The Art of Selling Your Business: Maximise Value and Avoid Earn-Out Traps | John Warrillow

Send us Fan MailThe headline sale price means very little if much of the money is locked inside an earn-out you may never receive.In this episode, Peter Boolkah speaks with John Warrillow, author of The Art of Selling Your Business, about preparing for an exit, attracting strategic buyers and negotiating a sale that properly rewards the owner.John explains why some ordinary-looking businesses sell for extraordinary multiples while others, despite generating considerably more revenue, struggle to attract serious offers.Using real business-sale examples, Peter and John explore:The difference between a financial buyer and a strategic buyerWhy a business may be worth substantially more in an acquirer’s handsHow Breedlove & Associates turned approximately $9 million in revenue into a sale worth around $54 millionWhy owners should avoid placing an artificial ceiling on their company’s valueHow long a properly planned business exit can really takeWhy exit preparation should begin years before the intended saleHow pre-diligence demonstrates that an owner is genuinely ready to sellWhy eliminating founder dependency can reduce earn-out requirementsThe danger of accepting too much of the sale price as contingent considerationHow Xero founder Rod Drury lost a potential $20 million earn-outWhy earn-out targets should be tied to something the seller can controlHow professional preparation can increase both the sale multiple and the upfront paymentPeter and John also challenge the popular idea that selling a business is like handing over a relay baton. In reality, many owners remain tied to the acquirer for years after completion.The less dependent the company is on its founder, the stronger the owner’s negotiating position becomes.If you intend to sell your business one day, the real question is not simply what someone will pay.It is how much you will receive upfront, how much remains at risk and how long you will still be working for the buyer.Originally recorded in 2021. References to the pandemic and a forthcoming webinar reflect the circumstances at the time, but the guidance on exit preparation, strategic buyers and earn-outs remains highly relevant.LEARN MORE FROM JOHN WARRILLOWBuilt to Sell: https://builttosell.com/CONNECT WITH PETER BOOLKAHWebsite: https://www.boolkah.comLinkedIn: https://www.linkedin.com/in/boolkahInstagram: https://www.instagram.com/pboolkah/Facebook: https://www.facebook.com/BoolkahX: https://twitter.com/boolkahABOUT PETER BOOLKAHPeter Boolkah is a business coach, author and speaker who has spent more than 20 years helping business owners build stronger, more valuable businesses that do not depend on them for everything.He is the creator of The Hamster Wheel Trap® and author of Your Business Sucks: Build a Business That Works Without Destroying Your Life.Peter works with founders and leadership teams on the issues that ultimately determine whether a business creates freedom or becomes another job: leadership, founder dependency, people, profit, execution, scaling, exit readiness and enterprise value.His approach is direct, practical and built around one simple question:Do you own the business, or does the business own you?Learn more at https://www.boolkah.com