So its finally done! Biz Sold!

[willymo]

Congrats!!!!! Well done indeed!!!! :eusa_clap: :eusa_clap: :eusa_clap:

 

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[bert]

Congrats! I read about you selling your business on LP many months ago -- I'm glad it's finally done!

 

[NoMoneyDown]

Congratulations, MJ!!!

This thread should go into the "classics" category (if one exists).

 

[AroundTheWorld]

First of all, MJ - Congrats. I am so happy for you. What an amazing accomplishment - and I am also grateful to you for sharing your lessons. What a great way to give back!

#2) When you ignore your business, especially a technology business, (no matter how automated) its growth will stall and reverse. If you ignore something long enough, it will disappear. During my semi-retirement and zeal to sell for these 3 years, my business lost MILLIONS in valuation. Selling at the top wasn't as easy as "placing a stock order" or "putting the property in the MLS" .. selling a business is long process that takes months, sometimes years. My business is rather simple and it took 5 1/2 months. A complicated business can take a year or more.

In hindsight, ignoring your business is this diligence time frame really is a big risk.

This one hits home.... and it seems to be a common mistake. I know I did this - not only during the due diligence period - but in the year or two prior to selling my business.

I had a dream of "passive business income" and I made it so - but I went too far - going 99% passive and hands off. My business did suffer.

A lot of this was due to my growing dislike for my business. It was also due to my "other" life... family, REI. But, it was a mistake. I have come to believe that "business income" may be less labor intensive than having a job or being self-employed, but it is not in the "passive" income category. The business needs the passion, vision, drive, and dedication that only the founder can give.

In hindsight, if I could have done something differently, I would have either:

• sold sooner (before I went completely hands off)
• or stayed connected enough to put out the little fires, pay attention to growth, stay more connected with my employees.

But then - in hindsight - maybe I would not change a thing. The lessons I learned are invaluable to me and will certainly help me in my future ventures.

 

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[FT1]

Congrats, MJ!! :eusa_clap:

 

[michael515]

:banana:

Nice work on the sale. Even more so, nice work on the growth. Not sure if I missed the final sale price but being in that range you mentioned and buying the biz for $250K is solid.

Thanks for your insights...

 

[cantwait2]

Great post MJ, thanks for breaking it down...I learnt a few things from that post, much appreciated

I know when the last sale fell over after a long due dilegence that it was a real bastard, glad to see you were able to come back with a sale...

 

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[Peter2]

Congratulations on the sale MJ!!!!! :banana::fastlane::cheers:

I know how long you have tried to sell your business and how many times it fell through, so I know you must be very happy now.

 

[MJ DeMarco]

Congratulations, how long does the confidentiality agreement hold for?

I don't recall the term ... off hand I think it is 1 year or 3 years ... I might be confusing it with the non-compete. I have to look to confirm which when I get back home.

Good info people; is anyone able to answer my question regarding hiring management though?

Management was an option and I actually tried it by hiring my sister as the General Manager. The experiment failed miserably. What I learned was, even with managers, I still was mentally tied to the business. I was trying to cut free of the business, the industry, and the employees. Hiring (and training) a GM did NONE of that.

Also for those of you who still check into this thread, my primary revenue model was lead generation so its a niche I'm well versed on-- actually, I am one of the lead-gen pioneers since I started doing it in 1998 when "lead gen" was unheard of.

 

[Nate]

So MJ does that mean that you still think lead generation is a viable option? Any particular fields? I have always been curious about this... as I stated in another thread.

 

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[MJ DeMarco]

So MJ does that mean that you still think lead generation is a viable option? Any particular fields? I have always been curious about this... as I stated in another thread.

Absolutely ... really depends on the industry however. Expectations across the internet change rapidly among users.

 

[phlgirl]

I left the country, for vacation, the day you posted this and almost missed it entirely!

