This is the Sales Gravy Podcast.

Hi.

I'm Jeb Blunt, best selling author of fanatical prospecting, objections, sales EQ, and inked, and I'm here to help you open more doors, close bigger deals, and rock your commission check.

Welcome back to the Sales Gravy Podcast.

I'm Jeff Blunt Junior, and today's conversation is with a really, really experienced entrepreneur who has lots of insights into how you actually build a business, grow it, and then sell it, and get out of that business, which is what a lot of people are in business to do.

And I I'm really excited for this conversation because we have mister Chris Spratling, the founder of Chalk Hill Blue Limited, a leading business coaching and consulting practice that specializes in helping business owners to scale their companies, operations, and to achieve successful exits.

With over thirty years of business, Chris has owned, bought, and sold multiple 7 figure businesses himself, and he's brought that experience into his new book, The Exit Roadmap, which is the insider's guide to selling your business profitably.

And this is a new book.

It's published in May.

If you're a salesperson or an individual contributor listening to this and you think, well, I'm not a business owner, the first thing you should do is still read this book and listen to this podcast because when you are selling to business owners or CEOs or people who have high strategic outcomes and mindsets, you are gonna be learning a lot here about how to speak to those people.

And if you're one of those people, you might wanna get out of your business, and Chris is gonna help us figure out how to do so.

Chris, thank you so much for being on the show.

Hey.

Listen.

It's great to be here.

Thanks for having me on.

It's, a real full circle moment for me as, we talked about a little bit off air.

You know, we typically give all our new clients when we onboard them two books.

One is our own, the exit road map, rather understandably, and then the other one is your book, fanatical prospecting.

It's one of the coolest books I think we've ever read and and one we, urge all our clients to really read as part of their scaling journey.

Well, I'll take that.

Shameless plug.

Go get this book and then go buy fanatical prospecting because you probably need it.

Go listen to it again.

But, Chris, I I wanna get your insights on this because from a sales perspective, what's the single biggest mistake that entrepreneurs make or people who are building businesses to sell make when they are going out to grow their business and it's gonna keep them from being successful and get to that high value exit?

What's that mistake that they make?

There's two things, really.

First and foremost, as a general comment, is that business owners, entrepreneurs, senior sales professionals generally under prepare for probably the biggest event in their working career, an exit.

And if I had to generalize again, I think the single biggest mistake those same people make is confusing sales, I suppose, with what I would refer to as sales value or quality of sales.

So if the sales machine only works because of the founder or one or two key individuals within that sales function, it's not actually that valuable.

It's actually quite a risky purchase.

And high value exits come from a couple of things really.

They come from predictability.

And underneath that predictability are well documented sales processes, transferable client relationships, and a sales engine that fundamentally runs whether the founder, the CEO, or indeed the senior salespeople are in the room or not.

Mhmm.

And without that, you know, businesses will sell for sure, but they won't reap maximum value.

When you're working with clients and you are evaluating their sales engine and I know a lot of companies are in the space where they have the founder led seller.

They're passionate about their business, and they believe in it.

And so when they get into a room, other people believe them too, and it's a sale.

It's easier for them.

I wouldn't say easy, but easier.

And then you bring on a skilled salesperson.

They're really good at selling it.

They're not as good as the founder, but they're very good at selling it.

And that's because they have a lot of sales skills.

They have a lot of, grit about them.

And then you bring in that second salesperson, like, the one right after that.

And they don't care about the product as much as the founder.

They're not as skilled as the first salesperson that stuck and was around for more than, you know, six months at a time.

And you're trying to build an organization, a sales organization engine underneath that.

How do you actually get over the hill from one or two people selling and keeping the business going to a sales engine that works when those people aren't in the room?

That's a huge leap for a business in terms of their profitability.

Right?

So, again, I think it comes back to that process point I just made.

Buyers want a machine, a sales machine, not a mystery, I suppose.

So a well documented repeatable sales process takes that intuition, that gut feel, that passion that came from the founder of the business into something that's much more transferable in terms of value.

And when you're buying businesses, what you're looking for, of course, is that there there is that strong process and a track record of consistent results so so as to give you the confidence that there's gonna be future results.

Because, of course, when, you know, you buy a business, that's the end of the entrepreneur's journey.

But, of course, it's the start of your journey as the acquirer.

