I got slammed in the comments section of an article I wrote yesterday with the title “Do You Love Your Business As Much As Hugh Hefner does”. Last year Hefner told The New York Times that “If I sold it (Playboy Enterprises), my life would be over” and I used Hefner’s quote as a hook to write a piece about how much my business had become part of my identity until I almost lost both in 2004.

The comments mostly accused me of being an egomaniac. Here’s a little sampler:

“The writer must get paid by the number of clicks on the link. based on the pic, I thought it would be a good story about Hef and the challenges of the Playboy brand today. Instead, and very boring story about the writer himself. No wonder the key employee left.”

“A clue to this man’s ego is that he the company after himself. That he writes about himself as “news” demonstrates further this egoist does not deserve the title of journalist.”

When I write, I try to remember the suggestion I got from Entrepreneurs Organization (EO) about 10 years ago, which was to share experiences instead of providing advice. That’s why you’ll notice most of the articles below feature me as the protagonist. I understand why some people see that as narcissistic.

I still don’t like criticism but I have become used to it through the process of building a business to sell. First, my employees criticized my obsession with standardizing our offering and agreements. Later on, in the management presentations I conducted with potential acquirers, the MBAs poked holes in my business model. Eight of the toughest questions I got from prospective acquirers are featured in the first of the three new articles I have selected for you below:

Eight questions you’ll get when you’re ready to sell your business

~ published August 3, 2010 the Globe and Mail

One of the most intimidating parts of selling my last business was facing the barrage of questions during the various management presentations I did for companies interested in buying it. Each meeting had a different vibe, with each potential acquirer keen to dig into various aspects of the business.

Based on my experience in the hot seat, I’ve prepared a summary of some of the questions you’re likely to get when you’re ready to sell your business.  »more

Re-energize your business by preparing to sell

~ published August 4, 2010 the Globe and Mail

Recently a reader wrote the following comment about one of my articles:

“If you are running your business with one eye looking at selling it to someone else, how much passion and dedication are you putting into it?”

Respectfully, I have to disagree with what the reader is suggesting. »more

3 Reasons Why Your Name Isn’t a Good Company Name

~ published July 30, 2010 BNET

Be careful what you name your company, it could come back to haunt you later.

The first time I was threatened with a lawsuit, I had been in the business for only three months. I had hastily chosen the name “Brass Tacks Communications” for my market research business without doing my homework to see if somebody already had that name. Sure enough, there was another Brass Tacks Communications offering marketing services in my city. »more

(photo courtesy of Hugh Hefner Pictures)

My neighbour was weeks away from selling his executive recruitment business before the financial crisis hit in 2008. Two years on, he is working harder than ever and yearning for the day the economy improves and he can put it on the block again.

I have found there to be a big gap between being approached by someone about buying your business and actually selling it. For example, The Riverside Group is a big private equity firm that buys, re-models and sells smallish businesses. Last year Riverside looked at buying 4,228 different businesses, sent love letters to 1,315 but actually only closed on 15 deals.

In other words, they walked away from 99.6% of the companies they considered buying.

I’m not sure I’m going to share that stat or the two articles below (about Riverside) with my neighbour just yet…

Selling a company is like a tennis tournament

~ published July 27, 2010 the Globe and Mail

I have found a big difference between being approached by someone to buy your business and actually selling it.

Consider the Riverside Group’s experience in 2009. Riverside is a large, successful private equity outfit that specializes in buying companies, streamlining their operations, jamming them together with other complementary companies, and selling them for a profit. »more

An eight-point checklist for selling your business

~ published July 28, 2010 the Globe and Mail

In a previous column I talked about the gates you need to pass to sell your business to a big, successful private equity firm such as Riverside Group.

Now let’s examine the characteristics Riverside looks for in a business to buy. According to its 2009 annual report, it seeks out companies that meet the following standards: »more

Letters to shareholders can help sell a business

~published July 29, 2010 the Globe and Mail

I wrote recently about how using a public-company multiple as a benchmark for what your business might be worth can lead to disappointment.

