The field of Exit Planning is ever changing and growing, but above all: Exit Planning is about building value in a business to prepare the owner for a sale. We recently spoke with John Warrillow, the Founder of The Value Builder System TM and author of the new book The Art of Selling Your Business, about how advisors and business owners can build, accelerate, and harvest value.
The Value Builder System TM is a method of 12 unique steps designed to improve the value of a business. By learning and using this system, advisors can gain the designation of a Certified Value Builder TM. Currently, around 1,000 advisors from six different industries have this designation. Warrillow says, “We have a fairly good mix of advisors including business coaches, management consultants, business brokers, Mergers and Acquisitions professionals, Accountants, and Financial Advisors”. The Certified Value Builder TM designation is another tool in the advisor’s belt that help owners successfully build value in their businesses before an exit.
“We have a ton of CEPAs as Certified Value Builders. You can think of a CEPA as a much broader designation than the Certified Value Builder designation. With a CEPA you are getting into the owner’s personal readiness, financial plan, wealth plan, and tax plan. Whereas the Value Builder is very narrow. It’s getting your owner personally ready and getting the business ready to exit”, Warrillow states. Both CEPAs and Certified Value Builders will benefit from John Warrillow’s newest book, The Art of Selling Your Business. “A lot of financial advisors use The Art of Selling Your Business as a tool that starts and stimulates conversation”, explains Warrillow.
Q: How does this book fit in with the first two books to form a complete trilogy?
A: “My first book, Built to Sell, is about how you build value in your company. The essence of building a transferrable company or one that others will also find valuable. The second, The Automatic Customer, is about accelerating value through recurring revenue. The idea that once you have a valuable company you can really turbo charge the value by creating recurring revenue. The third book, The Art of Selling Your Business, is all about harvesting the value that you’ve created. So once you’ve read the first two, hopefully you have built a company that is worth something. And you think “Okay, how do I turn that wealth on paper into liquid wealth?” It’s all about harvesting the wealth in your business. Once you’ve built a valuable company, the next challenge is getting someone to pay for it, and that’s the essence of the book.”
Q: What was your favorite interview that you shared in the book?
A: It is hard to pick just one. I interviewed one business owner every week for 5 consecutive years and to my knowledge this book is the largest collection of case studies of privately held business exits in the world. The reason for that is that usually with the sale of a privately held business, although lifechanging for the owner, they don’t usually show up in magazine stories. Our specialty is businesses that sell in the $1-20 million space. The story of the founder of Cigar City Brewing, Joey Redner comes to mind. He built Cigar City up and decided that he was ready to exit for a variety of personal reasons. It’s a great story because it illustrates the many different reasons a business owner may choose to exit their company. Some exit planners perceive retirement and selling as synonyms. A lot of what I hear from exit planners in particular is, “when Bob is ready to retire, he needs to get his business ready to go to market”. But Joey Redner sold his company in his 30s – decades away from retirement. If your only lens on the triggering event is the desire to retire, I think you miss a huge portion of business owners that exit for very different reasons.
Q: How does being a business owner yourself, specifically an exited business owner, help you position your content, process, and tools?
A: It has helped me in interviewing the entrepreneurs for the book. What I’ve done to gather those interviews is ask questions that I am personally curious about having been a business owner and currently being a business owner. I have been in the shoes of the people I am interviewing. Have they thought about the same questions I have grappled with? The book is not my personal experience in selling a company, in fact I hardly touch on my experience at all. It’s a distillation of all of the interviews I have done, which makes it quite different from my first two books which touch on my experiences. It’s funny because when you hear a book title like The Art of Selling your Business one might assume I am peddling some superior knowledge, but that’s not what this book is about. The Art of Selling your Business is trying to distill, process, and communicate the best practices of others.
Q: How can advisors and owners utilize The Art of Selling Your Business?
A: There are two extras that people have access to. One is the workbook which is intended to be completed by the owner as they work through reading the book. It is designed to be an accompanying piece of content for people reading the book. The second document called the Mastermind Discussion Guide is for exit planners who want to use the book with their clients. It is a set of questions that the CEPA can ask their clients in order to start a conversation with the owner.
Business owners drag their feet when it comes to exit planning. They put it off, and they procrastinate. I think The Art of Selling Your Business as a book is a way to open the back door of their mind into exit planning. I think if you walk up to a business owner and ask, “Hey, have you thought about writing an exit plan?”, nine out of ten will roll their eyes and say “no, I’m too busy running my company.” The book is a way to get a business owner to start thinking about the long-term strategic plan they have for their company without being overly academic. It’s a way to get business owners to think that exit planning is something that they can and should be doing.
Free Webinar: A New Way to Get Business Owners to Think About Exit Planning
Join EPI and The Value Builder System TM on February 22nd from 11:00 AM – 12:00 PM EST for a Webinar between Scott Snider and John Warrillow. They will discuss how The Art of Selling Your Business can help a CEPA begin the Exit Planning conversation with a business owner and how to build value in your business.
As a part of the eight-year partnership between Value Builder and EPI, all CEPAs who attend this webinar will receive a complimentary copy of the Mastermind Discussion Guide. This Guide is usually only provided to those who purchase 10 or more copies of The Art of Selling Your Business.