What an AMAZING feeling that must have been for you!! Fabulous news!! Woohoo!!! Thanks so much for sharing your experience. I do not know you but get the sense that you are extremely hardworking (or at the very least, smart-working). Great to hear that all of your work paid off. You should be very proud.

Bravo!!

 

[zack]

Many Congratulations!

So it must be time for a little reward to yourself - something with a W16 motor perhaps?? !

 

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[MJ DeMarco]

Many Congratulations!

So it must be time for a little reward to yourself - something with a W16 motor perhaps?? !

I really need a vacation but still have transition duties with the new owners. I'm also battling some potential, unexpected life-threating health problems as well which has also diverted my focus/time. Such is a great validation that there are no guarantees we all will live to 65 years old to enjoy a "safe, secure, retirement".

 

[Yankees338]

I really need a vacation but still have transition duties with the new owners. I'm also battling some potential, unexpected life-threating health problems as well which has also diverted my focus/time. Such is a great validation that there are no guarantees we all will live to 65 years old to enjoy a "safe, secure, retirement".

Very sorry to hear this. I sincerely hope all goes well and you end up in good health.

 

[JesseO]

MJ, sorry to hear about your health issues. The wife and I will keep you in our prayers. Do you have a get well soon smiley? :nonod:

 

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[royemunson]

MJ, that is wonderful. I have learned a ton from you over the past couple of years. Since lead generation is your specialty (my other guess for business avanues was webhosting since you started back in 98) did you see the article in business 2.0 about Mark Vurnum?

What did you think of his strategies?

As you said depending on the industry, lead generation will vary. I know from working with folks like CPA's, lawyers, etc... this is their weakness many times.

Joe:cheers:

 

[Sid23]

Could someone explain lead generation in more detail? What exactly is it?

 

[MJ DeMarco]

Could someone explain lead generation in more detail? What exactly is it?

HYPOTHETICAL EXAMPLE

I'm looking for an accountant.

I find a website (MyAccountant.com) that provides a one-stop source for accountants -- it does lead-gen for accountants.

I complete a form of chosen CPA's in my area, say 5, that have the specialization that I desire.

The form is sent to the CPA's and the website owner charges them $3 for the lead. $3 X 5 CPAs = $15 revenue.

The CPA's then follow-up to the lead, either by email or by a web-based interface.

 

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[royemunson]

If you've ever been in sales or business you know one of your lifebloods
is customers.

Lead generation is the technique of finding qualified prospects to turn into customers.

There are many ways to generate leads and many ways that it is done online and offline.

Most businesses spend a ton of money on ads, websites, marketing and hope that something sticks.

Smart entrepreneurs have been able to put a system together to target leads and sell them one way shape or form to these businesses or sales people.

A great book that discusses this type of poor targeting is "Your Marketing Sucks"

Many businesses are very weak in this section of the B-I triangle per Robert Kiyosaki's books. Either that or they are scared to death to find leads.

I did a tax return for a guy who simply put a system in place for a fellow CPA to generate leads (using online leads and offline techniques) and the CPA was so busy within 6 months that they let him go. He did such a good job they let him go.

Businesses and sales people will always need leads, it is how you deliver it to them that will be the difference (from what I'm understanding from readings and MJ).

Joe

 

[WheelsRCool]

Good luck PHX in your health problems. Prayers out for you!

 

[WheelsRCool]

Management was an option and I actually tried it by hiring my sister as the General Manager. The experiment failed miserably. What I learned was, even with managers, I still was mentally tied to the business. I was trying to cut free of the business, the industry, and the employees. Hiring (and training) a GM did NONE of that.

Also for those of you who still check into this thread, my primary revenue model was lead generation so its a niche I'm well versed on-- actually, I am one of the lead-gen pioneers since I started doing it in 1998 when "lead gen" was unheard of.

So do you mean hired management failed because your sister was a bad manager, or just you were too tied to the business so much that it was impossible to train a manager to run it properly...?

