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Key Idea: Think About Selling from Day One

Host Hattie Bryant discovers that the highest return on investment goes to the owners who are prepared to open their books at the drop of a hat.

Key Question:

A: 

Bob says sell when your tired and Tracy says sell when someone makes a great offer.

Q: Your business is your baby. How do you nurture it through its life cycle?

A: Think strategically. Despite the all-consuming tasks associated with starting a business, some long range planning is definitely in order.

Like all of us, businesses have a life cycle. They are embryonic (remember when you first had that great idea?), are born, grow to maturity (oh, the challenge of those early years!), live the adult life, age, and finally, pass on. If you create a business with a longer life cycle than your planned working period, you'll have something of value to hand over to someone else!

As you build your business, you are creating an annuity. To capitalize on that, you must document, document, document. Start THE BOOK early, just as early as possible! Go to your favorite search engine and do a search for "scrapbooks."

Get the right supplies and do the book right. Include lots of photos, every piece of press you get, every mailer you send. By the way, this is a great way to get a parent, aunt or uncle involved in your efforts. Explain to them the importance of documenting your business' evolution, equip them with the right supplies, and pass on to them all the materials you want in your book.

Think about it

What could you show a buyer today that would impress them enough to give you millions for your business? What should you do to get ready for a buyer? Who could help you with this project?

Clip from: Sell To A Public Company

La Jolla and Dallas: Every day the press reports, especially The Wall Street Journal and Forbes, about how big business acquires small businesses in order to grow.

If you are running a good business and have market share in your industry segment, you should consider preparing for that call or knock on the door, "Can I buy your business?"   In most every episode of this show we explore how and why the founder of a business gets started and how they get over the hurdles. This week we look at how they received a very large check for the fruits of their labor.

Today, we spend time with Tracy Myers and Gary Cantor, the founders of Advertising Arts College, and Bob Orenstein, founder of International Wine Accessories (IWA). Both have completed all eight steps within the business cycle, and they define what it means to "Exit At the Top." You met Bob a couple of years ago when we did his story about starting IWA from the extra bedroom of his townhouse.

Both stories are important.

Gary and Tracy's story is for all of us who are not even thinking about selling, then there comes a knock on the door.  Bob's story is for the rest of us who know that we have created a substantial asset. Bob, however, knew that his "time" was coming. Bob was strategic and spent several years getting ready for the day, and then it took over four years to consummate a deal.

To say the least, every one of us should have an exit strategy.

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International Wine Accessories, Inc. (IWA)

Robert Orenstein, founder

10246 Miller Road
Dallas, TX 75238
2143496097

Visit our web site: http://www.iwawine.com/

Office: 2143496097

Business Classification:
Home products

Year Founded: 1988

Think About Selling from Day One

HATTIE: Hi, I'm HATTIE Bryant. So often television portrays the dark side of business, the underbelly of exploitive behaviors. It seems to be more interesting to Hollywood than stories about creativity, value creation and self-actualization.

Here you found at least one show that is about good people doing good things, creating jobs, creating wealth, and making our world a better place. Business leaders recognize that one way to grow, to increase shareholder value, is to acquire well-run small businesses.

Today you'll meet two small business owners who sold their businesses for millions to publicly traded companies. One was chased, and the other did the chasing, but in the end, both are smiling. Let's find out why.

TRACY MYERS (Co-founder, Advertising Arts College): I wasn't thinking about retiring. I thought, `Oh, I'll work for maybe another 10 years.' And got a phone call.

BOB ORENSTEIN (Founder, International Wine Accessories): It was like being a rat on a treadmill. I was running and running and running, and it was time to figure out, `How do I get off this treadmill?' And there were different ways.

HATTIE: (Voiceover) Tracy Myers and her partner started The Advertising Arts College in La Jolla, California.

TRACY: I'm taking you to our very first location. In 1981, we rented 1,100 square feet in this little center in La Jolla, California.

HATTIE: It's tiny.

TRACY: Tiny, cute little center. And we were here from 1981 until 1984. And we had 60 students in 1,100 square feet when we left. Unidentified Instructor: ...layout where the hands are at.

HATTIE: (Voiceover) The school grew, offering curriculum design to prepare students for a career in advertising. From its first course called the communications career course to becoming a fully accredited private post-secondary for-profit institution granting four-year degrees, the school thrived. Unidentified Instructor: ... every time I hear myself about to say...

HATTIE: In October 2000, The Art Institute, a growing enterprise traded on the Nasdaq, bought the business from the entrepreneurs who had founded it.

TRACY: I think I was in shock at first. I kind of thought someday it would be nice to be able to sell the school, and everybody thinks about an exit strategy. Do I have one? Do I need one? Is there someone to pass this to?

BOB: First thing I'd like you to do is I'd like you to just pick up this glass, roll it a little bit, and try to smell the aroma.

HATTIE: (Voiceover) In 1983, Bob Orenstein started International Wine Accessories in the spare bedroom of his condominium. The delicious business Bob built is a catalog retailer with 450,000 customers who find in these pages what they need and want for the wine lover's lifestyle. BOB: But remember, this is functional also.

HATTIE: (Voiceover) Bob grew the business to over $20 million in sales, and in 2000, he sold to the $5 billion conglomerate the Foster's Group. After the sale, he promised to stay on as president for three years.

BOB: I really didn't know the time was right. I knew that the time was coming, so what I did is I recognized it was going to take a few years to get there. Little did I know that it was going to take 4 1/2 years to get there.
 
 

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