a lot of trials and testing and mishaps and soul searching. I decided to start a business. 

I decided to take my producing skills and produce my best life. I looked into opening a business. When I searched around. For the businesses that I was thinking about, I narrowed my options down to running a stem education business that would teach children, science, technology, engineering, and math. And what I found was a franchise that had everything I was thinking about. Already bundled up into a working proven system, so I launched into buying into that franchise and opening my own franchise in my community. 

I did this in 2016. Throughout the years, I grew my business to being one of the top earning franchises out of all of the franchises in our [00:04:00] organization. It became a really successful business for me and was able to provide for my family while I was able to be a present mom and be home more for my kids. 

So it was a, win-win an amazing experience and taught me so much about business, about community, about marketing, about growing a team, just everything you can imagine. This experience, this opportunity gave me. 

Cut to a few years into that business. Where I started getting other women in my community, asking me for advice on how they could change careers. Like I had done. And so I started working with friends and even customers of mine on how they can make the shift from employee to entrepreneur or employee at a job that they just don't like to finding a job that really fulfills them. As I started doing this just as a friend, [00:05:00] I really realized that there was something missing. Out in the market, that there were a lot of women like me. Or moms like me in midlife that felt stuck. 

That felt like the career they chose at age 20. Just really didn't fit them. In their thirties, forties, fifties. So I started Second Act Success Career Coaching. And when I started that business, Everything grew. I started getting clients. I started growing programs and I was now running two successful businesses. I wanted to focus 1000% on coaching my clients and helping my clients achieve their goals. And so I decided to look for potential buyers for my franchise business. I did not know. What that would look like? 

I didn't know how long it would take. I didn't know if anyone would want to buy it. I spoke with the CEO of my organization. And [00:06:00] she said, what you want to do is always sell when the business is the hottest, when you are doing the best is when you want to try and sell. That idea, honestly, never occurred to me. I now advise that to my clients, of course, but for myself, I never thought about it because this franchise business, I started. Really was a part of me. It was a third child for me. It was something that. I knew and I loved. But now things were changing.

I had spent years serving children and families, and now I wanted to serve women. In the workplace in business. And so I did it. I started telling people in my circle that I was interested in finding a buyer for the business the business was booming. It was the right time. I started asking around. 

I eventually got a broker and the broker ended up finding me the perfect [00:07:00] buyers. I'm not going to sugar coat it, it took me a year and a half to sell the business. It was a lot to get together, to organize, figuring out all of the money side of things and how it would look to sell plus running two businesses at the same time and adding a layer of dealing with my franchise or to sell as well. 

A lot of hoops to jump through. And it ended up taking me a year and a half. I literally closed on the sale of my business only a few weeks ago in September, 2024. 

If you have ever sold a house. You know that it is not sold until everything is signed. So you can know that it's happening. You can get all those pieces moving. But until everything is signed and that money exchanges hands it's not final. It has been a very crazy past few months. of getting this together and making sure that we actually crossed that finish [00:08:00] line. And we did. I have sold that business. 

I'm in the process of training the new buyers. And it's an emotional, weird feeling to be honest, because now I can spend my days focused on my clients, focus on the programs that I offer I can spend my time now. Uh, building Second Act Success. To be what I wanted to be to reach a broader audience, to help more women in their career changes. 

I no longer have to switch tabs in my brain between one business and the other. And honestly, The past couple of years, it has been that it has been okay. I need to work on this. And I need to work on that. Honestly, I had an amazing team with my franchise business. I had a very large group of employees. 

I had a director who ran everything with me and was my right hand gal. So I [00:09:00] had the help. It was still always having to worry about this, that, and the other. yeah, It really came time where now I knew I needed to sell. I sold and now I can breathe that sigh of relief and really focus on the future for Second Act Success. 

So, Whether you are a business owner currently, whether you're thinking about transitioning from your corporate job into starting a business. honestly, I think these chips and just having this information in the back of your mind, Is something that you will need eventually, because you do want to take your business to a level where it is successful and attractive to potential buyers, because then you sell, you get that money and you can reinvest it into another business. For me selling my franchise business. Was part of a bigger plan., For me, it was a way to free up other opportunities that I'm passionate about in [00:10:00] my coaching business. 

I can deal more with my career and business coaching clients. And I can really help more people in this way. But keep in mind when you sell a business, it's emotional and it's definitely a process that requires preparation strategy. And making sure you have a clear head that you're clearly thinking about. What you're doing and what will happen on the other side of that closing dates? So, whether you've built your business from scratch or you bought a franchise, like I did. Selling it represents the closing of one chapter. And the beginning of a new one. 

Let's talk about five important things to consider, to make sure that you can go through the selling process as smoothly as possible. And that you can walk away feeling good about your decision, because that is the most important thing. 

