Leslie's 5 Big Growth Tips from the "Bare" Billionaire

Last week I had the privilege of meeting Leslie Blodgett, CEO of the billion dollar cosmetic empire Bare Escentuals, at our monthly NAWBO San Francisco dinner series and hearing her journey about how she grew the business, grew a son, kept her marriage intact and eventually sold the company for $1.7 billion. Yes, BILLION with a B!! 

 Of course I was thinking about all of you the entire time and made sure to note her biggest take-ways, so here are the best golden nuggets she shared to grow (and sell!) the business of your dreams: 

1. Be a rebel. 
Bare Escentuals’ primary product was a mineral based foundation to make the skin look smooth and even. At the time, popular foundations were liquid based, cakey and thick. Her product was a loose powder, light and silky. Even though her product was superior in many ways, the market was used to liquid and when she was told it would never sell, her inner rebel told her to keep going… all the way to the bank! She also bucked conventional wisdom when she started selling her products on QVC and infomercials instead of at cosmetic counters. Powdered foundation sold over TV where you can’t even test it? You betcha! In fact,a year's worth of in-store sales in less than an 1 hour, and the rest is history! 

2. Let the community build it. 
Once the company started getting traction with sales, Leslie started spending time in online forums where customers were talking about the products (think old school Facebook). She would literally stay up all night answering questions, getting feedback and new product ideas. Over time, the forums and message boards became so integral, she started naming products after top contributors or adding items based directly from their suggestions. Talk about crowdsourcing! At Bare Escentuals, customers had a real voice in creating products that they wanted and loved, and ultimately became raving fans, evangelists and loyal buyers of the everything the brand offered. 

3. Create a BFF experience. 
Once the online community had taken on a life of its own, she decided it was time to take the relationships offline and so they went on Lady Gaga’s tour bus (literally, it was Lady Gaga’s she said!) all around the country meeting their online community in person. It created an amazing experience for everyone involved resulting in what she called the “BFF experience”, when all of your customers feel like BFFs (best friends forever) of the company and each other. Pretty darn awesome. 

4. Distribution channels sell stuff faster. 
As I shared earlier, selling on QVC was her real tipping point. Bare Escentuals was a small bath and body company with 6 stores in 1994, and now has over 6,500 distribution channels – their own stores, retailers, and online – which are in essence thousands of salespeople offering their products 24/7. To grow big, you have to have multiple distribution channels – not just your own website. Hmm, think about it. Where else can you offer your products and services? 

5. Focus more on doing than planning. 
Leslie admits that now when people ask her for advice, she always tells them that they need a great plan, but confessed to us that she actually never did! She said that she was just passionately and tirelessly focused on DOING. Doing sales calls, doing customer interviews, doing product development. And as much as I love strategic planning, I have to agree! DOING, or executing, almost always trumps planning as long as you at least have a clear vision about why you are doing all that doing!

The entire evening was beyond amazing, but hands down, my favorite A Ha moment was definitely about letting the community build it. As an expert, there can be a lot of pressure to always create the right content or have the best answer, when sometimes, it’s just as valuable or even more valuable to listen and source ideas from your community – aka “there’s wisdom in the group”. 

Just this week I was on a call with a member of my Accelerate! online training and community for women entrepreneurs, and she was asking for my feedback on a book that she is thinking about writing. I was happy to share my personal experience and then at some point it dawned on me to ask her if she would like me a to create a new training module about how to write and self-publish a non-fiction book that becomes an Amazon bestseller, and she responded, "absolutely!" Each month I add 4 new modules (foundation, marketing, sales and money), so adding to the existing 25 modules with exactly what the community wants makes my heart sing! 

In fact, I would love to get you involved too! Post in the comments below the subject you would like me to create a module around (each 15 minute intensive module has an ebook, audio and printable download), and I will select the most popular request, create it for August, and share it with all of you as my gift! Also be sure to share your inner rebel stories like Leslie Blodgett’s below to get everyone fired up and on their billion dollar path (why not you too?!?), along with the module you want to see, and I can’t wait to create it for you! 

As always, until next time...

Be Profitable & Be WELL! 

 XO, jgw

P.S. This Friday is the last day to sign up for SUMMER SUCCESS: Designed, Developed & Done, my private and customized program to make sure you have both a fun AND productive summer, and finish that pressing product, workshop, book or new business that you want to do but need someone to help you get it out of your head and into the world! Yay! To learn more and even watch the video again, click here.  
Friday is it, so if you’re on the fence… JUMP! And I’ll always be there to catch you! xoxo

The Lease is the Killer

Catch my quote in BloombergBusinessweek today at http://ow.ly/kzHSL so you can be sure to avoid this situation (and I don't mean a bad hair day lol!).

Advice from a UC Davis Alum: Don't Pepper Spray Your Buyers!

The national pepper spray incident at UC Davis has really hit home with me.You may or may not know this, but in addition to graduating from UC Davis in 1987, I also grew up in Davis, CA.  To add another layer, I'm also a wife of a police sargent (also a UC Davis Grad), so I understand that police are in a pressure cooker during a protest situation, but as a Davis Girl and Grad, this national black eye is really, really painful.  After reading more about the purpose of pepper spray, I learned that its primary use is to "handle unruly persons", which triggered my thinking about business sellers negotiating with potential buyers on the sale of their company.

