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Authentic Business Relationships Authentic Deal-Making Authentic Leadership Deal-Driven Growth

Coaches, Deal-Making, and Buyouts

Remy Blumenfeld is one of the world’s leading business coaches and advisors. He’s contributed more than 50 articles to Forbes. Remy was also listed by an independent newspaper as one of the Top 20 Most Influential LGBTQ People in the United Kingdom. He’s been featured in Forbes, Inc., The New York Times, and more!

Listen to our full interview here.

Getting His Start

Remy shares that, as a kid, he knew he wanted to be in the communication business. He had a little cassette recorder, and he would go around interviewing his friends. (He even found the old tapes from it recently!) His first real job was actually as a reporter for The Wall Street Journal television show in New York City. He didn’t stick with it for his full career, but it was an enjoyable start!

His first deal-making experience was at a school fundraiser. There were all sorts of little booths, and people were selling things to raise money for the school. Remy spent 5 pounds and purchased a set of prints that had been connected to a puppet show theatre. He then resold them for a few hundred! Ebay wasn’t in existence yet, but he was still flipping goods.

Remy and I also discussed the difference between looking 4 years into the future versus a hundred or more years into the future — you can listen in to hear about that!

Later, Remy transitioned into what he’s known for now: coaching and advising. While running multiple businesses, he had found that he was naturally fulfilling a sort of coaching relationship with his employees. (The only difference, he joked, was that he had no coaching training and they hadn’t actually hired him for his input!) 

Now, however, Remy coaches leaders, primarily in the creation sectors. He finds they are usually looking for a combination of coaching and business advice. As a result, he provides a hybrid model based on their needs. 

Early Deal-Making Experiences

Some of Remy’s largest deals include the businesses he’s sold. He started his first production company out of his bedroom in Brixton because he was out of a job. Remy decided he wanted to sell ideas to broadcasters. However, he realized that he couldn’t get companies to invest money into him as an individual person. As a result, he rebranded as a company and kept on trying. Looking back, he notes he was doing many things he now advises his clients to do. At the time, though, he was doing it by accident. In essence, he was making programs about where he lived and what he knew best. At the time, Remy was living in a rough area as a young, gay Jewish man. The shows he was making were often about the edges of society. (Those edges have since become the middle in many ways).

The production company that started in his bedroom made the first Black music show on Terrestrial TV in the UK, the first Asian pop culture show on the BBC, the first gay dating show, and more. He notes they did quite well by doing what they knew best. They understood it, they loved it, and they did it the best.

That lesson holds true in any sort of business and sales endeavor: you’ll do best by doing what you know best. It truly helps to be an expert in whatever you’re doing, as the buyer realizes that you are truly the best choice for them.

Years later, Remy sold his bedroom-started company for a high-multiple figure to a larger production company. Later, they became the company that produced Big Brother!

Leaning Into the End Game

Remy notes that, at a certain point, he understood that the production company had a saleable value that he hadn’t initially recognized. When he had started it, there wasn’t really a true market in the field. 

About 6-7 years into running things, however, independent production companies became something that investors were interested in. Big companies started buying up smaller companies, and he realized he was ready to sell. This required facing many realities about the business that their team had never really thought about before. For instance, Remy and his team realized that if you don’t have processes in place, big companies aren’t interested in buying you. Strangely run companies with weird or lacking systems get overlooked in buyout opportunities. Remy suggests running your small company as if it’s a big company in terms of utilizing systems, procedures, and watching the bottom line. (Watch your growth line!)

Now, Remy always advises people to imagine, from day one, that they are going to sell. He notes that you should be attempting to create a story with numbers — a story of growth, consistency, and profitability.

Remy now works with founders to implement checklists early on so they can create something others would actually want to buy from the beginning. (Rather than trying to “dress the bride on the way to the altar”!)

I noted that it’s possible to get deals done with a last minute scramble, but it’s surely not ideal. Preparing in advance is the best!

The Psychology of Buying a Company

Beyond the numbers, Remy thinks psychology is the most important aspect of the sale of a business. (In fact, he notes that ego tends to get in the way of the best and truest job quite often!)

In the creative sector, Remy notes that people often want to show they’ve done the best possible job tapping into every possible revenue stream and protecting their rights. You won’t feel very proud of yourself if you’ve just “forgotten” to access a revenue stream or market. There is a level of pride involved that can make owners want to emphasize that they’ve done everything.

However, a buyer wants to feel there is room for growth and improvement. If everything has been done that can be done, and growth can’t occur, it will be less attractive to them. A buyer wants to believe they can run the company better than you, or at least that there is room for them to do something bigger and better!

Remy does note, however, that sometimes in show business people forget the business and run the show! In a business deal, it’s key to be able to show that the business elements have been well handled so they can be moved through.

(Listen in to learn more about Remy’s thoughts on how the buyers will be approaching your business just like a home they recently purchased; there will be changes!)

The Power of Coaches & Coaching

I noted that I’ve worked with coaches myself, and asked Remy to share a bit more about the power of coaching. 

Remy noted that one of the things he finds to be most powerful is helping people commit to their own goals and standards, independent of anybody else. It’s key to be able to hold these apart from your partner, parents, clients, or anyone else in your life. As a coach, Remy also finds it useful that he’s not involved in his client’s lives or goals in a personal way. He’s able to provide feedback and accountability that is received differently than that of a friend or colleague would be.

I see that as the deal clients and coaches make between one another, in terms of how they will hold one another accountable and show up.

Listen to our full interview here.

Corey Kupfer is an expert strategist, negotiator and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author and professional speaker who is passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

If you want to find out how deal-ready you are, take the Deal-Ready Assessment today!

 

Categories
Authentic Deal-Making Authentic Negotiating Deal-Driven Growth

Your Primal Brain & Deal-Making

Tim Ash is an international keynote speaker on evolutionary psychology and digital marketing. He’s also a thought leader, marketing trainer, and founder of strategic conversion rate optimization agency SiteTuners. Tim has written multiple books, and is the bestselling author of Landing Page Optimization: The Definitive Guide to Testing and Tuning for Conversions. As an industry leader he’s created over a billion dollars in value for massive brands like Google, Expedia, Nestle, Semantic, Costco, and more. He’s the founder and former chair of the worldwide Digital Growth Unleashed conference series. His work has helped him learn how our primal brain impacts businesses and lives.

His latest book is titled Unleash Your Primal Brain: Demystifying How We Think and Why We Act.

Early Experiences

Keynote speaking and becoming a primal brain and marketing expert were not on the list of what Tim imagined for himself as a child! After immigrating from Moscow to the US around age 8, Tim set his sights on becoming a cowboy. (Listen in to hear about the deal this made me think of — it was one of the few cash deals from Russia at the time.)

As Russia opened up in the 90’s, all sorts of creative maneuvers were part of making deals!

When Tim reflects on his earliest deals, he remembers shoveling snow in driveways in New Jersey. Rather than charging by the job, however, he created a subscription model. He would charge $5 per week for the three months of winter, and pledge to shovel all the snow during that time. Even as a teen he was a hustler! This reminded me of Joel Block’s advice on subscription models, which he sees as a current business trend.