And so, you know, what you're looking for is real evidence that there's clarity in terms of the stages of the sales cycle, you know, that there are clearly defined criteria for qualifying, whether it's a decent lead or not, playbooks in place in terms of discovery phase, the proposals, the closing stages, and ultimately great systems and processes like CRM systems that give you the the data capture bits from which you can learn and continue to enhance that sales process, you know, forever in a day, really.

So for me, it's about codifying the founder's intuition into something that's repeatable and measurable and ultimately can scale.

I think we've been talking around this, but you label it as the golden handcuffs.

So in the context of of this conversation and, I guess, what is it that founders are doing that are, direct involvement to the devaluation of a company?

What what is that concept?

Can you walk people through that really quickly?

I mean, we talk about it in in the book in terms of the 10 drivers of of optimum value, and one of them is making sure that the business isn't overly reliant on the founder who's probably driven most of the sales operation as you're quite right, you point out.

So, you know, when all of the big clients, you know, rely on you, the founder, that's not a strength.

Actually, that's more of a dependency.

So that's why we see buyers call it the golden handcuffs, and it's ultimately what drags the valuation of that business down.

So, you know, what we're essentially trying to do with the clients we work with is reduce that over reliance on the founder and equally applies in another driver to the key members of different departments, particularly the sales team.

The goal of the founder is really to make themselves redundant, you know, in the overall processes of the business, particularly in terms of the sales function.

And that's when we create real optimum value and transferable value to an acquirer.

I find that with businesses that are founder led and and the engine is the founder, that all of the founders I talk to in that space, and all of the CEOs I talk to in that space who who have a lot of the team has a lot of reliance on them, they wanna have more delegation.

They want more time on their plate.

They they say all the things that we're talking about here, Yet when the time comes to actually let these processes get out of their hands and delegate them and trust their team to take over, I find that there's a lot of resistance.

So I know you come across this thirty years of doing it, doing all this coaching.

What are your conversations like with these folks to help them break out of the golden handcuffs?

And maybe it's a mindset thing, but I wanna hear your perspective on what those conversations are like.

Well, I think there are a number of things that we go through.

Firstly, it's about educating future sellers, you know, as to how businesses are valued.

And, again, getting them to understand the key drivers of value and equally, you know, all of those things that actually devalue a business.

And I think once there's clarity around those particular points, then actually it's a lot easier for most founders in particular to let go of key functions like the sales function.

Because ultimately, what we've got to do is we've got to get founders focused on the personal aspects and, you know, personal readiness for a sale.

You know, it's scary, but pretty much across the globe, less than 40% of company owners have ever formally had their business valued.

You know, most of them are working in blissful ignorance based on conversations, you know, with friends, maybe down the pub or at the golf club or whatever, where they say a business like mine typically gets a multiple of x, whether that's a multiple of net profit or adjusted net profit.

You know, they all have their little myths and things like that.

And, of course, a bit like your house, you know, a business is only worth what someone's prepared to pay for it.

So I think it's about personal readiness first, then it's about getting the business ready in terms of optimum value.

And it's showing them, you know, the the increments that come with, you know, ticking off some of those 10 key drivers of value.

And then I think most people would would let go.

But often people think that they have a plan to sell their business.

And, actually, they they haven't really got themselves personally ready and understood what they're gonna do next.

So part of personal readiness is is learning to work out what you're gonna do once you have got this big check.

And and and let them go is difficult because for many founders, the business is like another child.

So talk about readiness.

You talked about this from a sales context, even from a founder context, and then preparing yourself for that biggest day in your business career potentially is your first exit or second exit or third exit.

It's the biggest thing you could do.

What does it look like to be ready?

I know you talked about the 10.

What are some of the most important things that you would tell somebody if you had, you know, fifteen minutes with them in a in a pub, and they were asking you these questions and and they demanded you give them tips?

What would be the most important ones you gave them?

First off, it's never too early to start preparing for a sale.

We meet a lot of business owners, you know, and a lot of them will come to us and say, look.

I hear you're really good.

Can you help us sell our business?

And then you ask them a few more questions like timelines and so on and so forth.

And in fact, those timelines are really very short.

They want to be sold and also on the beach very quickly.

And, normally, that point, my heart sinks because, actually, getting a business ready for sale, let alone ready with a view of optimum value, takes a period of time.

