M&A Insights: Chris Jones in New State, New Life - Making the Move with Financial Success

In the fast-paced business world, making the right moves can lead to incredible opportunities. This is a core concept in the book New State New Life: Making the Move with Financial Success, by Sean McDermott at Summit Investment Advisors.

The first chapter features Chris Jones, the CEO of True North M&A and Sunbelt Business Advisors. Chris shared his journey, which started in college when he took a job at a distribution company. There, he got his first taste of the business world, and after meeting the owners, he found himself drawn to mergers and acquisitions. A mentor saw potential in him and encouraged him to join Sunbelt 20 years ago, setting the stage for a career helping business owners exit.

Over the years, Chris grew with the company, moving from partner to president, and is now leading Sunbelt Business Advisors and True North M&A —a branch that emerged from Sunbelt after recognizing a gap in the market. In the first chapter, Chris reflects on his journey and shares valuable insights into what business owners should keep in mind as they navigate their paths in the M&A space.

In this blog, we will explore some of Chris's insights in the book and how they may impact your business and your goals.

Preparing to Make the Move

When you are preparing to sell your business or relocating to a new state, you are often not just contemplating moving and leaving your company. You are also grappling with the unknowns of the future. One of the main points that Chris stated during his interview was that part of what we do at True North and Sunbelt is that we help business owners establish and navigate what they need to move on to the next chapters of their lives. Chris stressed the importance of being ready personally and professionally before making such a big change.

Is Now the Time to Sell?

One of the biggest questions business owners have is... "is the right time to sell?" The answer is not always easy, as your business might need to undergo changes before it is ready to sell. Chris put it well: “Like health issues that develop over time, you need time to improve your business and reduce risks or uncertainties.”

An example of this that Chris points out during his interview with Summit Investment Advisors is customer concentration. He notes, "You don't have to fix everything, but the more risks a potential buyer sees, the less likely you are to get a good price—or even sell the business at all."

Chris also highlighted several reasons why now may not be the right time to sell. One key indicator is a lack of clarity about why the owner wants to sell or a lingering love for the business. A crucial question that Chris said to consider is, "What will you do the day after closing that excites you?" If you do not have a strong answer, it may suggest you are not ready to sell. Successful selling involves aligning personal, business, and market readiness. Owners may often feel ready after a tough period but may not want to let go of their business quite yet.

On the other hand, indicators that signal now is the right time to sell your business include a loss of passion or excitement. You might feel stagnant or too tired to take your business to the next level, resulting in a decline in enthusiasm. This is completely normal!

Many entrepreneurs, like yourself, move on to pursue other endeavors, whether business-related or not. You might want to spend more time with your grandkids or have developed a new passion for a different industry. Regardless, the right time to sell your business is when you feel prepared, the business is ready, and the sales can financially meet your goals.

In the book, Chris discusses overlapping circles, illustrating that the ideal time to sell your business is at the intersection of personal readiness, business readiness, and market readiness.

Identity Crisis

When you decide it is time to embrace this change, you may quickly find yourself experiencing an identity crisis. Rest assured, this is a common struggle for many business owners.

Consider this: if you started your business 30 or 40 years ago and have dedicated each day to building it into what it is today, your identity may have become closely intertwined with it. As Chris mentioned in the first chapter, whenever you engage in small talk, the question "What do you do?" inevitably arises, and your consistent response has always been, "I own such and such business." Perhaps without realizing it, being a business owner has become a core part of who you are. It is where you have faced challenges, achieved many goals, and taken huge risks.

As noted in Sean McDermott's book, moving on and selling your business means severing ties with the habits, routines, and daily life you have built and ending a long-standing relationship with your business that has lasted for years or even decades.

The Value Beyond You

When preparing a business for sale, it is essential to manage your business as if you were not a part of it. The business can be more attractive to buyers and increase their perceived value; if they have confidence, they can integrate into it smoothly.

Chris notes that owners often assume that simply handing over the financials will suffice, but this approach fails to capture all the business's value drivers. Chris states, "It doesn't tell its story because where risk drags down a price, growth opportunities pull up a price." Describing your business accurately is essential because buyers need to understand both the risks and the potential it offers.

It is helpful to manage your business outside of day-to-day operations if you are not a part of it. That includes expenses. Chris notes that many owners have certain expenses intertwined with their business.

At both True North M&A and Sunbelt, we advise business owners to "at least the year before you sell, and preferably two years before, run it clean. Show all your profits. Invest in taxes. If you still do certain things through the business, make sure they are well documented so we can add them back and show the true earning power of your business to get the best possible price."

True North M&A

The interview between our CEO, Chris Jones, and Sean McDermott at Summit Investment Advisors in the book New State New Life: Making the Move with Financial Success, outlines key insights that can help you navigate selling your life's work and much more. Reach out to Michael Hubsmith at True North M&A to learn more about optimizing your life's work.