However, I did find value in looking at public companies for another purpose: Reading the letters to shareholders in annual reports in my industry helped me see what was important to potential acquirers. »more

Selling Your Business? The 2 Most Important Numbers to Analyze

~ published July 22, 2010 BNET

I was on my way home when I got the call I had been expecting from the mergers and acquisitions firm I was using to sell my company. I pulled over — this conversation was going to require some focus.

“We have two offers we’d like to meet to discuss,” said my banker. »more

photo courtesy of stock.xchng/lusi

Have you ever noticed how some of your best business ideas hit you when you’re on vacation?

I’m not sure if being relaxed allows the mind to operate on a more creative plane, or if it is just being observant to the way people do things differently, but when I travel, my entrepreneurial mind kicks into over drive.

I’m writing to you today from Aix-en-Provence where my family and I have spent the month of July. France isn’t exactly a bastion of entrepreneurialism (something like half the population works for the state in some capacity) but even here, my mind was spinning on new business ideas.

Fresh business ideas

Take for example the way the French peddle sports equipment. On the outskirts of Aix they have a sports multiplex called “Oxylane Village”. The anchor is a massive (think Walmart superstore) Decathlon sports store that is a mash up of an REI, Dick’s and Disneyland for sports enthusiasts. They have 50 isles of sports gear for every possible activity. They have an entire aisle dedicated to swimming goggles for example.

New ways to sell

Decathlon not only has everything you’d need for even the most peculiar of sporting pursuits, they also make buying the regular gear an experience. They have testing centers for just about any sport you can imagine: you can try a new racket on a mini tennis court set up with a ball machine to lob you floaters; there’s a putting green; scaled down soccer pitch; bike paths and it goes on. Outside is an entire village of kids sports activities including trampolines, zip lines, go carts etc.

I’ve never seen anything like Decathlon in North America, which is why my mind started racing about the North American retail concepts that are ready to be disrupted by offering customers an entirely new experience.

Not only do long vacations offer plenty of new business ideas, they are also a great way to test how ready your business is to be sold (the more it can run without you, the easier it will be to fetch a premium price for your company). To that end, and in case you needed any additional justification for a nice long break this summer, here are a couple of my recent articles on how a sabbatical is an essential ingredient in creating a sellable business:

Test your company’s value by going on vacation

~published July 21, 2010 the Globe and Mail

A holiday can be a good way to test how well your business can run without you — in other words, how sellable it is.

I had been running my research business for five years when I decided I needed a proper vacation. Not one of those quasi-vacations when you take your mobile to Florida for a week and check in three times a day. I needed a real vacation. »more

Sabbatical by the boss leads to attempted takeover

~ published July 20, 2010 the Globe and Mail

Recently I read about a guy who flew around France in a solar-powered plane for 26 hours without using a drop of fuel. The planning and plotting apparently took years, with a team of engineers thinking through every aspect of getting a plane aloft on the power of the sun and then storing enough battery power to keep it airborne throughout the night. After years of planning on land, someone actually had to get inside the plane and take a test flight. »more

Three ways to find out what your business is worth

~ published July 22, 2010 the Globe and Mail

It’s natural to want to know what your business is worth, but it can be hard to find out.

Years ago I owned a marketing and design agency and I used to rely on the multiples the big advertising-agency holding companies got on the stock exchange. I’d assumed that, because Omnicom was trading at 22 times earnings, my little agency with $150,000 in profit was worth around $3 million. »more

Selling Your Business? The 2 Most Important Numbers to Analyze

~ published July 22, 2010 BNET

I was on my way home when I got the call I had been expecting from the mergers and acquisitions firm I was using to sell my company. I pulled over — this conversation was going to require some focus.

“We have two offers we’d like to meet to discuss,” said my banker.  »more

photo courtesy of Flickr/Meagan

My trusty old Dell laptop blew a motherboard fan in the middle of a presentation last week, so this weekend I finally broke down and bought a Mac. I rationalized my decision by reminding myself that because Apple makes both the software and hardware, it would be a more reliable machine. In truth, I was seduced by all of that slick marketing.