No regrets. 

Tip number one. Get your financials in order. The first and most crucial [00:11:00] step is to ensure that all of your financials are clean, transparent, and easy to understand. So whether you have an accountant or you do your financials and your bookkeeping yourself, make sure that everything is clear. 

Everything is accounted for, and everything is up to date. Because buyers want to see a healthy well-documented financial history. If your books are messy, it's going to delay the sale and really turn potential buyers away.

For me, I worked with a bookkeeper. To make sure that my financials were accurate and I wanted to make sure that I understood them as much as my bookkeeper and accountant did. 'cause a lot of times when you outsource the money side of things to someone else, you don't pay as much attention. That was me for quite a while. But when I knew I was selling, I wanted to make sure that I could wrap my head around the numbers and be able to speak to them as much as my bookkeeper or my accountant could. This helped really speed up the process [00:12:00] and it gave me the confidence to talk to these potential buyers about our revenue, about our profit and loss about our expenses. 

I could make sure that my profit and loss statements, my balance sheets, my tax returns. We're all up to date and ready in a clear way to hand them over to them. These documents. Or something that your potential buyers will want to see. And you'll want to make sure that they're ready to go. 

Okay.

Tip number two. No, what your business is worth. You'll want to get a professional evaluation, to know what your business is truly worth. And this can vary depending on factors like your revenue, your profitability, the market conditions, and of course, any growth potential. That your buyers can take and move forward with once they own your business. You can't and I'm going to stress this. 

You cannot rely on your gut feeling. You want to get these experts involved? 

I believed that my business was worth so [00:13:00] much more. Than what the valuation showed. That is because it's emotional. That's because I knew how much time and effort and dedication and blood, sweat, and tears I put to growing that business and to making sure we were it's hop grossing business. , but keep in mind that all of that blood, sweat, and tears. Isn't accountable on paper. It really does come down to the numbers. When I decided to sell my franchise, I wanted someone on the outside to look at the numbers, look at the business and give me a clear and accurate valuation. I worked with an accountant who did this for a living. And he gave me a valuation and we talked about it. We went back and forth and we settled on. Yep. 

This is what the business is valued at. Then I decided to work with a business broker. Who looked at those numbers again, and then help me really decide on the best selling price. Based on what similar [00:14:00] businesses were being sold for in my industry. So you can have a valuation for the business. But then you can look at the market and see what other similar businesses are actually selling for. 

And that number may change a little bit here and there. By going with these professionals to figure out the price, to sell your business. You're helping to avoid any undervaluing of your business. And you're avoiding pricing it too high, which could scare off buyers. You want to set a realistic price point? another thing to keep in mind. Our fees. 

You might have a fee for your broker. You might have a fee for your franchisor for transferring your business to someone else. Whatever your circumstances are, know the fees. That you will have to pay out in the end. 

And you can work those fees into your purchase price.

Okay.

Tip number three. Have a transition plan in place. When selling a [00:15:00] business, most buyers want to know what the transition will look like. Are you willing to stay on for a few months to train the new owner? Do you have a solid team that will stay on. to help with the handover. What will that transition look like? So that there's no one being left in the dark and that everyone is clear on this transition plan. And you can ensure that all of your business stays intact for the new buyers. 

In my case, I am staying on for one month. To help make sure that the business is all transitioned over to the new buyers. Very seamlessly . I am helping to coordinate these conversations with our partners, with our clients, with our customers and with our team. 

The last thing you want is to spring the news that you sold your business and have your entire team walk out for whatever reason. So you want to Make sure that everyone feels comfortable. Everyone feels that their job is safe and that the new owners [00:16:00] feel comfortable with the business that you built and the plan for transition that you created.

This is added value to the sale because the buyer knows they will get that support. They need. You can decide to stay on for a few weeks, a few months, whatever you decide. Also, you can decide that if they need help, once your. Transition time period has expired that you are available as a consultant. 

If you want to be. And that you can charge them a fee to help them with whatever needs they might have down the road.

It's also important to gather. Information together for them. In my case, I sold a franchise, which means the franchisor will give a bigger picture training on how the business works. But for me as the day-to-day business owner, I can show them exactly what to do when this, that, or the other happens.

if there is anything you can do ahead of time, like get files [00:17:00] together, get a Google drive, ready with all the information they need, any of that kind of admin stuff that you can get together for them will help the transition process as well. for me, I actually did personalize emails to my staff, to our clients, to our partners, introducing the new buyers so that it was a nice, friendly, seamless transition. But whatever you can do to just help make that process smoother will be beneficial for you and for them. 

Mhm.