So generally speaking, we would typically say it takes a couple of years to get that business ready for sale, roughly nine to twelve months to take it through the sales process if you went for a a reasonably structured approach by appointing your deal team, getting yourself a corporate finance or a broker on board, marketing the business through to exclusivity with one preferred bidder and hopefully completing deals, somewhere between nine to twelve months.

And then, typically, you're looking at twelve to twenty four months in terms of handover.

Mhmm.

So when you put those bits together, it's not a six month process as some people would like to think it will be, you know, in the way that they might sell their house.

It could be, you know, four to five years from start to finish.

And so actually getting people aligned with that way of thinking is is really quite difficult.

And so, again, the number one tip I would say is it's never too early to start preparing.

What are some questions that business owners and people who are looking to exit or sell a business, what should they expect from buyers?

You know, as they go through that, they get to twelve months.

They've got the business ready.

They start marketing it, and they're gonna go through the they're actually in a sales process of selling their own business, which is a different sales process than selling for the business.

Maybe we can have a conversation there.

But what are some of the questions that they need to be prepared to answer, especially in regards to their sales engine?

They're gonna go through all sorts of questions, you know, in terms of, you know, pre due diligence and then during due diligence, for sure.

But if we focus on the the sales and marketing aspects of that due diligence, you know, they're definitely gonna want to test whether the pipeline is real or whether it's just optimism, you know, whether as a business, you've consistently hit your forecast and your budgets because what that will do is ultimately build trust and ultimately, again, encourage them to bid optimum value for the business.

So, you know, typically, I would train some of our clients to expect questions around how accurate their forecasts have been, you know, what percentage of the pipeline typically converts, you know, how much of that revenue is recurring revenue as opposed to project based or one off sales revenue.

Because as I say, the the buyer's gonna want proof that, you know, the pipeline isn't just wishful thinking.

They're gonna want historical data.

So if you go back to what we talked about before about the importance of having proper sales records in your CRM system, you know, that's gonna be really important to bed to provide the evidence to convince a potential acquirer that the sales forecast is not built on wishful thinking.

It's about the preparation again.

It's about that clean, transparent data and realistic forecasting.

And, of course, that transfers into the financial due diligence and how, you know, the the overall p and l forecasts are built up based on the sales effort.

I wanna flip the script a little bit because you work with people who are preparing to sell a business, but you have a lot of experience with buying and selling businesses.

As a buyer, as a as someone who's going to invest in a business, what are the red flags that you look for before you put any, you know, earnest money down or you put any commitment down on the table to go through a real process of of due diligence with the business?

What do you see and what do you look for?

I think there's a a bit of a crossover what we just talked about, but let's do it in reverse.

First and foremost, the the biggest thing that's gonna scare any potential acquirer away is, you know, a founder who's looking to sell who equally doesn't have a real grasp of their numbers.

So whether that be the the financials overall of the company or their sales numbers, you know, and the various metrics that underpin that, you know, if that's not there and they're not able to articulate those and stand up to some fairly gentle questioning to start with around that, I'm probably as a buyer gonna run because I'm immediately going to think, what else are they not telling me?

What else do they not have a handle on?

Just how well is this business run?

I think that that's important for salespeople too.

If I'm a sales manager, I'm doing the same thing to your pipeline.

Talk about fanatical prospecting.

It sounds like those principles, you know, flip over into building an exit plan very, very well and that you have the great players, the great football players, you know, across the The UK, they know the statistical percentage chance of them getting a goal from 30 yards or 30, you know, 30 meters to a 100 meters.

Like, they just know.

The goalie knows he's not kicking a goal in every single time, but he knows where the high percentage plays are.

The same thing in a business.

And I think that one of the areas that I think you would have a lot of expertise in is around what outside vendors should be potentially prospecting for with business owners who are in the process of getting their business ready to sell.

I know a lot of vendors who have CRMs or sales technology or they have information or they have whatever it is that they sell, and they're gonna go talk to a founder who's getting ready to sell.

I think one of the challenges is when you're getting ready, you don't have a lot of space to make big decisions really quickly.

You are looking for safety.

You're looking for trust.

And salespeople typically call in, and they don't build any of that.

So what should outside vendors who are sales professionals be more in tune to when they call a business owner who's getting ready to to get out?

I think there's a number of things.

So, you know, first off, you know, buyers don't buy past performance.

They buy future performance.

And, again, if if vendors can help, you know, future sellers build a business that can demonstrate clearly how, you know, it's got not only a great track record of profitable performance, but actually has built systems and processes that can help that business scale even further, then, you know, they're gonna be adding value to that business and so on and so forth.