Brain Evolution & Deal-Making

Tim notes that marketing subscription models makes sense from an evolutionary psychology perspective. Because the sale goes on auto-pilot and minimizes your need to think about something, it’s much easier to get people to continue paying once you’ve drawn them in.

When I used to do deals in the health industry, I saw the shift away from an annual membership that you had to choose to renew, to a month-by-month subscription that had no hard end date. Even though people “could” cancel anytime, they often didn’t. It’s easier not to; plus, canceling sends a message to yourself that you’re going to do the thing you signed up for. 

Tim shared about a subscription he kept for years without using it — even with all he knows about the brain, the same tricks work on him sometimes.

Neuromarketing and Evolutionary Psychology

Eventually Tim came to believe that the best and highest use of his time was not in providing a service. Now, he focuses on keynote speaking and writing. He also offers some consulting for senior marketing executives looking for a backup CMO who will be on their side and make them look good.

When he started his first agency, Tim’s group focused on performance-based deals. Rather than putting the risk on the client, Tim decided to share it. Client’s paid him when he created results for them. However, this created complex contract issues and other issues. For the first time, Tim fully realized how much human nature played into deal-making!

Eventually he opted to sell his shares of that business to his partners, who have experienced continued growth.

As he’s grown, Tim has also explored various options with distributing stocks in the companies he owns. What he’s found from that is that you need clear guidelines if you’re planning to do this! From becoming joined at the hip, to facing confusion about who gets to make what decisions, Tim has found that clarity  is essential when distributing stocks!

Working With Your Nature

Tim notes that we play many roles in life: you can be a parent, a spouse, a CEO, a speaker all at once. Sometimes those roles will overlap, and sometimes they will conflict with one another.

If he could go back, Tim would focus much earlier on his personality and the things that energized him. He shared his DISC, Enneagram, and Meyers-Briggs all helped him understand important parts of himself. In addition, he’s seen how working with his strengths and nature works much better than fighting against it.

In terms of his personal career transitions, Tim breaks them down into three major phases:

  1. Being someone’s employee. Tim had seen soul-killing enterprises from the inside, and he knew he didn’t want to take that path! He knew he could better himself.
  2. Work for yourself. Once he started an agency, Tim felt like now he was basically hiring his own bosses. Yes, he had more control….but at the end of they day, he was still working for clients and answering to them.
  3. Jettison both of those! Tim was ready to be done being an employee…AND done hiring bosses. 

After transitioning into Phase 3, Tim found that he felt a bit naked. He was so used to being an agency head, and realized that he had been defined by that in many ways. One thing he’s really enjoyed is being able to shift from constantly thinking about what would best for his business, into being able to genuinely think about how he can serve others.

I love this way of thinking, and have done quite a few exercises myself pertaining to establishing personal identity outside of my titles and roles. Certain roles can truly become entwined with who you are as a person!

Unleash Your Primal Brain

Tims’ newest book, Unleash Your Primal Brain: Demystifying How We Think and Why We Act, is a crash course on being human. He covers everything from sleep, chemicals in the brian, storytelling, and more. It’s not dumbed down, but it’s not just a bunch of jargon either. Tim thinks of it as a fast-paced detective story about what makes us tick.

Although I’m not the expert Tim is, I have done some reading on neuroscience and brains. My biggest takeaway: this field is constantly evolving because there is so much to learn about this! Tim is working to unify fields like neuroscience, behavioral economics, anthropology and more by breaking down silos and finding the red thread of evolutionary psychology.

He sees this topic as being what all 8 billion people on the planet have in common!

My question to Tim: from an evolutionary psychology perspective, what makes some people “deal-makers” and others not so much?

We Are Always Negotiating

First off, Tim notes that, as humans, we are always doing deals because we are always negotiating. Being able to engage with negotiating is a useful skill to have across the board.

Tim shares that when things are black and white, we automatically evaluate and accept them for what they are. If something is a sure thing, or is definitely going to fail, we know where we stand. However, once we start bringing in probability, statistics, and chance, things feel much riskier. People pay a premium when risk is reduced.

In fact, Tim notes that guarantees (such as a lifetime guarantee) have a huge impact on sales. All sorts of packaging uses this now; it gives immediate peace of mind that makes the consumer feel good, and the percentage of people who actually exercise it is tiny. 

Creating certainty and minimizing risk is a major deal-making plus!

Next, Tim notes that we all tend to aversive to threats more than we are open to rewards. We’re tuned in to loss and pain avoidance much more than we are to pleasure seeking. Pain is more motivating! For that reason, the way we frame offers in our deals is key. For instance, if a doctor tells you that you have to have a procedure, they could present it in one of two ways: there is a 95% chance you’ll make it through OR there is a 5% chance you’ll die. The former orients you towards the positive, the latter orients you towards the negative.

Most deal-makers can find ways to frame their deals that emphasize the positive and decrease the focus on pain and loss. It makes a difference!

Due Diligence as a Deal-Maker

I always tell people that doing a major due diligence process to prepare for a deal is a key part of preparation. Why? Because the people walking into the deal are highly risk averse. They stand to lose a lot if things go wrong, and they want to avoid any problems.

As such, if they smell smoke during a deal they assume there is a fire.

Rather than letting that happen, you must do your due diligence and ensure that you have your ducks lined up. Tim also noted that, as a deal-maker, you don’t want to let the party you’re deal-making with get too far into their analytical brains. He suggests you diffuse that mindset and refocus on the bigger picture if you want to avoid death by a thousand cuts.

(During the interview, Tim recommends two books: Never Split the Difference and Pitch Anything.)

To learn more about deal-making and the primal brain, listen in to the full episode! Tim shared more amazing thoughts on cold cognition, the role of emotion, and more in this powerful interview!

Corey Kupfer is an expert strategist, negotiator and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author and professional speaker who is passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

If you want to find out how deal-ready you are, take the Deal-Ready Assessment today!

Categories
Authentic Deal-Making Deal-Driven Growth

Licensing Deals

This week, we’re talking about licensing deals! Personally, I think licensing deals are underutilized. I’d love to see more of them happening, as there is so much that can be leveraged in this form of deal-making.

What Can You License?

Anything that is created by you or your team (physical or intangible), is potentially licensible. Who will license it? Someone who will want access because they know they can leverage it in their own life, business, or community. 

Licensing Deals & Inventions

First off, we have things that are patentable. This includes inventions and products; something you’ve created you can put a patent on. Chemical, mechanical, systemic, software; all of these types of inventions are things you can license. Bigger companies are especially interested in paying for tools that will enable them to manufacture, market, or otherwise use what you’ve built. Now, a large company would probably prefer to outright purchase what you’ve created — but don’t let them make you believe that that is your only option! 

Even if you make a worldwide, exclusive, into perpetuity license that states only they can use it (and you won’t sell it to anyone else), you can still create a licensing deal rather than outright sale. 

Of course you can also be thinking about ways in which to license your invention out to many companies, including competitors! By licensing the rights to what you’ve created, you can make a lot of money. It’s worth considering!

Also, think beyond physical items for this one. Training programs, keynotes addresses, workbooks, and so on; all of that can be licensed and sold to organizations who would love to use your content, curriculum, handouts, and frameworks. In the full episode I dive further into how you can make this desirable for your clients as well!

