A bit about my guest on today’s episode
Gavin is a business investor and business growth mentor, a specialist in driving growth organically and through acquisition.
He works with business owners looking to retire and, as an ethical investor, agree on a way for them to retire, their legacy to be maintained and developed and their employees to continue.
Where there is a 2 -3 year runway to exit/retiring he focuses on 3 stages buy companies with a strategic fit, build the efficiencies, profitability and balance sheet of the group and build relationships creating opportunities to sell.
What we will be discussing today
- Offering contingency fees based on the percentage of growth
- How to improve your skills with buying and scaling businesses
- How business coaching improves this
Listen to the Full Episode
To Acquire or To Be Acquired?
In this episode of The Fearless Business Podcast, host Robin Waite talks to the business investor and growth mentor Gavin Preston. Here, he gives listeners his advice on successfully scaling businesses and also exiting them.
Gavin typically helps businesses with a five-hundred thousand turnover to five million when working as a growth mentor. He comes in at a point where the businesses are successful, but the owners have either decided that they want to scale their business further or sell them. Typically, the entrepreneur’s business has plateaued by this point, and they want to increase their success further. From this, Gavin helps his clients identify a clear exit goal and allows them to strategise on how to get there.
With his clients, if they struggle with the cost Gavin has outlined to them, he negotiates with what he calls a contingency fee. The contingency fee he uses is based on the value of the outcomes he provides. He uses a tool to help him identify the value of his services and how much they are worth and provides a rate based on the main services they are interested in.
Gavin can simultaneously highlight the value of his services while securing the sales with his clients by having two payment plants, both upfront and contingency.
Adapting Your Mindset to Scale
According to Gavin, if you want to scale and exit your business successfully, you have to put just as much emphasis on honing your mindset. Most entrepreneurs are more than competent with business strategy but less so in their own self-belief. Ultimately, if you don’t believe in your long term goals, how can you be driven enough to achieve them?
Looking at the bigger picture helps business owners when it comes to successfully scaling their business and their staff. When it comes to staff management, Gary recommends not to be solely invested in key performance indicators but instead implement a long term objective that your staff should be aiming towards.
Optimising Your Product For Scaling and Exiting
First of all, if you want to optimise your product/ service and scale your business further, you must focus your efforts on the customer.
CLV / Customer lifetime value is a term for customers who reinvest in your services. Not only do they come back and provide business owners with immediate monetary value, but they are also clear advocates of the business and provide just as much in referrals and trust.
According to Gavin, this is why it is essential to have a few funnels to help re-engage customers. Not only do the multiple lead magnets attract both new and old clients, but it optimises exit value. When selling the business, buyers are looking for the potential to expand or build upon the products that are already in place; the more that are working, the better.
Preparing Your Business Exit
Before you sell your business, Gavin recommends that you have at least three years worth of “good accounts”. Most definitely, this means that you have to pre-plan before even considering exiting.
To achieve three consecutive years, entrepreneurs will have to compromise their lifestyles. What may seem like a quick payout now may impact the long-term value of their business. This, again, is where looking at the bigger picture is integral. Don’t take out huge sums of money for yourself as you’ll be paying for it in value in years to come.
Business owners must also prepare themselves mentally for their exit. To help his clients do this, Gavin sets out a route map of what might happen and the feelings that may occur. It’s easy to fall into the mentality that more significant business means better business. But, just because you have successfully scaled your business does not mean problems aren’t going to arise. They are just going to present themselves in different forms. What ends up being worthwhile are the lessons learnt throughout the hard times, which in time will make you indestructible when it comes to running your business.
Check out Gavins Book “Survive and Thrive”
Listen to The Business Mastermind Podcast
How to Get Hold of Gavin
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