Sell Your Company For a Higher Price By Telling a Better Story
Helping your business's new owners find lasting success often starts with refining the way you tell its story.
I have a friend who created an amazing company that he eventually sold for nine figures. Then, he had to watch the buyer drive it into the ground. What that did to my friend's heart felt like death — and for the business, it was. Although he walked away with a big check, that money was tainted by the destruction thereafter. Business transactions such as this one happen when owners and founders looking to sell their companies underestimate the power of telling a great story.
According to BizBuySell's Insight Report, the number of small businesses sold dropped 22 percent in 2020. However, the median sale price increased by 12 percent — and revenue and cash flow reached new heights. The numbers are good, but focusing too much on the pricing of the sale means owners often fail to think holistically about what happens after the paperwork goes through. As Satori Capital co-founder and managing partner Sunny Vanderbeck writes in Selling Without Selling Out, "Price is not the only thing that matters. It might not even be the most important thing in a sale."
How an owner feels after the sale is related to the alignment of values and the way new ownership cares for what's been built. Owners who focus less on price alone and include the overall alignment in the deal process (between themselves and a prospective buyer) often have an easier time understanding the importance of telling the heroic story of the business. Properly telling the story of the business can elevate the sale from a transaction to a transformative moment in the business's heroic journey.
The power of storytelling in business is that when a story is told well, it can act like a beacon that magnetically attracts an aligned buyer who respects what's been built and wants to add to that foundation without tearing it down to studs. The challenge? Most owners are naturally charismatic, but that doesn't always translate to the ability to tell their own story authentically and in ways that invite prospective buyers to fall in love with the business before making their offer. Selling a business is a matchmaking process, but so many owners approach it entirely from the analytics of the business. That might be acceptable for an arranged marriage, but it's less ideal for an owner looking to marry off his or her creation to a new owner who will love it for life.
When storytelling is done well, it creates a gravitational pull that attracts the kind of buyers who look at the organization and say: "Where have you been? I've been looking for you for years." Someone who feels that way about a business is not only apt to treat it with care and respect as it transitions to a new chapter, but is also a buyer who is happy to pay a premium for the opportunity to do so. Most company owners have no idea how to tell that story — one that creates intimacy with the ideal individual while also pushing away anyone who would otherwise waste their precious time.
How do owners tell the story of their company so that buyers see the business through the eyes of those who love it most — as brilliant, beautiful, flawed and heroic?
Crafting a company's hero's journey story
To start, owners would do well to familiarize themselves with Joseph Campbell's breakdown of the hero's journey. Only by learning the elements of what makes up a heroic story can one start to identify the various hero's journeys within the business that have resulted in significant and transformative growth.
According to Campbell, the first stage in the hero's journey is departing from the familiar into the unknown by accepting a call to adventure, failure be damned. The middle stage involves a series of trials that prepare the business for its ultimate ordeal; this is the challenge that nearly takes down the business. The final stage includes returning home triumphant and transformed with new rewards as a result of overcoming near death and rising again. This journey probably sounds familiar to entrepreneurs who are constantly navigating the hero's journey on the path toward growth and success.
Owners who can paint that portrait of their organization's heroic nature give their companies a chance to be loved by the next owner(s). Here are some ways to unpack and share a business's hero's journey story.
1. Understand the company's story arc
Entrepreneurs want to invite their audience of prospective buyers into the lesser world that existed without the company before it was birthed — the ways the company learned from mistakes, changed as a result of its failures and expanded its capabilities through tests and trials; the ordeals the company barely survived, but also showed what it was made of; and the rewards the business has earned on its way to becoming the living, breathing and heroic organization it is today.
To reveal the primary storyline of their company, it's beneficial for entrepreneurs to ask themselves these three questions: What did the world's problems look like, specifically, before the company existed to solve them? What ordeal nearly took the company down, and what did the organization do to rise again even stronger? How was the soul of the company different on the other side of that transformation? Owners can then use that primary storyline to bring their audience into the room where each moment of the journey unfolded.
A compelling story ensures that the business's heart is left intact because it will attract a buyer who respects and will protect that heart. When Ben & Jerry's was acquired by Unilever, for example, or when Zappos and Whole Foods were bought by Amazon, these brands' stories were so strong that the new buyers signed off on not messing with the existing company cultures. Everything customers love about those businesses has been preserved, and the brands continue to flourish.
2. Revise the story to perfection
After crafting and shaping a version of their hero's journey story, owners want to revise and trim that story to something that can be presented in about 10 minutes. Putting a frame around such a huge story isn't easy, but it is important. And impactful storytelling requires lots of revising, so expect the story to go through numerous iterations as you whittle it down to its most moving form. And remember, it's important not to leave out the most painful moments. Ultimately, those are what defined you and likely birthed the greatest gifts the company now has to offer. Owners would be wise to examine what they're afraid to include and push through the discomfort to write out the part that scares them most. At my company, we refer to this as a vulnerability practice. According to Harvard Business Review, being vulnerable and open leads to greater hope and trust in those people we confide in.
Entrepreneur Richard Branson — a major advocate for the power of storytelling in business — believes that sharing both the ups and downs of his business is what brings stakeholders into the Virgin brand's story. Focusing only on the positives paints an unrealistic and unrelatable story.
3. Practice telling the story
Business leaders next want to determine who they feel safest sharing this latest version of the story with and then practice telling it. Once they're finished, they can ask questions about what parts hit the listener most. What punched them in the gut? What surprised them or confused them? What made them smile? What was left unanswered? What, above all else, stuck most with them? Using that feedback, owners can touch up the story — but the practice isn't over yet.
It's helpful to think of this process as a workout. The more they practice, the more confidence an owner builds in sharing the vulnerable parts of the story. Hopefully, owners start seeing admiration and gratitude when they share these stories. Two things can help a storyteller get stronger in sharing their story — more reps (telling the same story to multiple people) and more weights (talking to the same person, but sharing something more vulnerable from the company's history).
The more that owners create an environment for potential buyers to fall in love with the business, the more likely it is that buyers will be thoughtful about what they do with that company once the previous owner lets go of control. And by telling a great story, owners invite new buyers to play the leading role in the continuation of that tale — the business's next chapter.
Entrepreneur Editors' Picks
This Co-Founder Was Kicked Out of Retailers for Pitching a 'Taboo' Beauty Product. Now, Her Multi-Million-Dollar Company Sells It for More Than $20 an Ounce.
Have You Ever Obsessed Over 'What If'? According to Scientists, You Don't Actually Know What Would Have Fixed Everything.
After He Was Fired From the UFC, This Former Fighter Turned His Passion Into a Thriving Business
Most People Don't Know These 2 Things Are Resume Red Flags. A Career Expert Reveals How to Work Around Them.