Listen here to catch my full interview on leveraging intellectual property rights with Bill Cates.

Structuring a Licensing Deal

A major early question that always comes is what the licensing fee or royalty is going to be. Every industry is a little different here; for instance, there could be a lump sum of money up front in order to get the rights to the license. In other cases, that isn’t an expectation.

In any industry, however, the idea of an ongoing royalty paid out to the owner is pretty standard. Monthly, quarterly, annually or other iterations are common. Total percentage varies greatly by industry; as a deal-maker, you’ll want to take a look at the norms within your industry as you consider this option.

The licensor will want to ensure that the base for setting the commission is top-line revenue, or a percentage of gross revenue. Why? Because once you get below that gross revenue line with a licensing deal, there is a lot of ability to manipulate and control what the number being used. Gross revenue is very clearly defined and diminishes game-playing.

As the licensor, you’ll also want to clarify some form of reporting to accompany your scheduled payments. This gives you a framework to ensure that the payments are appropriate to your deal. Keep in mind, however, that a report doesn’t mean that much if you can’t verify that it is accurate. The only way you can ensure accuracy is to retain some form of audit rights. You’ll want to know that you, or a third party provider, can double check to ensure that everything is above board. 

Exclusive vs. Non-exclusive Deals

Depending on your industry and product, this may go either way. What should you do? 

First of all, the licensor will want to lean towards non-exclusive deals. It makes sense that you stand to generate the most income by being able to create licensing deals with multiple parties for the same invention or intellectual property. However, that isn’t always an option.

For example, some organizations may need to know that they have exclusive rights to use a certain tool or framework. Now, this may extend to only certain industry competitors or geographic areas that you agree not to create deals within, or this could be complete exclusivity across all sectors. If you license it to one company in healthcare, for instance, you may agree that you will not license it to other healthcare groups, but that you can license it to a group outside of their domain, such as an automotive group.

Worldwide exclusivity that disallows you from licensing the group to anyone ought to be tied to minimum returns. This can at least ensure that you will make a return, even though you are limited to a single licensee. Now, if the minimum is not met, there are a few options.

For instance, the licensee may be allowed to maintain the license, but lose exclusivity. Or, the licensee may lose access to the product altogether. All of this needs to be included in the agreements!

Areas to Be Aware Of

Each state has variations on their rules about licensing. Something to be very aware of is the difference between a license and a franchise, which will differ in each state, and also has federal law attached.

For instance, McDonalds is a large franchise. You can’t start introducing your own food products into McDonalds, even if you are running your own location, because it is a franchise. There are expectations around how things have to look, how food is cooked, and what decisions you get to make. In a licensing deal, however, this level of restriction doesn’t usually apply. Does this mean that licensing is a free for all?

Well, as a licensor you do want and need standards! After all, your property and the elements of your brand or name that are being utilized are things you still want to reflect positively on yourself. If a licensee is using your product or performing in a way you no longer desire to be connected to, you may want to allow yourself an escape hatch. 

Creating these standards can begin to cross line between licensing and franchising, which is why it’s so essential you understand the differences in your state. I highly recommend working with a professional for that part!

To learn more about finding licensees and getting started with licensing deals, listen in to the whole episode!

Corey Kupfer is an expert strategist, negotiator and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author and professional speaker who is passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

If you want to find out how deal-ready you are, take the Deal-Ready Assessment today!

 

Categories
Authentic Business Relationships Authentic Deal-Making Authentic Leadership Authentic Negotiating Deal-Driven Growth

Angel Investing & Startups with Dom Einhorn

Dom Einhorn is a French-American social entrepreneur and founder and CEO of UNIQORN, the largest rural incubator-accelerator of its kind in the world. Located in southwestern France (Sarlat-la-Canéda), its mission is to give entrepreneurs and their families their lives back while helping them build game-changing technology startups. Dom has a long history of working with startups and in angel investing, and he shares so much wisdom in our interview!

He is also the founder of multiple other successful startups and businesses, including the Startup Supercup. This is a leading tech conference that unites 1000 carefully vetted angel investors, VCs, private equity funds, technology startups and leading media outlets from around the world. The three-day conference takes place in medieval Sarlat France.

Listen in today to hear all about Dom’s work!

Young Dreams

As a kid, Dom wanted to be like his dad, who worked for the French railway as an engineer. Clearly he ended up going down a different route!

The first deal-making experience he remembers was with his magazine route. Students could get a commission for every issue they sold, and Dom outsold everyone else. It was his first time getting compensated, and it sparked his entrepreneurial dreams.

Now, Dom has several major focuses. One major one is UNIQORN, which he returned to France to launch in 2018 (in German Dom’s last name means “unicorn”!). UNIQORN startups are provided with a complete ecosystem for success. This includes direct access to proven funding sources, top-notch legal and accounting representation, access to the world’s most generous business incentives and, most importantly, a dedicated sales and marketing accelerator. All that combined puts a startup’s product or service on the fast track to success.

Art Auction Adventures

In 1996 Dom created the first online art auction company. It quickly became one of the largest in the world, and he was able to turn around and sell it 5 months later.

At that time, Dom happened to have a lot of artists as clients. They were all “starving artists”, including himself! He decided to build the online art auction in order to solve a problem he saw his clients facing. Selling art on a one-off basis was difficult, and didn’t scale well. His solution? An online auction house.

The first few months saw little activity, but one day a major magazine came in and did a report. They skyrocketed from 150 bidders to 20,000+. Overnight, they were in the art business….which they realized they knew nothing about. They were shipping art uninsured, with glass, and found themselves in a logistics nightmare.

One day they got an email from a buyer willing to buy them out; Dom was ready to move on and do something else! The new buyer had infrastructure to handle logistics and shipping, but were lacking on the technical side. Their weaknesses were Dom’s strengths, and they arranged a 6 month transition period. Once their team had the platform knowledge they needed, Dom was fully out of the business.

The fundamental lesson he learned from the online art auction house was that whatever you launch you should serve a legitimate purpose and respond to a problem in the market.

Vanity Business Models

Dom has noticed there are a lot of companies popping up that don’t solve a new problem or reach a new market. He referred to these as “vanity business models”, and noted that they simply aren’t sustainable.

If you want to become a billionaire, help a billion people. The rest will happen by itself.

Early on, Dom noted that if you wanted to be in e-commerce, you needed an Oracle license that cost $32,000. Raising cash was key, because barriers to entries were extremely high. By 2015, if you had a couple hundred dollars worth of technology you could launch an entire business. That’s both a blessing and a curse; there isn’t a natural economic gatekeeper. That means more opportunity for more people, but can also mean there is no real vetting process pushing people to only bring the best ideas to the table.

Back in the 90’s, you had to be in Silicon Valley if you wanted to get backing or support. Now, however, you can be anywhere. Dom shares that when he’s visited Vietnam with his wife they’ve seen co-working spaces the size of Walmart, with teeneagers building out online games that are worth billions now. The market is expanding, and decentralization has really democratized the process.

Dom foresees that we’re heading “back to the garage”, where things first started for technology.

Moving Away from Cities

Prior to Covid, Dom’s UNIQORN team did a study and found that 12% of young entrepreneurs wanted to move away from large urban centers to launch their businesses. Today, 38% say they want to operate outside of large cities.

