Making Your Business Attractive to Buyers with Lana Hout – 020

Buying or selling a business? It could be your next strategic move in this Covid environment.

Check out my interview with Lana Hout. She is a broker agent at First Choice Business Brokers.

She’s the real deal. One smart cookie!

Our podcasts are interviews between Justin Krane, Krane Financial Solution’s President, and various professionals, one or more of which are or have been Krane Financial Solutions clients. However, nothing stated within the podcasts should be considered a testimonial or endorsement of Krane Financial Solutions or Justin Krane, and the professionals have not been directly or indirectly compensated for being interviewed.

Lana Hout is a business broker agent with First Choice Business Brokers, Los Angeles. Lana graduated summa cum laude from the University of Southern California’s Marshall School of Business with a degree in Business Administration and concentrations in Finance and Marketing. Prior to launching the First Choice Business Brokers office in Los Angeles, Lana gained experience in business valuation and business development at top global firms including Duff & Phelps, Deloitte & Touche and NBCUniversal, with an emphasis in the media and entertainment sector. Her experience, which includes transaction advisory, financial analysis, and corporate strategy, gives her the skills necessary to effectively sell your business. Lana is motivated, intelligent and committed to results.
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Making Your Business Attractive

Build your business in a way that it’s going to be marketable.
This means including infrastructure in the business so it’s able to run without you.
Make sure you are not your business.
Have clean and clear financials – hire a bookkeeper or accountant to keep track of this.
If your business cannot function without you – how are you going to sell it to someone else?
Make sure you are spending your time on the things that offer a return value.
Include what you pay yourself – this is key to letting someone know there is a line item for this.

Knowing What Your Business is Worth

Lana works with business owners to create a market valuation to sell their business.
Market valuations are typically given in a range.
She looks at all expenses and then removes personal ones.
She then considers – Do they have customer concentration? Do they have growth opportunities? Do they have the infrastructure?
And then looking at the cash flow number and multiplying it by, generally two to three times.

Selling Your Business

One thing you can do to ensure that things go your way is to plan and do not wait until the last minute to create this plan.
Talk to someone who can give you the value of your company and figure out what you need to do to make it more sellable.
Speaking with a professional gives you time to correct issues and make your business more attractive to potential buyers.
People are going to buy your business based on your performance today. Not yesterday, and not tomorrow.
Know when it’s time to sell. If the market were to go down and your business was to go into a recession, would you be willing to work the next 10 years to build it back up to then sell it? If the answer is no, then you should sell it.

Best Quotes:

“If you can’t bet on yourself, then there’s not really much to bet on.” (4:35)

“Because if your business can’t run without you, how can you sell it to somebody else?” (6:59)

“When you go into being a business owner, the goal is freedom and the ability to do what you want.” (19:31)

“There’s always ups, downs, twists and surprises. I mean nothing goes exactly the way you think it’s going to go. And the one thing that you can do to help ensure that it goes more your way than not is by planning.” (27:17)

“People buy your business based off of your performance today. Not yesterday, and not tomorrow.” (29:32)

“Blood, sweat and tears doesn’t equal the price of your business and what you owe doesn’t equal the price of your business.” (30:20)

“If the market were to go down and your business was to go into a recession, would you be willing to work the next 10 more years to build it back up to then sell it? And if your answer is no longer, I’m not willing to go through another recession and then have to build it on up, then you should sell.” (34:01)