If you are thinking about selling your business in 2012, whatever you do, don't metaphorically spray your best buyers with pepper spray!

Specifically, during negotiations, many sellers automatically take an aggressive position and assume that a buyer is trying to take advantage of them.  While this may be true at times, the majority of  buyers are seeking a win-win outcome because their bigger goal is to ensure that the business continues to be successful after the sale.

To make sure your don't douse your deal with cayenne pepper, keep in mind these 3 important tips:

1. Know the market value of your company.
Use my Back-of-the-Envelope Valuation Worksheet (register at ExitJourney.com for your free download), so you can approach the price negotiation from a knowledgeable position, not an emotional position.

2. Make a list of your non-negotiable deal terms.
Know and protect what's most important you, but be flexible on other terms that may be very important to the buyer.

3. Be transparent with the buyer, beginning with your reason for selling.
If you are open and forthcoming with information, you will set the buyer at ease and reduce their concerns right from the start.

Just like big cultural shifts in our world, selling a business will always be a stressful time. However, if you approach the negotiation standing in the other parties' shoes, the transaction is more likely to unfold positively and the training period after the closing will be a time of excitement for all about the what's to come.

I'm Julie Gordon White, Certified Business Broker, Amazon Business Best Selling Author of "EXIT! 12 Steps to Sell Your Business for the Price You Deserve" (and proud UC Davis Grad!), signing off until next time! For more videos, tips and tools, visit http://www.exitjourney.com/.

PriceMaxPointer: Never share confidential documents with a buyer without having their signed NDA and personal financial statement in hand.

PriceMaxPointer: Don't let your landlord kill your deal. Agree IN ADVANCE on terms for 10+ years (don't sign anything!) and you'll be set.

PriceMaxPointer: Earnouts (down payment plus a % based on success after closing) can be tricky but beneficial for all www.ExitJourney.com

PriceMaxPointer: Interest rates are low, low, low and banks WILL lend to your buyer if your sales are flat or growing! #exitjourney

PriceMaxPointer: When your business is on the market, revenues must hold steady or grow. Decling sales usually leads to disappointment.

Today's Tadaaa! > Don't just sell to a market segment, sell to those most likely to buy NOW within that market segment. Agree?

5/24/11: VIDEO of the WEEK Broker's Secret #1

Broker's Secret #1: Competitor Calling! from Julie Gordon White on Vimeo.

Hi there! This is Julie Gordon White, certified business broker. After working with hundreds of business sellers and business buyers over the last 10 years, I had no choice but to write my forthcoming book, EXIT! 12 Steps to Sell Your Business for the Price You Deserve. Before my important book releases in the fall, I want to give you a quick peek at the 27 Broker’s Secrets that I included in the book, so today we are going to talk about Broker’s Secret # 1, Competitor Calling!

If a competitor calls with interest in buying your business, DO NOT share confidential information without having a Non-Disclosure agreement signed and having a transaction attorney, business broker and account engaged!

Again, that’s Broker’s Secret #1, Competitor Calling!

In closing, congratulations for taking the time to listen in and avoid many of the costly mistakes that business owners make when they wait too long to plan for the sale of their business. For more videos, tips and tools, visit www.ExitJourney.com.

This is Julie Gordon White, and remember, Your Exit Journey Began the Day You Started Your Business.

Take care and I’ll talk to you soon!

www.ExitJourney.com

Acquisition activity is really heating up... Who is your ideal acquirer?

"Agreements prevent disagreements." Great advice from Brad Warren during negotiations workshop at www.cabb.org.

How Long is Too Long to Get Your Deal Done?

Excellent post by Fred Wilson at www.avc.com. Visit Fred's blog and click on About (and join his list too- I did). I love what he says about growing companies and growing 3 kids- of course :)... Enjoy!

M&A Issues: Timing

Yet another post in the M&A Issues series. This one is about timing, ie how long it should take from the first serious conversation about a sale transaction until the closing.

I've seen acquisitions done in a week. I've seen acquisitions take over a year from the first serious conversation to close. And one thing I know for sure, if a buyer wants to take their time and feels like they can get away with it, they will.

Not every buyer wants to take their time. Many buyers want the transaction closed as soon as possible. In that case, the seller has alignment with the buyer and the transaction closes quickly.

Sellers usually want a quick close. They should. Selling your business is distracting and fraught with risk. One you decide you are going to sell, you should move with as much speed as you can while being diligent, thorough, and reasonable.

Six weeks from serious conversation to close is fast. If the company is "clean" and the buyer is incented to do a quick close and there are no governmental approves, it can be done.

Anything over three months is too long. The sale process starts to hang over the company and impacts the team, the business, and can lead to lasting problems. Team members get antsy. Resumes hit the street. Customers hear rumors and start thinking about plan B. The senior team loses focus. The company suffers.