He feels that the world is coming to the realization that not only CAN that be done…it probably should be done.

Dom shared some great examples of employees who have new commutes of about 45 seconds on foot. He’s seen this new way of living and working lead to better quality of life, with employees who are fresher, less tired, and able to show up in a different way. Now, more than ever, people see what is possible when it comes to living and working outside of major metropolitan centers of business.

This trend isn’t just in entrepreneurship. Large companies are starting to realize that their people can be just as productive working remotely as from inside the office. Employees are also starting to show up to interviews with more confidence to request remote or flexible work options.

From No Cash to Major Deals

In the first 2-3 years of one of his early startups, Dom was ready to throw in the towel. By 1999, however, the company exploded. They had a leg up on the competition, they were gaining traction for clients, and things were taking off. From a handful of clients to 500+, they grew with amazing speed.

One day Dom realized they had run out of money. Because of their fast growth, they had been burning through cash at a much faster rate than he had thought. It was time for payroll, and the reality was: there wasn’t enough money to pay everyone.

Dom was sitting at his desk, trying to get creative with numbers, when he got a call with an offer: someone wanted to buy the company. Although he first held out on selling, the offer was too good to refuse. The seller was building a new technology, and they needed merchant relationships. When the check was put on the table, he took the offer — then rushed to the bank so he could deposit it and make payroll.

When clients are pouring in and business is booming, entrepreneurs often underestimate the need for cash flow and profit. What Dom learned the hard way was that revenue and profit are not the same thing, and profit margins are an absolute key.

Dom shares that when he looks at a new business now, he doesn’t pay any attention to top line revenue. All he wants to see is actual margin, because that’s where you can see how healthy and sustainable a business is.

Building Value

Dom’s had deal-making success throughout his life because he’s built value again and again. From the outside looking in, buyers were able to see that value, and they came to him. That’s a much different situation then being in a bad place with your business and desperately looking for someone who might be willing to buy.

If you focus on solving a fundamental problem, Dom believes that there will always be people out there looking for what you have. He’s never proactively gone out looking for a buyer, because the people who need the solution he’s created have always been able to find him.

To hear more about the ways in which Dom has leveraged strategy, connections, and deal-making, listen in to the full episode!

Corey Kupfer is an expert strategist, negotiator and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author and professional speaker who is passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

If you want to find out how deal-ready you are, take the Deal-Ready Assessment today!

Categories
Authentic Deal-Making Authentic Leadership Deal-Driven Growth

2021 M&A Outlook

This week on the solocast we’re checking out the 2021 M&A deals outlook. It’s been interesting to take a look at what people are seeing, and what might be around the corner. M&A deals tend to be especially easy to find information on, and often give indicators about other deal-based forecasts as well. 

As always, there are no guarantees in the deal-making industry!

2021 Industry Predictions

Many experts are predicting a robust year for 2021 M&A deals. This is in line with what I’ve been experiencing, and other statistics are bearing it out as well.

Big publications and industry newsletters for tech, insurance, pharmaceuticals, biotech, logistics, and more seem to be reporting that trends are looking positive. Why? What’s leading to such a robust 2021 M&A outlook when we’re in the midst of a global pandemic and other economic issues?

Well, in the economy overall we’re seeing few things happening.

  1. More Positive Deal-Making Outlook

We’re seeing our way towards the end of the pandemic. Vaccines are going out, and we’re seeing the light at the end of the tunnel. That may trigger an expectation that the economy will be opening up more, and contribute to the positive M&A deal outlook for 2021.

Also, the second half of 2020 was unbelievably strong. That was mid-Covid, with no end in sight. Although the spring and summer of that year was rough, things really did recover and we were on an upswing prior to 2021. That means there must be other major factors at play here!

  1. Impact of the K Economy

A K-based recovery speaks to the idea of both upstrokes and downstrokes as part of the overall economic repair. This fits 2021 because we’re seeing that some industries, like retail and restaurants, are suffering. Other industries, however, are booming. 

The downstrokes speak to reasons that deals would likely slow down or struggle. The upstroke, however, denotes areas where deals would possibly be growing and seeing massive success. Logistics, tech, pharmaceuticals: these are businesses that have seen robust growth.

I’ve also seen that both the upstroke/downstroke of a K economy can lead to increases in deals. In a boom economy there are major amounts of capital available. In fact, there are trillions of dollars of private equity money available as investment capital right now. That’s significant when it comes to funding deals. On the flip side, in a down economy companies are looking for ways to survive. This can include sales, combining multiple businesses, and major pivots that result in deals. Companies need to consider how they can add more value, alter their business models, and reevaluate what they’re doing.

In a K economy, deals are available for a plethora of reasons, and that may be contributing to the positive 2021 M&A outlook. Regardless of the size of your company, you may find that you can benefit from deal-making in the upcoming months.

What Are the Trends?

Even if you aren’t large enough to be a trendsetter yourself, you can still benefit from looking at current trends. Where are large companies spending money? What deals are they making?

You may find yourself discovering trends within an industry, niche, technology, or platform that you can take advantage of in your own way. Perhaps growth, product/service development, or deals of your own will develop as you identify the trends impacting the market.

At the end of the day, there is no crystal ball. No one knows exactly what’s happening next. All you can do is remain aware, do your own homework, and make informed decisions for yourself and your business. I’m cautiously optimistic, especially as I’m operating in many sectors experiencing an upstroke in the current economy. I’ll continue to stay aware, examine trends, listen to insiders as I make more 2021 deals.

If you’re interested in the 2021 M&A outlook, check out the full episode!

Corey Kupfer is an expert strategist, negotiator and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author and professional speaker who is passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

If you want to find out how deal-ready you are, take the Deal-Ready Assessment today!

 

Categories
Authentic Business Relationships Authentic Leadership Authentic Negotiating Deal-Driven Growth

How to Hire the Best

Business psychologist, How to Hire the Best author, and Tap The Potential Founder Sabrina Starling is back with us again! This time she joined me for an amazing interview we conducted live on Facebook. Dr. Starling has coached thousands of entrepreneurs to overcome the day-to-day struggles of business growth by getting out of their own way and developing a success mindset that propels them to higher and higher levels of success (and profitability). Last time we talked we focused on transforming small businesses into highly profitable, great places to work. Today, we focused in on her latest book in her How to Hire the Best series.

Small Business Owners with Growth Opportunities

Years ago, Dr. Sabrina realized she was working with small business owners who were passing on growth opportunities because they didn’t have the capacity to take on anything new. They were stuck in that place so many entrepreneurs find familiar: running their business reports, ordering supplies at Staples, and wearing so many hats they were ending every day drained and exhausted.

Even though they were reaching the point where more and more opportunities were naturally coming their way….they had maxed themselves out and could no longer take advantage of their natural momentum and growth. If they did happen to have an employee or two, they were often what Dr. Sabrina calls “warm body” employees. That is, they were technically hired to work there, so they were there. They didn’t really have that A-Player, above-and-beyond, valuable asset energy of someone who could help you reach a new level.