For example, there is a franchise I know of that has a CEO who is running it right now. He is not the founder though. He transferred to it after helping grow a previous franchise. Which in theory means the founder of the franchise wouldn't need to run it per se, I'd imagine they would have to meet with the CEO a few times a week to keep abreast of the business...?

For example, the Google guys don't directly run Google.

Would this mean that if you build a business that you intend to turn over to a manager someday, you should try to specifically design it to be managed by other people...?

Thanks,
---Wheels---

 

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[Nate]

Ok... a couple more specific questions about lead generation... I have liked the idea for a while... before I realized others were doing it, bummer So naive.

I know people don't like to give away their exact businesses, but my thoughts are:

• Hard to get good nationwide positioning on Google. Targeting your area might be a good idea. You can use more targeted key words plus other forms of advertising like classifieds and mailers or something.
• Professional jobs seem the best way to go. CPA's, ambulance chasing lawyers (or other types, but I think this would be a good route), and one I was really thinking about, Dr.'s for Lasik eye surgery. (They offered me $50 to refer a friend when I did mine).
• How much should a person charge/does he deserve for a lead?
• Do you/can you do some sort of bidding service with those professionals in your area?
• Are there other routes that I am missing other than these professionals?

Any thoughts on all this?

 

[Diane Kennedy]

MJ

I am so sorry to read of your health challenges. There are some great medical specialists in the Phoenix area, so I'm hopeful you can find good treatment here. I've worked (professionally) with a lot of the top docs in the area, drop me a PM if there is anything I can do to connect you with someone.

Big thing is less stress. I can only imagine how stressful the uncertainty of the sale of your business was and now that it's done, there is still the transition period plus even a weird kind of grieving that you can go through. All of that is stressful as well. Just cut yourself a break and do only what you can and what's healthy for you.

You're in our prayers.

 

[royemunson]

MJ sorry to hear. Just read that part.

Hope everything turns out ok.

Joe

 

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[FT1]

I really need a vacation but still have transition duties with the new owners. I'm also battling some potential, unexpected life-threating health problems as well which has also diverted my focus/time. Such is a great validation that there are no guarantees we all will live to 65 years old to enjoy a "safe, secure, retirement".

Bro, sorry to hear about your health problems. I just said a prayer for you, and I hope you get better soon. A couple of years ago I had a scare with my kidneys, but thank God things have gotten better and hopefully I won't have to deal with that again. I wish you good health.

 

[hakrjak]

So is the business with more revenue worth more, because your buyer will assume it's not being managed at an optimal level, and they can do better and produce more profit or what?

- Hakrjak

 

[Nate]

In regards to lead generation in your local area: What do you people pay for a good lead? RE agents, people looking to loan money, CPA's, lawyers, etc. Does anybody know? And what kind of information are they wanting exactly?

 

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[australianinvestor]

Great post. I'm stuck in one business at the moment I'm trying to divest. Not enjoyable. I'm not a long-term business operator. I am not enjoying being stuck, and like your story, the sales process is long and painful.

Daniel.

 

[MJ DeMarco]

******* UPDATE

Well folks almost 5 months have past since I've sold my business and here's an update:

I am still heavily involved with the company (unfortunately) as the new owners have experience running companies, but not internet ones. This has kept me busy on the consulting and administration end, much more than I'd like to partake.

The new owners are revamping the websites and the process is long overdue as the sites need serious upgrades. The last time I did a version change was mid 2006 and as you know, the internet changes rapidly and websites must evolve with it. Since I've exited, the site has not evolved so their core task is to *update* it into 2008 and beyond.

Their first mistake: Outsourcing development to India which resulted in 4 months of lost time and thousands of dollars wasted. They experienced the same horror show I did with foreign developers -- communication breakdowns and lack of attention to detail.

Now, they've hired *real* Bay Area developers who know how to get shit done. They've also hired a CEO supposedly from the Bay Area who comes from one of the big travel websites.

Hopefully an infusion of Silicon Valley talent will get these guys moving and in the right direction cuz as of now, nothing has been moving right.