Tip number four, keep your business running smoothly during the sale, do not take your foot off the gas. My friend. It can be tempting to want to slow down when you know, you're selling, but this is the worst thing you can do, 

Like I said earlier, nothing is final until the signatures are on the contracts and money has exchanged hands. Buyers want to see a business that is thriving when they take over, not when that's on autopilot or in decline. Keep your business operations running strong, [00:18:00] pretend like this can fall through at any moment. And if you are going to continue to run the business, you need to continue to run the business. 

So keep doing so. Up until the very last day.

And then through the transition process, you will continue to help that business run until the end of your contracted. Transition time with the buyers. Keep the business looking attractive until the sale is finalized. I was doing this. So it was business as usual. 

I wanted to ensure that business was going to continue to run. Uh, whether the sale went through or whether it didn't.

Okay.



Last one, tip number five, prepare yourself emotionally. Selling a business is a very emotional roller coaster. You've poured your heart and soul into building this business. And now you're letting it go. So that can feel bittersweet. Take time to prepare yourself. Emotionally for the sale. [00:19:00] 

You want to make sure that you're clear on why you're selling. And what's next for you after the sale. , it's just like deciding on any second act career move. You want to go back to knowing your why? I knew why I was selling the business. I love the business. I love my team. 

I love the work that we did. But my heart was being drawn more to my clients. I knew that emotionally and mentally. I could no longer handle the pressure of two businesses. Raising two kids, having a podcast and writing a book all at the same time, I have too many things going on. And I knew that. Something had to give. And if I didn't choose to sell. Something was going to fall to the wayside. 

And I didn't want that. I wanted to sell on my own terms. Therefore I knew my why I was clear on it. And I prepared myself really for that year [00:20:00] and a half. Throughout my whole journey of trying to sell my business. I was preparing myself emotionally. I had to prepare my kids. 

They only know this business. I opened this business when my little one was one and a half years old. So my kids really grew up with this business. It means a lot to them. And I had to prepare them emotionally that mommy, wasn't going to run this business anymore. 

But then I was excited. To continue building my other business and they see that they're excited for my book to come out in a few months. They like that I have a podcast. They see me making a difference in other women's lives, through my programs at my coaching. And they see how happy I am. So they understood that this is just part of being an entrepreneur. 

I also had to prepare my team. I've worked with these people for eight years. And my manager who helps me run the business has become one of my best friends. [00:21:00] thinking about not. Working with her every day. Is emotional to me. And so we had to realize that we're still going to be great friends, even if we don't have to professionally work together every day. I also have become so close. With other franchise owners in my organization and we realized the same thing is that we're still going to be supporters of each other's businesses. 

We just won't be going through the exact same business every day. But, you know what? I know that business so well, so I'm still there to be a sounding board and to support them. 

My point being is that if you prepare yourself emotionally, 

if you make sure that you are clear on your, why. Then what's next for you is just going to be that much more exciting.

Keep in mind that by letting go of your business, you are handing it off to someone else. So it's not like you're closing the business altogether. In most circumstances, you are trusting that the right buyer [00:22:00] will take your business to the next level. And you can focus and you can focus on your next chapter. 

Okay there, you have it. 

Now we've covered the five key tips to selling a business. 

If you are going through this process, I would love to hear from you. DM me on Instagram. I'm @secondactsuccess. 

And if you're thinking about selling a business and you need a little support, I would love to be able to help you throughout this process. So definitely contact me and I would be happy to share everything I have learned so that you can go through and have a smooth transition selling your baby.

The relief and the pride in selling a business is incredible. You feel accomplished, you feel satisfied, you feel proud. And you feel ready for your next step? Even if you are thinking about this transition and you're not yet sure what you'll be doing next, do not worry. 

The great thing about it is that you will get this money from your business and you [00:23:00] can use that to help start your next business or start or fund your next venture. Just know that it's a process. And that emotionally is a process mentally. It's a process. There are so many. Moving pieces to selling a business that you really have to take it one step at a time and always go back to your why. 

Lastly, I have to say that this whole process. Has taught me so much about the importance of preparation, patience, and trusting the journey. And really knowing that I built something that someone else wanted, someone else wanted to take. What I grew, what I created from scratch. To continue growing. And this business is now going to change their lives. And that's really incredible and something I'm very, very proud of. And Of course with this chapter behind me, I'm excited for all of the new opportunities that lie ahead. 

I hope these tips and my [00:24:00] personal experience have helped you understand what goes into selling a business. If you are thinking about making that move, remember to stay focused on your financials, understand the value of your business and prepare yourself both practically and emotionally for what's to come. 

I want to thank you so much for tuning in to this episode of the second act success career podcast. 

If you found value in this episode, be sure to subscribe and leave us a review. I'd love to hear about your experiences in selling and preparing to sell your business. So reach out to me on social at second act success 

or through the website, second act success.co. Until next time, my friend make it a great day.

[00:25:00]