Dr. Sabrina knew what they needed: to hire A-player employees and increase their capacity! However, she also knew that hiring is a huge commitment. From candidate searching and posting your job, to screening and interviewing, to onboarding and then releasing responsibilities to this new team member — the time, expense, and potential for things to go wrong make it feel prohibitive!

That’s why so many small business owners and entrepreneurs make the choice to put off hiring until “later”. The truth of the matter is, however, that you will never magically become less busy. If your business keeps growing (which is usually desirable!), you’ll actually have less time and capacity. You have to choose to either “cap out”….or find a way to expand!

For Growth, You Need A-Players

As a business psychologist, she tried coaching business owners on how to turn their “warm body” employees into something more…and it just didn’t work. The alternative, however, seemed to be hiring top-line employees. A lot of small business owners didn’t feel that was possible. After all, the more skills and experience someone has, the more they expect to be compensated. 

This felt like a true dilemma, and was one Dr. Sabrina herself believed for quite a while!

One morning, however, she woke up with this question: “What if it’s not true?”

That question resulted in the search for small business owners who already had employees they considered A-level. She started interviewing them, and kept asking how they had found them and hired them. Their answers, again and again, were “I don’t know!”. (They also requested she come back and tell them if she ever figured out, because they all wanted to do it again!)

I see that as “unconscious competence”, which Bob Proctor has done lots of work on! Somehow, some small business owners had hit the hiring jackpot. Since they weren’t clear on how they had done it, they weren’t able to truly profit from it.

Eventually, Dr. Sabrina found that networking and word of mouth seemed to be the key for success. (Very similar to the most proven marketing techniques for finding clients.) Because the small businesses employing these tactics weren’t aware WHY they were working, they hadn’t been able to consistently and methodically employ them for ongoing, repeated hiring success.

Traditional Hiring Methods Don’t Work

When you follow traditional hiring methods, you have a 1 in 4 chance of hiring an A-player. (And a 3 in 4 chance of ending up with another “warm body”.)

Traditionally, you decide you need to fill an opening. You make a job ad, and put that out into the world. As applicants respond, you complete interviews, then you pick someone. That’s how we tend to do it….and that’s the method that offers a 75% chance of missing the best fit for the role.

In How to Hire the Best, Dr. Sabrina teaches employees how to leverage her non-traditional method that’s been proven to work consistently.

Part of her approach includes starting with the end in mind, and employing best practices in a strategic way.

The first question I had is, “When does all this start?” I knew it probably wasn’t going to be “Once you realize you need someone.” – and I was right!

A-Players Think Differently

For one thing, Dr. Sabrina notes that traditional job postings tend to attract people who are unemployed. This can mean they’re willing to accept anything — even if they aren’t that excited about your company, mission, or values, they’ll position themselves as if they are because they need the job. 

A-Players, however, move from one opportunity to the next. They are looking for opportunities, and they transition when people in their networks let them know about promising positions. You should be networking for A-Players long before in the position of desperately needing to hire.

The best time to hire is when you are generating consistent business leads. As soon as you hit your rhythm here, you should be tapping into your networks and using them to look for your next A-Player. I appreciate Dr. Sabrina’s technique here, and see that it would fit into the bucket I call “entrepreneurial freedom”. 

It’s important to note that A-Players aren’t necessarily people who are superstars on every level. An A-Player might be a role player with a very specific ability or capacity — but in your business, that ability is what enables them to shine. You can’t be the best at every single thing, and your employees can’t be either. It’s not fair to expect that from them!

Hiring an A-Player is more about bringing on the people who have the gifts, talents, and personality strengths to do what you need them to do. They also need to resonate with your business’ values and culture. When you can get them plugged in, the change is powerful!

So who are these magical people? Well, they are go-getters, problem solvers, and autonomous agents who know how to use resources. A team full of people who think like that can change your business from the inside out!

Build Your Team to Create Your Desired Lifestyle

Regardless of what you do, building a team enables you to create a lifestyle business that will allow you to step away as needed and have your business continue to run without you. (Your A-players are there making it all happen!) 

This could mean you’re setting yourself up for a 4-week vacation, or that you’re working on a future transition plan. Dr. Sabrina notes that no one comes along and says, “I hear you work 70+ hours a week in your business. I’d love to buy it!” No one is looking to buy a job, they want to buy a business.

When you learn how to hire the best, you’re setting your business up for success, both now and in the future. The more A-Players you bring on to your team, the more value you are adding.

Dr. Sabrina notes that if you currently have many players who are more like D-Players, it can be overwhelming to know how to fix it. She encourages business owners in that position to focus on hiring up as they grow. That might mean you have the chance to replace someone, and you find an A- or B-Player for the open position. Once you hit a tipping point (say 3 out of 5 are strong employees), those who are lower performers will either choose to leave, or will rise to the challenge. 

Gradually, your culture will shift!

If you’re looking to hire the best, you NEED to listen in to this interview!

 

Categories
Authentic Deal-Making Authentic Leadership Authentic Negotiating Deal-Driven Growth

Strategy for Intellectual Property

David Kalow is a University of Chicago law graduate, and now focuses exclusively on intellectual property. According to David, most companies – both large and small – need help to improve their strategy for intellectual property (IP). This includes making it even more valuable, cost-effective, and revenue-enhancing. IP strategy leverages a company’s most critical assets in the 21st century global economy: ideas and creativity.

Ultimately, he helps you to create and implement an effective, long-term strategy to manage your valuable intellectual property assets, including assets you may not even realize that you have! 

Was Intellectual Property Strategizing Always in the Cards?

David shares that his earliest goal was to be a space pirate. These dreams were based on his interest in sci-fi, and he was sure they’d come together at some point. As he grew up, he assumed he’d find himself working in science, or some other “nerdy” field. He never visualized business!

Once he completed law school and entered the field, David found that he learned deal-making slowly and academically. Starting his own law firm, and later his own solo practice, was his own way of being an entrepreneur. It may not have been what he planned, but he’s excelled!

Now, David’s objective is to make it easier to expand and accelerate business development while reducing legal fees. Your improved IP strategy can strengthen market positions, increase valuation, assist with funding and VC, energize deal making and strategic partnerships. It can even improve hiring, marketing and sales. It benefits early stage startups as much as small, medium and Fortune 100 enterprises, as well as those who finance them, such as VC’s and private equity.

Strategy for Intellectual Property

Any business has intellectual property, and David believes most business owners and entrepreneurs aren’t taking full advantage of it. He does see pharma, medical device creators, and biotech companies tending to appreciate IP and use best practices to strategize it the most. However, even there he tends to see many mistakes made.

According to David, most of these mistakes are common and avoidable when you know what you’re doing and understand the field.

For example, a strong strategy for intellectual property looks at all of an organization’s potential intellectual assets. It then uses every possible IP tool: legal and procedural, formal and informal. The first things people think of, like filing patents, trademarks, and copyrights, are really just foundational basics in what should be a much more comprehensive strategy.

Assuming that doing those basic tasks is enough is a huge mistake (and a very common one)!

Intellectual Property Isn’t Just for the “Big Guys”

David finds that strategizing their intellectual property is most important for startups and small businesses. Why? Because in the beginning, that can be all you have.

There are three major property types: land, personal property, intangible. Most of today’s companies aren’t based on owning large amounts of land or unique personal property (like factories, et). Rather, they are based on intangible assets.

