Today I'm going to share with you the secret sauce. I'm taking you behind the scenes to demonstrate how you can get more money from your business than anybody else in your industry. That's right, I'm sharing with you a competitive advantage so that you can market your business to get the most out of it.

You're going to position your business as a strategic acquisition and you're going to do three specific things in order to make this happen. The first thing you're going to do is you're going to identify who's going to benefit most from owning you, whether it's a competitor, a supplier, even a customer. The second thing you're going to do is you're going to highlight your unique assets.

Maybe it's increasing market share, maybe it's the recurring customers that you have that can buy something that an existing business already has, or maybe it's intellectual property that's impossible to replicate. The third thing you're going to do is you're going to show buyers what they gain if they buy you, and it's not just about money in their pocket today, it's about money in the future with reduced risk. These are the three things strategic buyers look for when they're acquiring a business.

Most business owners make the mistake of simply looking for a buyer to acquire them based on whoever has money. There's two types of buyers that are out there that could potentially purchase your business. The first is a financial buyer.

This is an investor or this is a private equity fund. They're going to want a fantastic return on their investment, and in a lot of cases they're going to want a platform that they can build upon. Now if you're marketing to a financial buyer, you should also highlight the strategic aspects of acquiring you, and this takes us to the second type of buyer, a strategic buyer.

These are competitors or suppliers or distributors. These people will pay premiums because you're going to help them accelerate their own growth with reduced risk. It's always better for you to prepare your business as a strategic acquisition because even financial buyers will pay for strategic acquisitions because they can use you as a platform to build upon.

So let's talk about how you can identify strategic buyers. The first part of identifying strategic buyers is looking at your competitors. Your competitors are going to love your business because you help them increase market share.

The second group of people that you want to look to sell your business to are suppliers. You might be able to give them control of an entire distribution channel. Your suppliers will want to have a way to get their product into the hands of the end customer, and that's your business.

Great strategy for a strategic acquisition. The third is customers, and customers might want to acquire you so that they don't have to pay a premium so that they can cut out the middleman and they can take profit to the bottom line. I'll give you an example.

A small logistics company was acquired by a supplier who wanted to integrate the supply chain. This logistics company was able to sell at a huge premium. They sold at a 50% premium compared to other logistics companies out there.

Why? Because the people who bought them, the supplier who bought them, wanted to control the entire supply chain end to end. That was the missing piece. They needed it dearly.

It was worth paying the premium. Okay, let's talk about highlighting your unique assets. Market share, customer relationships, proprietary technology, distribution channels, all of these things are difficult, if not impossible, to replicate.

Buyers pay for these assets because they don't want to build them themselves. Maybe they don't have the time. Maybe they don't have the expertise.

Maybe they just want a shortcut. A family food business had regional dominance in grocery chains. A national competitor paid twice the normal multiple just to enter that market, but they were able to enter the market overnight.

What did this do? It saved them time and effort for negotiating shelf space and potentially paying for that shelf space. The family food business that they purchased already had shelf space in that region. They shortcutted the process.

It was worth the amount of money they paid. All right, the third element of this is showing growth in the potential buyer's hands. Frame your company as a growth accelerator for the buyer.

Translate your strengths into what they unlock for the acquirer. A software company didn't just show revenue. It showed how the buyer's existing clients would adopt it, doubling the buyer's annual recurring revenue in 12 months.

Show your potential acquisition partner that you can double their annual recurring revenue, that you can add more money into their pocket immediately, and you will move to the front of the line when it comes to acquisitions. If you don't position yourself as strategic, buyers are going to treat you as just another business. They're going to treat you like a commodity.

When you are a strategic acquisition, you stand the model on its head. You flip the whole thing over. This means they'll pay a premium for your business and not just what the standard multiple is.

So often, if you go to a business broker and you say, what's my business worth? The broker will do a really good business valuation of your business, and they're going to compare your business to other businesses that have sold in the region, in the market, in the industry. And if you don't have any strategic advantage over these other businesses, you're going to get what everybody else got. If you position yourself as a strategic acquisition and all the competitors, all the suppliers, all the customers know what your advantages are, you immediately move to the front of the line.

You're somebody that can command an auction and people will pay a premium for. If buyers want to compete for your business, you are the one who is going to win. Don't sell your family business until you call us.

This is what we specialize in. We will create an auction. We will create a feeding frenzy for your business.

We'll do it over an 18-month window. And while we're doing that, you'll make more money than you ever dreamed possible. That's our value proposition.

We double your profit over the course of 18 months, which increases the value of your business and makes you the preferred choice in your market. My name is Dave Lorenzo. This is the Inside BS Show.

We'll see you back here again tomorrow with another edition of our show.