(Video Transcript - lightly edited for clarity)
I tell every single client, you are eventually going to get out of real estate, either voluntarily or in voluntarily. As you made a conscious decision to bring in a partner or sell your business, you become disabled or God forbid you should die.
You need to look at yourself as a chief executive officer. You're not a real estate agent. You're not a real estate team. You're the CEO. Most of my clients are CEOs of very top teams in their markets. I would say my average team probably sells a hundred and sixty million dollars a year.
They are big businesses almost in every city they operate in. And most of them are a top 10 CEO of all corporations in their marketplace. So you need to make a conscious decision to start asking yourself, when do I want to have the ability to get out of the business?
It doesn't mean you have to get out. If you say, I have a five year plan, seven year plan, whatever. Who is assisting you in developing your exit strategy, selling your business? And every single one of you watching the video today, you need to have that exit strategy in place.
If you say it's a five year plan, what do you want to do? You want to bring a partner in? You want to have somebody buy into your business? Usually how that is structured is you bring somebody in and it takes a good three years of you working with them.
However, you must have an ironclad contract with these people that's legally binding. This is so they can't come in and learn from you and walk away. You always want to make sure you get most of your money upfront.
The time to start thinking about selling your business is absolutely now. You need to make that decision today. The second thing is, once you make that decision, determine the current value of your business.
Most people don't know how to do a proper valuation. Let me give you an example. I had a client who was talking to me about selling his business. I ask him “So what's your business worth?” He goes, well, “I think it's worth $300,000."
I did the evaluation of the business, I'm running the numbers. It takes a long time to get this stuff done. I wound up getting him $1,000,000 for his business. Think about that.
He was willing to take seven hundred thousand dollars less simply because he was thinking as a real estate agent, not a CEO. He was just so tired and he was willing to take the first thing to get out. Don't let that mistake happen to you. Please find trusted advisers that you can count on that will help you put the process together.
When you want to sell, you keep it to yourself and only the parties involved. You don't tell anybody else because it can destroy your reputation and other people in the marketplace will use that against you. Shoot me an email at Bob@BobCorcoran.com if you’d like to explore what your team is worth and the best way to position it for maximum sales price.