If you don’t know how to use, understand, and appreciate IP, you won’t last. Missing opportunities to strategize your intellectual property will injure your revenue making capacity and potentially ruin your business. On the show, David and I discuss a few options for entrepreneurs and business owners to leverage their IP. One important option?

Use an appropriate blend of patent, trademark, and copyrighting.

There are so many ways to leverage your IP! You have to think about how you can leverage them in order to accelerate and strengthen your business. This includes deal-making with those intangible assets, as well as getting protection to ensure that you’ll retain downstream usage of your IP.

The worst use of your IP? Getting it wrapped up in litigation! Think through the fight if you want to avoid the fight, and get the protection you need to confidently strategize for using your IP on the market and within your business.

Think Creatively & Build Your Long Game

For 20 years, David had a client who collected hefty royalties from well-protected IP. By using patents and trademarks across multiple dimensions (software, chemicals, engineering, etc), they were able to bring to market a product that was necessary…and that simply couldn’t be provided without their input.

Rather than only protect their output, they found ways to protect their valuable processes, systems, and tools that made that output possible in the long run.

For years it was standard for computers to have CD-ROM players. Of course CD’s were patented, and the IP involved in their creation and use allowed the creators to benefit for years. It wouldn’t have been market-friendly to have every system use a completely different tool, and the best-positioned one was able to earn the whole market (and the financial gains that came with it).

Cartier watches were able to use trade dress (appearance of goods as the trademark) in a powerful way that enabled them to stand out in the luxury watch market. There are so many ways to leverage intellectual property, especially when you’re familiar with how the field works and what your options are. (This part of the episode reminded me of Bill Cates interview on leveraging IP!)

Make Sure You Protect Your IP Rights

Make sure you have the right agreements with employees and contractors to ensure that IP is flowing into the company. You must own your own rights, and sometimes when you work with freelancers or others on the work-for-hire market you don’t always have the ownership you think you have.

Rather than open yourself up for disputes down the road, you’ll want to do your due diligence on the front end to ensure that you’re protected!

Another note: IP doesn’t mean you have to become greedy and Scrooge-like! Strategy for intellectual property can be good for you, your business, and the world. David notes that research has shown that open federal patents are rarely utilized. Why? There is no ownership incentive, so it’s hard to generate funding or find people willing to invest time and energy to build them out. After all, whatever they create isn’t really theirs.

When you protect your work and have ownership, there can be a positive incentive towards building and investing.

The real reason behind patents is to reward owners and investors. After all, if there is no chance in a return, there is likely no one who will invest. Whenever money gets put into an idea, there is no guarantee that it will work out as planned. Having that idea protected and invested in gives it a chance to take its shape and change the world!

Patents also allow us to maintain and share ideas, without losing our rights. There are so many technologies of old, based on trade secrets, that are simply gone forever. Why? Because the inventors kept them secret, and no one knows how they worked! We diminish the power (and losses) inherent in trade secrets when we make it safe to share our discoveries and work.

Listen in to learn more about how to best create strategy for your intellectual property!

Corey Kupfer is an expert strategist, negotiator and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author and professional speaker who is passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast..

If you want to find out how deal-ready you are, take the Deal-Ready Assessment today!

 

Categories
Authentic Deal-Making Authentic Negotiating Deal-Driven Growth

Curating Quality Investment Opportunities

Marcia Nelson is the Managing Director at ShareNett. This is a members only global network of professional investors offering curated, quality investment opportunities. In addition, Marcia is the founding partner of Triple C Advisory. She’s spent a great part of her career working with family offices as a Family Office Advisor. Also, Marcia has been a board member for multiple boards, including VentureCapital.org. She is the president of ACG-NY.  Marcia is also a speaker with a great passion for impact investing. She was recently named one of the 2020 Most Influential Women in Mid-Market M&A by Mergers & Acquisitions magazine.

You can listen to the full interview HERE.

Marcia Nelson’s Early Deal-Making Experiences

While growing up in Salt Lake City, Utah, Marcia would have never guessed she was going to end up in the deal-making world! Her initial degree was in education, and she did teach for a few years. When she moved to New York with her fiance she fell in love with the city. She hasn’t looked back since!

After an initial experience with Conde Naste and the fashion industry publishing, Marcia switched gears when the dot com boom appeared. At that point she went back to graduate school, where she earned her MBA. Returning to the business world after completing her degree kicked off her deal-making career. She’s stayed in the industry ever since!

Most of Marcia’s early deals were in the ESOP ring. She enjoyed learning more about how employee stocks worked, as well as how complicated they could be. This opened a whole new world to her, and she was able to work on many related deals during this time. Early on, she was intensely fascinated by UPS’s use of ESOPs in their business.

Boutique Investment Banking

ShareNett is a boutique investment bank. They do traditional investing, but their niche is finding deals from family offices. Once found, they then partner or club with other families. ShareNett sifts through a lot of “noise” so they can filter the best quality investment opportunities for their clients.

Marcia shares their deals typically start around 10 million. She finds ShareNett can be extremely helpful in the 10-100 million dollar range. She really enjoys working in the family office space, and most often finds herself working in the mid-market arena.

One commonality Marcia is seeing with family offices is having a second or third generation who are actively pushing hard for impact investing. This falls in many spheres, including green energy, sustainability, and other ethically-based fields. She also sees many family offices who have made their mark within a specific field or area; she finds they often prefer to continue working within those same spaces with investments moving forward. If branching out, it often occurs in conjunction with another family office that is more familiar with the space.

Outside of all the political wrangling, there seems to be a demographic shift in which younger generations are inheriting wealth and being given more control over where the money is going.

Marcia believes that investments and philanthropy are beginning to be less mismatched. Younger generations are seeking to decrease the mismatch between where the family office is investing and where they are donating. Quality investments that do good are of great interest.

Making money AND doing good, all without having to rely on investment cycles that tend to fluctuate, is a powerful direction that many businesses may be going. Rather than seeking to become a non-profit, it might become more popular to stay for-profit, but use a percentage of proceeds to fuel social movements.

You no longer have to accept lower returns in order to do good! In fact, you can do good and expect comparable returns.

Other Marketplace Trends & Investment Opportunities

Marcia also notes there seems to be an increased interest in bringing manufacturing back to the US. She attributes this to supply chain disruptions as a result of the pandemic. Covid-19 highlighted just how many products we rely on are being manufactured elsewhere and shipped in.

Many businesses are using repurposing to make this work. They’re finding with small shifts, they can manufacture more of what they need here. Although supply chain issues will never fully go away, adaptations can be made to decrease disruptions.

However, there may be a difference between various types of technology. For instance, there’s a huge difference between bringing steel back, versus producing technological components here. Marcia agrees, noting that manufacturing trends are more manufacturing focused. As a result, many quality investments will likely be made in the US manufacturing markets.

Game makers and recreational manufacturers are also seeing a boom right now, as a result of the pandemic. That might be a short term change, but could also be part of driving deals at the moment. Because people are looking for more ways to spend time outside or engage in private recreation, it won’t be surprising to see continued growth in this area. At least for the time being, recreation is growing!

