How to Build a Business You Can Sell
SmallBizLady: What selling trends do you foresee with business owners who were hit hard during COVID? Post-COVID?
John Warrillow: The biggest impact COVID has had on the small business market is an increased appetite to sell. Where traditionally businesses have been passed down from one generation to the next, 56% of business owners now say they plan to sell their business to a third party. According to our research, they’ve also moved up their “sell by” date by 20%.
SmallBizLady: What’s the best way to gain leverage when negotiating with a giant?
John Warrillow: When a small business owner sells his or her company, it’s usually a David and Goliath battle, so punching above your weight is critical. The secret to gaining leverage over an acquirer is to attract multiple offers, which I lay out a formula for doing in my new book, The Art of Selling Your Business.
SmallBizLady: What are the evil tricks Fortune 500 giants and private equity groups use to prey on inexperienced owners try to sell their business?
John Warrillow: The dirtiest trick used by acquirers is called re-trading. The acquirer gets you to agree to a non-binding letter of intent where they offer a price for your company. They also include a “no-shop clause” which means that the seller must suspend negotiating with other potential acquirers. With other buyers sidelined, the acquirer knows the owner has given up negotiating leverage by signing the “no shop clause” and drops their offer agreed to in the letter of intent.
How to Better Manage Cashflow in a Small Business
SmallBizLady: What is Plastiq?
Eliot Buchanan: Plastiq is the intelligent payments solutions provider – the smarter way to pay and get paid. We help businesses use the credit they already have to pay virtually any bill, even at places that don’t accept credit cards. On the other side, savvy businesses use and promote Plastiq as a way to receive payments for free, giving more choice and convenience to their customers. Plastiq empowers small business leaders to grow faster and more confidently and has signed up more than 1.5 million clients, processing billions in payments for a wide range of expenses, from business supplier payments to contractors, taxes, and rent. The platform allows owners to better manage their cash flow and save thousands of dollars in time spent on making or tracking payments across disparate tools and services.
SmallBizLady: Why do small businesses need a solution like Plastiq?
Eliot Buchanan: A majority of SMBs worldwide (61%) struggle with cash flow and only about half of all small businesses survive five years or longer. A major inhibitor to SMBs acquiring working capital is access to credit, with 27% of SMBs claiming they can’t access the capital they need. Compounding the problem, big banks only approve 23% of funding requests. Plastiq is filling a critical gap by bridging credit access and payables and is becoming the leading working capital solution for small businesses. Plastiq has revolutionized how its more than 1.5 million SMB and other customers optimize working capital by enabling them to pay or accept payments for anything with a credit card, even where credit cards are not accepted. Plastiq empowers businesses to pay or be paid any way they want, including checks, wire transfers, and ACH transfers.
When businesses use Plastiq Accept, there are no merchant fees for them to accept payments, and their customers are given an easy link to make their payment and only have to pay a convenience Plastiq fee to use their standard credit card or debit card. There is no fee if they opt for ACH cash transfer. Plastiq also just announced integration with Intuit QuickBooks. The integration helps businesses save time and money with an even more seamless, automated way to reconcile payments, bills, and invoices with their accounting system with no manual entry required.
SmallBizLady: Tax season is coming up soon. How can Plastiq help small businesses balance tax due dates with ongoing business expenses such as employee payroll and supply purchases?
Eliot Buchanan: By funding ongoing business expenses and taxes through Plastiq and keeping track of finances, businesses can balance how much cash they need to keep on hand for unexpected expenses and even make decisions on how to grow the business when taxes are due. The Plastiq fee is even tax-deductible.
With Plastiq, you can choose the best way to pay from the platform depending on how much cash you want to keep on hand, whether that’s by debit or credit card or ACH cash payments from a linked bank account. Plastiq tracks all your transactions and syncs them with your QuickBooks online.
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