Similarly, a lot of romancing needs to be done if you want to sell your business, so I thought it might be fun to deconstruct my Apple experience for you in the context of building a sellable company.

Once I had selected my computer, the salesperson (er, “concierge”) told me about “Apple Care,” a glorified warranty that gives customers access to a special support phone number (among other things) for $100. Now, I’m the guy who never buys the insurance—not from Best Buy, not from Hertz—so it was a surprise to me that I was seduced into buying Apple Care.

It got me thinking about how to make the intangible seem real. First of all, Apple branded its warranty in a unique and memorable way. The concierge avoided using the generic word “warranty,” opting for the word “care” instead. As she explained the benefits of Apple Care, she handed me a shrink-wrapped white box with a plump red apple on the cover. On the back of the box was a bulleted list of the benefits being described by the concierge.

I’m not sure there was anything in that little box. Clearly, Steve Jobs was not poking his head out between the seams ready to answer my every technical query, but somehow the box in my hand made Apple Care feel more substantial. In short, it felt like a product, not a service.

Making the squishy seem real is a big part of selling a business too. You need to make your:

• sales pipeline look real even though you may have no idea what will close
• budget projections look solid even though they may not be much more than an educated guess
• employees look like highly qualified experts even though some may be best characterized as generalists
• product or service seem tangible and scalable even though in truth it may be a malleable offering that you customize for customers at every turn

Running a business can be messy. What have you done to make your business look more concrete?

P.S. I thought you might enjoy a couple of my recent articles below….

Do you need a brain transplant?

~ published April 13, 2010, The Globe and Mail

Last weekend my wife and I were browsing the shelves of our local Rogers Video and couldn’t find anything to watch. We have seen The Blind Side , and I have no interest in watching the Michael Jackson movie. As we scanned the rest of the titles, nothing jumped out at us.

Fortunately, Toronto’s Beach neighbourhood is home to an independent video store run by a husband and wife team who offer an alternative experience to that of the traditional video store chain. After walking into their cluttered store, instead of scanning the new-release wall, the initiated head straight to the owners and ask for a recommendation. »more

Six reasons to stop charging by the hour

~ published April 14, 2010, The Globe and Mail

I received a bill from my lawyer and he itemized his time spent on my file last month. He spent four-tenths of an hour on an e-mail to a colleague and one-tenth of an hour leaving me a voice mail.

I have found billing by the hour to be a liability when trying to build a sellable business. Years ago I owned a small design studio that charged by the hour. We had $750,000 in revenue, of which more than 20 per cent was flowing to the bottom line, yet the business was worthless because we were simply four people hawking hours. »more

Lessons learned from a lame attempt

~published April 15, 2010, The Globe and Mail

We were having lunch at Bravi, an upscale Italian restaurant in downtown Toronto. Across the table was the head of corporate development for a large advertising agency holding company. Fifteen years my senior, he was perfectly turned out with a crisp shirt underneath a tailored suit. He had flown in from Montreal to discuss “a possible partnership.”

Once the lunch plates were cleared, he got down to the real purpose of his trip. “Have you ever considered selling your business?” »more

Make Your Service Business As Easy to Sell as a Bottle of Tide

~ published About.com

In the 1990s, he owned a graphic design studio and was approached by someone who wanted to buy his business. Excited, he met with the suitor only to find out he expected to buy the studio for nothing down with a promise of future payments if Warrillow hit targets in the future as a division of his company. Incredulous, Warrillow asked the buyer to justify his valuation methodology. He explained that service businesses are difficult to sell because the assets are the people and if the people leave, there is no more company.

The meeting inspired Warrillow to transform his service business into one that looked more like a product business. He reasoned that, to be valuable, his business needed to seem tangible to outsiders and not so reliant on people. Procter & Gamble is the granddaddy of product marketing so he picked up a bottle of Tide and followed their formula. Here are the five steps he recommends you follow if you want to make your service-related business almost as easy to sell as a bottle of detergent.  » more

2GEZ4UGFC3PQ