I noted that Rha and I are in the process of looking around for non-metro-based housing for the future. Based on how things have been going, it seems like it might be a quality investment! We typically split our time between major metros in New York and California, and we’re starting to think somewhere in the mountains might be a better bet. Although that’s not something everyone can do, it may start to become more common in the future. This is especially true for those who are looking at purchasing new properties.

Multi-Generational Investing Families

Older generations may have a desire to make quality investments in businesses that have a solid track history and have been around for awhile. Most technology companies, however, have less of a long term history. Younger generations may often be more excited about making investments with new tech, especially as they often feel more comfortable with the tools. 

However, Marcia notes that if you’ve seen one family office….you’ve seen one family office. They tend to be very unique, and are always composed of individuals with their own interests, desires, and comfort with risk.

One of Marcia’s clients made a lot of money in the gas and oil industry. Although they are glad to have made their money, they are excited to pivot forward by turning their attention to green energy. Tthey recognize that gas and oil were brand new, generations ago, and that they did have many positive impacts in terms of growth and expansion. However, attitudes evolve and shift. Families do to, which is a key point to remember if working with a family office!

As families evolve in their thinking, Marcia also notes that it is vital to remain open to their growth and development. Giving them space to change, and working through what that means for their portfolios, is essential.

Marcia’s interview was incredible. To learn more about her role, including a note on ways in which her job sometimes makes her feel like a therapist, listen in today!

Corey Kupfer is an expert strategist, negotiator and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author and professional speaker who is passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast..

If you want to find out how deal-ready you are, take the Deal-Ready Assessment today!

 

Categories
Authentic Deal-Making Authentic Leadership Authentic Negotiating Deal-Driven Growth

Deals For Small Businesses

In this week’s solo-cast, I wanted to spend some time talking about deals for small businesses. If you’ve been a listener for a while, you know that one of our premises is that businesses of any size can do deals, whether you have capital or not. It’s a myth that deals can only be done by big companies with big money. While I do have guests who share about large deals involving large amounts of capital, it doesn’t mean that those are the only deals out there. I’ve also featured many guests who own or work with small businesses, and they are leveraging the power of deals (and experiencing great success!) as well. 

Ep. 3: Ramon Ray, with influencer and sponsorship deals.

Ramon is an influencer who has key connections with businesses and entrepreneurs. He doesn’t have millions of followers, but he has quality followers. He capitalizes on that quality following by creating deals between them and other companies.

Ep. 7: John Bly, with acquisition deals, including deals done without significant capital.

John has been able to attract deals by bringing things other than capital (like partnerships) to the table. Within his first 18 months of business he was leveraging his deal-making power to create growth for his business. Gradually he built up to bigger and bigger deals, eventually moving into a succession deal.

Ep. 34: Julia Pimsleur, with an early deal with PBS that she created out of nothing.

When Julia was first getting started with her children’s language learning company, she was looking for gaps in the market. At a trade show event she happened to realize that PBS had a lot of learning related programming, but nothing in her niche. With some planning, she crafted a pitch and signed a deal with them – no major capital needed!

Ep. 41: Ralph Peterson and I ended up having a brainstorming session on small business growth.

Ralph provides management training and other services. On our episode, we ended up having a full blown brainstorm session on the kind of deals he could potentially create. If you want to get your own small business deal creativity flowing, check this one out!

Ep. 42: Gary Kane, with deals in the lower-middle market.

As a founder, Gary knows all about starting with nothing and building up. He’s also an amazing deal creator. In our interview, we especially talked about the kinds of deals that can be done in the lower-middle market.

Ep. 43: Bill Cates, with leveraging intellectual property and licensing deals.

Bill is a speaker, but rather than depend solely on speaking fees, he’s proactively found other ways to make deals and create revenue. One lucrative (and often underutilized option) includes leveraging his intellectual property to create a successful business. From books to videos to workshops, entrepreneurs can look beyond a fee-for-services model and create deals around licensing!

Ep. 75: Jesse Cole, on using creativity to stand out and grow.

Jesse has built many amazing deals based on partnerships. He’s experienced an incredible amount of success in an industry that is often struggling to get by. More recently he’s been working on online subscriptions and followings as a result of pivoting due to Covid.

Increasing Small Business Sales Through Partnerships

If you’re a small business owner who isn’t necessarily looking to acquire other companies or make deals that require large amounts of capital, you’re not excluded from deal-making! Here are a few things to ask yourself as you consider how you might be making more small business deals:

  • How can you increase sales/growth organically through deal-driven growth?
  • How can you make applications to other companies, industries, or verticals by connecting with those who have access to your market?
  • What opportunities might you have to create deals with those you perceive as your competitors?
  • Who is selling complementary products or services to a client base (or demographic) you’d like to break into?

When you consider the client acquisition cost in building a new customer base, it’s worth it to consider creative strategies beyond marketing. Even though partnering with another organization as an affiliate means giving up a percentage of sales, if they are connecting you with a broader customer base and increasing business, it might be worth it. There is always a cost to customer acquisition; why not pay part of that out through commissions rather than via an ads budget?

Depending how you structure your partnership or affiliate deals, you may be able to upsell and cross sell other products without having to share that revenue. 

Just a reminder: these deals aren’t substitutes for other growth methods. They are, however, additional opportunities for small businesses to pursue.

(I also referenced Damon Gersh’s episode on becoming a dominant force in your industry!)

Licensing & Small Businesses

Licensing is highly lucrative, but often underutilized. If you’ve uniquely created something, however, there are a lot of opportunities here! If you offer speaking, training, or online courses, you can consider additional opportunities to license the content to clients.

Rather than paying per use, or you being paid for each individual delivery, you can use licensing to scale your small business.

You can also consider the “train-the-trainer” model, where you retain control of the content but certify trainers who can use your intellectual property. Often, they pay a licensing fee to continue using your content and resources.

Many small businesses underestimate the amount of intellectual property they have available for potential licensing; take inventory of what you have available, and see if you could leverage it for deal-making!

(I also referenced David Bach’s episode, where we discussed licensing as well!)

Building Collaborative Relationships

Consider using this downtime to get into alignment with other local businesses. 

You could create an association and use it as a platform for networking. You can also build either informal or formal strategies for creating collaborative relationships. Many deals can spring out of these kinds of groups!

I remember an area of New York in which related businesses in the home building/renovation space chose to work together to create a district for customers in need of their services. Even though some of these businesses were in competition with one another, by working together to become the “go to” place for their ideal clients, they increased traffic and business for every member.

Entrepreneurs and small business owners too often think they have to be a lone wolf to succeed. In reality, there are many lucrative opportunities to connect, collaborate, and build growth together. We need to get past our automatic assumptions that we can’t work with our competitors, because sometimes it really makes sense!

What Does it Take to Become a Deal Maker

For small businesses, becoming a deal-maker is about getting past the assumption that you’re too small for that to be a valid option. When your mindset is telling you that being a deal-maker isn’t on the table, you become blind to the options you have available!

Shifting your mentality and opening yourself to opportunities can really get your juices flowing and make you aware of what’s truly available.

Right now the economy has created a strong dichotomy; some businesses are flourishing, and others are really struggling. Take a look around; how might you tap into the markets and businesses seeing a lot of success right now? Or how might you bring extra talent into your organization right now as a result of some of the struggles we are facing today?

