5 Lessons Learned From Serial 7-Figure Sellers How do these entrepreneurs manage to repeatedly sell their companies for $1 million or more? Read on.

By Mark Daoust

Opinions expressed by Entrepreneur contributors are their own.

There are few things less exciting than having your company acquired. We love articles like this one that tell incredible tales of the scrappy entrepreneur who sells to a Fortune 500 company for instant success.

The reality, however, is that most acquisitions happen in a much more mundane way -- if getting a seven-figure payday can be called mundane. There are only so many companies that Marissa Meyer will buy and only so many "acqui-hires" for Google to complete.

Related: Your Company Was Acquired. Now What?

Most acquisitions happen outside of the news. The only people who know about them are the buyer, the seller and their immediate families.

I've been fortunate to be a part of over 600 of these acquisitions in the Internet and online space. I've also been fortunate to see some entrepreneurs who become serial seven-figure sellers -- entrepreneurs who sell more than one business for more than $1 million.

Here are four lessons I've learned about how they build repeat, valuable businesses.

1. They don't limit their potential acquirer.

When we think of having our company acquired, we often think about a competitor buying us out, or a company buying us for strategic reasons. But these type of acquisitions require the right blend of conditions to exist, including:

  • An outside company needs to know that your business would make a good strategic acquisition.
  • This outside company needs to value your company as highly -- or more highly -- than you do.
  • This outside company needs the resources to complete such an acquisition.
  • The timing has to be right.

Entrepreneurs who sell seven-figure companies don't wait for the perfect conditions that may never arrive. They know that there is a much broader market of individuals, small private equity firms and opportunistic buyers ready to move on healthy, growing businesses. So they actively work to position their business for that type of an exit.

2. They plan their exit instead of waiting for it to happen.

Planning your exit strategy can make a significant improvement in the value of your business. When I sold my first company, I took 14 months to get it in a better position for a sale. Those 14 months helped me to realize a 450 percent increase in the the valuation of my company.

The person who bought my first company, however, optimized the business even further. He saw an increase of over 1,055 percent in valuation from when I first had that same business valued.

Optimizing a business for sale isn't necessarily difficult, but it does take time. Many exit strategies can take anywhere from 12 to 18 months to complete.

3. They have clean, verifiable financial records.

One of the most common differences between a business worth $100,000 and $5,000,000 is the state of the financial records. It never ceases to amaze me how many entrepreneurs try to run their businesses with poor financial records.

Clean financials not only help you grow your business, but they also open avenues for acquisitions. Acquirers can obtain bank financing, raise private funds and have confidence in the metrics of your business before betting millions on the acquisition.

Related: 7 Vital Steps to Position Your Company for Acquisition

4. They keep the business simple.

If you can appeal to a lot of potential acquirers, you'll increase the chances of finding an acquirer and also increase the value of your business. So it pays dividends to only add complexity to your business when it is profitable.

In 2011, I acquired a publication that had a very profitable newsletter. It also had very unprofitable videos and a dead user forum. The prospect of maintaining these extra, non-profitable business centers caused me to reduce the amount I was willing to pay for that sellers business.

As you add moving parts to your business, make sure they add to the bottom line in a substantial way.

5. They considered the transition.

Selling an online business is a complex process. Seven-figure sellers reassure acquiring companies that the transition will be smooth, and that they'll be available for transition assistance.

Ways you can help smooth the transition period include:

  • Offer training. Agree, in writing, to be available for 30 or 60 days after the close to help with any transitional needs.

  • Document processes. Write out common processes in your company. Pretend that you are hiring someone to do your job (you effectively are doing just that), and create materials to match.

  • Create videos. While written processes can be helpful, videos can be even more helpful to show how you do things.

  • Invite buyer to spend a few days with you. One of the most effective ways to transition a business is to do it in person. Invite your buyer to spend 3-5 days shadowing your work.

With most active acquisitions occurring outside of the news cycle, there is a great opportunity for entrepreneurs to cash in on what is currently a buyers market. Follow the habits above, and you'll be well on your way to your own seven-figure exit!

Related: 3 Ways to Get Big Spenders to Acquire Your Startup

Mark Daoust

Founder, Quiet Light Brokerage

Mark Daoust’s passion for creating sales agreements that benefit both sides of the table led him to create Quiet Light Brokerage in 2007. Guided by the bedrock values of honesty, integrity and transparency, Daoust built Quiet Light to help sellers of internet businesses. His own business recently was selected as the #1 brokerage for buying and selling websites valued at over $1 million. Quiet Light and Daoust are headquartered in Minnesota, where Mark sometimes gets to run home to help his wife teach a quick class to his four children.

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