Most entrepreneurs’ exit strategy is selling their business. But how do you sell your business at the best price? Mark Woodbury is the Managing Director at Raincatcher, helping entrepreneurs buy and sell remarkable companies. Today, he joins Bob Roark to break down the process behind how they help clients get maximum value for their businesses. He shares mistakes to avoid and things to prepare when you’re planning to exit and sell your business. Tune in for valuable insight on how to make your life’s work sellable!

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How To Sell Your Online Or SaaS Business At Maximum Value With Mark Woodbury

The big questions are, “How do business owners like us spend our own money, time and effort? How do we grow our business and jump the line that lets us accelerate the delivery of our products and services while being smart about our growth, profits, culture, instilling increased value in our business?” Those are the questions in this episode. We will share some of the answers.

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Our guest is Mark Woodbury. He's a Managing Director of Raincatcher. Mark, welcome to the show.

I appreciate you having me on.

I appreciate your time. Tell us a bit of you and what got you from there to here?

My background was in finance and I have worked in finance as my first job out of school. I always had an itch for a little bit more independence and less rigidity than I had. Since this is my first job, there is supposed to be some rigidity and you have to earn your stripes a little bit. I learned a ton. I liked what I was doing but I had an itch towards self-employment. They say, “Necessity is the mother of invention,” meaning if you want to start a business and you don't have any money, you better figure out how to start a business with no money. For me, that was learning the digital space.

It was a very low barrier to entry to do business online, to build websites as a service. At that point, start a website, get into eCommerce with very low customer acquisition costs. That's what I did. I dabbled around online and figured things out the hard way. Initially, I taught myself a lot of hard lessons. I stumbled and fell many times but this was nights and weekends for a while and I ended up having some success.

I was at the right place and at the right time. That was an easier time to get into eCommerce. It's much more competitive now. There are a lot of software that has decreased the barrier to entry even further. There are probably 10, 20 times as many merchants online competing for the same ad space as when I’ve got into it.

I’ve got in and got my feet wet into self-employment. I learned the hard way about keeping your books and quarterly estimated taxes. I learned that lesson the hard way. Plenty of stumbles, as you have seen with yourself or potentially your clients. I ultimately ended up selling that. I didn't know what my next venture would be until I sold that company. Throughout the sales process, that's where I learned, “This is what I want to do.” I have done consulting at other firms before. I wanted to do consulting and eCommerce. I wanted to do consulting for some supply chains and logistics.

It didn't ring a bell but when I sold my company, I realized this is what this person does. They understand the M&A process and know who all the key players are. It's a lucrative space to be. It provides value. It's fun. It's very goal-oriented. I'm not racking up hours on somebody else's bill. I'm working for free most of the time until I close something. That's how I’ve got into the business brokerage space. I started at my own company with a partner and we had a couple of employees. After a few years, he and I split off. He went to work with his wife on her business.

Fortunately, I met the folks at Raincatcher, which is the firm you are familiar with and the group I'm at. It has been a great transition. I still have the flexibility. Somebody sets their schedule and I run my division. I also have the scale of a large company with processes and made many of the same mistakes that I was making. I have learned a lot of lessons the hard way and now I don't have to learn the hard way. I'm a part of a much larger organization. We are an Inc. 5,000 company. We are one of the larger business brokerage companies in the US.

You were talking about your eCommerce company. What niche did you finally land on?

We ended up dropshipping equipment. This is still done now but to a lesser extent. You make a sale, and then you turn around and buy that product from the supplier, the manufacturer. We used primarily woodworking equipment but we had metalworking. We had desks and tables as well. We branched out. This is before Wayfair and Houzz. There were some furniture elements to it but we also had equipment. This was before the major equipment dealers had a large online footprint. My partner and I at the time had figured out online marketing before many of the major companies with larger budgets than we had. We sold equipment primarily online.

I'm trying to match what you learned in college and your first job with what you were doing. What did your degree prepare you to do as far as it goes with this?

[caption id="attachment_5942" align="aligncenter" width="600"] Sell Your Business: The best lessons have come from stumbling and failing.[/caption]

 

I learned the basics of accounting. I learned that relationships matter. That always rang true. I don't know if that's necessarily coursework. That was my life experience. It taught me that. Other than the basics of finance and business management, we scratched the surface of sales and marketing. A lot of it is on-the-job experience. My best lessons have come from stumbling and falling or I have sidestepped maybe some mistakes by observing what other people have done by surrounding myself with people smarter than myself and who have done it before me. That's how I have gravitated to learning as opposed to a textbook per se.

You went from an employee at an investment firm into a digital marketing space-built company where somebody wanted to purchase it from you. You went through the entire transaction journey. In your next step, were you in M&A, in the digital space, as well?

I had a couple of side projects at various times. Some that went well, some that didn't. I am with a friend who sold scrubbing brushes at the end of drills. We sold them on Amazon. That was his business that I supported. At this point, I lived in Los Angeles. I took a consulting role at 20th Century Fox. I have seen behind the hood of the Fortune 100s and how they operate.

I'm much happier in a small business environmental setting. That was a fun role to be around that type of corporate environment and to go to work in a 36 story tower on FOX+ every day. That was fun. That was an eight-month. It was supposed to be 6 months but it lasted 8 or 10. We had one project that kept on dragging on. The problem carries on.

I had some different ventures in that time before I’ve got into brokerage. I had the itch to be self-employed the whole time again. Maybe not the masochist of learning all the same problems over. I didn't want to get back into eCommerce and navigate the supply chain. I thought M&A and being a broker would be a good space, and it was but I had plenty of problems that I had still yet to solve and had a slow start in the brokered space. In my first few listings, I thought I knew what I was doing and it turned out that I didn't know so much.

This is a lot harder than I thought it was going to be. The buyers don't come flocking to each deal that I have. That was an issue. I didn't have a great amount of success in my first year in that business. It took a while to start getting some closes under the belt and that learning curve flattened out as it does in any other career and I started getting a pretty good hold of it.

I think about how you grew up as a kid and you hear about people that take a job or get into a profession, and then he stayed there their entire lives. You think about the folks that take your route. If you had kids, how do you encourage your kids to be an entrepreneur? What did you do to foster or point you toward this direction?

[bctt tweet="You sidestep some mistakes by observing what other people have done, by surrounding yourself with people smarter than yourself and people who have done it before you." username=""]

They think I'm crazy for going in this direction. They have the steadiest careers as you can imagine. My dad worked for the government. He worked for the Social Security Administration. He took a job with them when he got out of college, and then took any promotion he could get. He worked in Guam to take a promotion with him. He moved to Los Angeles and that's how he and my mom met.

She was a financial analyst in the Social Security Administration. They both worked for the government, which is as steady as it gets. Meanwhile, their youngest doesn't want anything to do with a steady career, would rather learn things the hard way and do it himself. I guess you could say I'm hard-headed but it works for me.

In the Rich Dad Poor Dad series, Kiyosaki talks about the quadrants and so on. You think about the folks