Covid has also been an invitation to get creative about deals. Contractual rights, ownership or partnership opportunities, and future profit shares are all on the table.

If you’re a smaller business looking to benefit from deal-making, you should take these three steps:

  1. Change your mindset and understand that you CAN be a deal-maker.
  2. Look at your business goals, and consider who you can partner with to achieve those objectives (don’t eliminate competitors).
  3. Focus on shared objectives, and go to a professional to help you sort out the actual structure and logistics of the actual deal.

To hear the full solo-cast, listen in here!

Corey Kupfer is an expert strategist, negotiator and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author and professional speaker who is passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

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If you want to find out how deal-ready you are, take the Deal-Ready Assessment today!

Categories
Authentic Deal-Making Authentic Leadership Authentic Negotiating Deal-Driven Growth

Create and Transfer Business Value

Laurie Barkman is the CEO of SmallDotBig, where she works with entrepreneurs, private companies, and family businesses on innovation, transition, and growth strategies. All this is to help clients achieve their long-term goals. She also works with closely-held companies to grow the value of their business and prepare to transition ownership in 7-10 years. As the Host of the Succession Stories Podcast, Laurie speaks with CEOs and experts about how to create and transfer business value. Altogether, Laurie has more than 20 years of digital transformation, entrepreneurship, and intrapreneurship in tech, retail, logistics, and service industries — from startups to corporates. 

Laurie’s Early Start

As a young person, Laurie had no idea she’d go on to be a CEO. She did start to recognize pretty early, however, that she was a leader. As a student she was often in situations where she had a chance to make an impact, create change, and coordinate with other students. In fact, her mom thought she’d go into politics and be a diplomat!

When it came time to pick a school and major, however, Laurie still didn’t know what she wanted to do. As a result, she chose a school and area of study that she felt would serve her no matter what direction she ultimately went. Her first career move after graduation? HR!

Laurie considers her first deal-making experience to be selling Hickory Farms meat and cheese as part of a fundraising campaign. She sold so much she earned a prize, and she considers this her first confidence boost in the sales arena. 

As her career has evolved, Laurie notes she has been in a variety of different industries and companies. From startups to billion dollar traded companies, Laurie has found ways to be innovative and creative. Now, she looks back and sees that her journey is what brought her to where she is today.

Healthy Succession Planning

Laurie loves working with entrepreneurial families, in which the founding entrepreneur created something and future generations have grown it into something even larger. She shares about a 3rd generation family business she worked in during her career. The family had moved from horse and buggy delivery to larger transportation to reverse logistics.

Eventually, Laurie was involved in the company’s succession plan. This required understanding the potential of long-term strategy with multigenerational impact. Stakeholders mattered, but so did employees and customers. 

Companies who have this sort of long-term vision inspire Laurie, and she loves partnering with them to help them see the potential for healthy succession possibilities.

As we were talking, I realized that we haven’t had much podcast content focused on family businesses. I’d love to dig into this area even more because there is so much that can be said about family members running a long term business together. There are major partnership dynamics at play, as well as other factors. (Would you be the perfect guest for this? I’d love to hear from you!)

Family Businesses, Family Values

Laurie notes that family businesses are incredibly unique. Each one is a sort of “snowflake”, in that you’ll never find another exactly like it. That’s one of the things that makes them so much fun to work with!

She shared the concept of shirt sleeves to shirt sleeves in three generations. Essentially, the first generation invests and innovates to build something successful, but the second generation is fearful of “sinking the ship”. They are more likely to play things safe and fail to creatively expand and grow. The third generation may be able to turn things around, but it may also be too late. There may also be family conflict, or a family that has grown so quickly that the business cannot sustain them.

Other issues in family succession can be connected to lack of fit or ability to take a business on, or a lack of a successor because there are no family members left.

Building skill sets and creating a pipeline for next generation talent is a key part of succession, whether you want to keep your business in the family or not!

On her podcast, Succession Stories: Insights for Next Generation Entrepreneurs, Laurie has interviewed multiple CEO’s of family run businesses. She has noticed that family run companies tend to be incredibly value heavy. They understand where the values have come from, and how they play out in day to day life. These values are also attached to the history of the company, and it’s essential that they are written down.

She emphasizes that any business can benefit from having value clarity. Another of Laurie’s clients, not a family business, recently came to her without clearly established values. The start of their work together was to figure those out.

Top Down or Bottom Up

Laurie notes that a family board can be a really helpful method for families running a company together. This might be considered a “top down” system. She notes that these boards can include owners or higher level executives within the company in addition to family, but it is comprised heavily of family members. This board is in addition to an executive board, or advisory board. Family boards can help diffuse family tension and provide a forum for conversation.

On the other end, a “bottom up” approach may mean that family members start at the bottom of the business and work their way up. When it comes to family members working within the business, Laurie notes that it can’t be forced. If a family member doesn’t want a role or position, then it will never work.

Strengths, motivation, and fit are absolutely key “buckets”, in Laurie’s point of view.

A healthy succession means that a potential family member needs to have the necessary strengths, they need personal motivation and desire, and they must fit into the role that needs to be filled, which includes personality, organizational dynamics, and more.

Although any of those three buckets might not be 100% at the start, time can change and grow all things. Listen to the full episode to hear Laurie share about a family member who originally didn’t have great fit or motivation, but who later came to realize that running the business was his calling!

Family business or otherwise, healthy succession relies on the ability to create and transfer business value across time. Sometimes there is unnecessary drama and chaos because a business’s leaders don’t know who they would be outside of their company.Rather than let go and learn who they really are, they cling on in an attempt to retain a sense of self. This can be especially problematic in family run businesses, because there are the added pressures of the family name being attached to a certain way of being.

Create and Transfer Business Value

In the technology world, things move fast and the larger successful tech companies are comparatively new. There aren’t many multi-generational families who have been involved in the tech space, and even less with the ability to transfer business value!

Laurie notes that she got into digital marketing as a personal career pivot herself; it wasn’t her first path, as it wasn’t for many. As a result, she had an early look at what it means to have technology or tools, but no market. She also saw that start ups can appear really glossy from the outside, but can be really messy on the inside.

Because her role was connected to succession and going to market, she could see that internal mess was problematic. In another shift, Laurie moved into apparel retail at the start of the ecommerce boom. She considers that a corporate start up, in that it was an established company doing something brand new. Again, she was involved in structure, scaling, and marketing. Her career has allowed her to work with budgets of a hundred dollars, and a hundred million dollars.

As a result, Laurie knows how to assess a business and get to the root of what’s working and what is not. She has an eye for understanding fit, operational needs, and market, all while building value.

She also knows what it means to create and transfer business value. Rather than leave money on the table, Laurie helps businesses think through healthy succession based on the transfer of accrued value.

Now, Laurie loves working with small to medium privately owned companies in order to bring together a strategic planning process that creates momentum to move forward. When a team understands where they are going, they are aligned and empowered to grow. This brings a business to life; it’s creating the plan AND executing, which is key. (90% of strategies don’t get implemented….which renders them worthless!)

Listen in to Episode 93 to hear the full interview!

Corey Kupfer is an expert strategist, negotiator and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author and professional speaker who is passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

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