So I think it's about vendors understanding, you know, the different types of buyers that are going to potentially be interested in this business.

What's going to bloat the boat, if you like, of those different types of buyers, and how, again, you know, by buying that business, you know, an acquirer can see a future path to even greater performance than the business has demonstrated so far.

Because as I said earlier, you know, when, you know, a seller takes a business to market, that's essentially the end of their journey.

For an acquirer, it's just the start.

And so the what they're much more interested in is the future prospects of that business.

So, again, those repeatable sales processes, the CRM solutions that give you the evidence to back up what you're wanting to see is gonna be absolutely critical in terms of, you know, making sure that you're gonna get return on that investment.

Because you gotta remember, no acquirer has got to buy your business.

They've got other choices as to how to invest that money.

They can stick it in the bank and wait for something better.

They can go and buy one of your competitors.

So you've got to give them a clear story as to how this business can scale, and the sales team are gonna be crucial in that.

You've been I caught you at the end of your day.

It's it's late in the afternoon for you, early evening.

You've been working all day long.

You're at the start of your week.

You're looking at the rest of this week.

You've you've had more insight into the current market trends of buying and selling businesses than anyone I've talked to in the last three months.

What are some of the most recent challenges that you have had to deal with that in that that tell you a little bit about the marketplace and what's happening in in the economy right now?

I think it varies depending again on the the types of buyers.

So, you know, a lot of the clients we work with will sell either directly to private equity, VC backed businesses, or indeed businesses that are funded themselves by private equity.

And so they're particularly worried about that point we just talked about, in fact, about how much CapEx they're gonna have to put into that business to scale it to the next level and beyond again.

So, again, that credible sales growth story is gonna be particularly important to them.

Actually, there's quite a lot of money still around in the market, and then actually still, you know, despite interest rate rises relatively cheap, you know, compared to years gone by.

So there's a real appetite.

But, again, it comes back to credible robust data that gives people the confidence to to step off, if you like, the the legend and make that purchase.

So I think they're the biggest challenges for that type of buyer.

With the smaller businesses, again, I think it comes back to people getting confident that they can trust in the sales performance, but it's not, over the last couple of years, a bit of a blip.

And, actually, it's all about to drop off a cliff again.

So, you know, the sales piece, I I keep coming back to it.

It's so, so important.

I know you released your book, which has been a really fantastic resource for people in this world.

And I wanna I wanna have a moment for you to tell people where to find it and where to connect with you and to learn more about what you do with, with the businesses you support.

So where can you find your book, and then where should people, get connected?

Yeah.

I mean, look.

It's it's available on most of the, online stores, including our friends at Amazon.

So that's probably the simplest place to buy it, whether you want to buy physical copy or electronic copy.

They're both there, obviously.

And, you know, depending where you are in the world, it's in various physical bookshops too.

Haven't quite got the footprint that you guys have got just yet, but we're working hard on it.

This is part of it.

This is absolutely part of it.

And and go connect with Chris on LinkedIn.

His entire company is on LinkedIn, and Chalk Hill Blue Limited is also on LinkedIn.

Go connect with them.

They have great resources for both sales professionals and for business owners and people who are acquiring businesses.

And I I wanna take a moment and thank you all for listening to the Sales Gravy Podcast.

Please go to Sales Gravy University to check out a free course if you haven't already.

Use the code free course at checkout, the Sales Gravy University.

Over fifteen hundred plus hours of sales specific training content from 55 plus of the world's most renowned sales trainers.

It's the most powerful sales training engine on the Internet, so go check that out.

That's learn.salesgravy.com.

Learn.salesgravy.com.

Chris, thank you so much for being on the Sales Gravy Podcast.

My absolute pleasure.

Thank you.

We will catch you next time.

Hi.

I'm Jeb Blunt, best selling author of Fanatical Prospecting Sales EQ, Objections, Inc.

And my brand new book, The LinkedIn Edge.

You know, companies and people from all over the world come to me to get answers to their toughest sales and growth questions, And that's why I created Ask Jeb.

There's a segment on the Sales Groovy podcast where you can come and ask me anything.

If you wanna get on the show, just go to salesgravy.com/ask.

That's salesgravy.com/ask.

One of our great producers will get you on, and you can ask me anything about sales.