If there are reasons why a close is going to take a long time (governmental approvals, buyer approvals, diligence, etc) an approach you can take is to sign a defintive agreement which obligates both sides to close and provides remedies if the close does not happen (including breakup fees). This is often the way deals are done with public companies that require shareholder approval.

Another key issue related to timing is the news leaking out. The longer the process goes on, the more likely the news will leak out. The reality is most deals leak and it rarely gets in the way of a deal getting done. Buyers hate it when the news leaks out because it can bring additional buyers into the process and make it more competitive. But most sellers should prefer a quiet process too. The less chatter about the sale, the better in my opinion.

I'm a fan of quick M&A processes, within reason. It takes time to do the required diligence and legal work. Doing a deal in a day is generally not a good idea. Doing it in six weeks is desirable and should be the goal. Anything longer than three months is likely to be problematic and will require a ton of management effort to manage the fallout. If you are a seller, you should specifiy the time to closing in the LOI and do everything in your power to make the buyer meet that deadline. And if you are buyer, you should respect the seller's desire for a quick close and work hard to make it happen on your end.

This is critical to survive and thrive >> RT @WSJSmallBiz: Small businesses negotiate lower commercial-lease rates http://on.wsj.com/hAxCji

What's Your Selling Story?

With the planned sale of your business, your reason for selling will be one of the most important “trust factors” created to reach agreement with a potential buyer. Selling your business to an outside buyer begins with a courtship. Don’t ask to get married on the first date, and never, ever lie about why you want to get to know them better! These exit options are the most common reasons for selling a business to a third party, listed in order of highest credibility:

Retirement
This is THE very best reason for selling! If you are of retirement age, a buyer will more readily accept that you are selling so you can start enjoying the next phase of your life- not just hiding from problems in the business such as the loss of a customer or key employee.

Health Issues
Health issues are another legitimate reason to sell. You don’t have to divulge all of the details of your personal health situation, but the more forthcoming you are, the greater likelihood that the buyer will believe your reason for your selling along with other critical aspects of the sale.

Death
Death of an owner or partner is a very unfortunate but legitimate reason for a sale.

Divorce / Partner Disputes
Divorce and/or partnership disputes are also legitimate reasons for a sale as long as they legitimately affect your ability to operate the business. If you site this as your reason for sale, make sure you have a good story to tell (and don’t mind telling it).

Loss of Market Share
Be honest about declining sales, because in a challenging economy, you can! Be forthcoming with information, share the down and dirty details and be prepared to present the plan to help the new buyer grow again as the economy rebounds. Also, be prepared to participate in the financing (promissory note or an earnout) to reap the upside benefits (more on promissory notes and earnouts later).

So to recap, make sure your reason for selling is legitimate and your “selling story” is practiced. Answering the “reason for selling question” honestly and convincingly will set the stage for an open and friction-free negotiation.

The above is an excerpt from the soon to be released book “EXIT! 12 Steps to Sell Your Business for the Price You Deserve” by Julie Gordon White.  Julie is a Certified Business Broker, Author, Speaker, Wife, Mom and Marathoner.  Julie lives in the San Francisco Bay area and has been quoted in major media outlets such as the New York Times, Wall Street Journal, Inc. Magazine and the San Francisco Chronicle. 

Sweet EXIT! strategy> RT @IncMagazine: Bought by @CocaCola, @HonestTea co-founder Seth Goldman will keep his job & name...http://ow.ly/3XOKT

The Benefits of A Planned Sale of Your Business

As a business owner, you deserve to achieve the highest market price for your company. Begin planning your exit strategy with the same amount of thought and detail that you plan your customer service strategy or craft your marketing plan. By doing so, you will be able to walk away from your company knowing that you created something bigger than yourself and have the financial stability to provide for the next stage of your life. Creating and implementing an exit strategy for your business can be the difference between taking a long vacation or retiring in the lap of luxury after the closing!

A planned sale allows for an owner’s financial goals, objectives, and timetable to be achieved and not at the mercy of the buyers financial goals, objectives and timetable. A planned sale also allows you the opportunity to seek multiple potential buyers in the open market who will often pay a higher price than competitors or employees who don’t feel they should pay for infrastructure they already have or helped build.


Lastly, with a planned sale, you have time to understand the strengths, weaknesses, opportunities and threats of your company and make changes accordingly with the goal of significantly increasing the final selling price.

The above is an excerpt from the soon to be released book “EXIT! 12 Steps to Sell Your Business for the Price You Deserve” by Julie Gordon White. Julie is a Certified Business Broker, Author, Speaker, Wife, Mom and Marathoner. Julie lives in the San Francisco Bay area and has been quoted in major media outlets such as the New York Times, Wall Street Journal, Inc. Magazine and the San Francisco Chronicle.

Buy/Sell meetings flow smoothly when the goals of both buyer and seller are closely aligned. Ask questions and listen with both ears.

What would you do if you bought your business today and knew it was under performing? AND, how much would you pay yourself for it? Hmmm...

PATIENCE is the name of the game when selling a business. Both parties need time to become mentally ready. Rushing may = a change of <3.