Increasing the Effectiveness and Enhancing the Lives of CEOs
and business owners.

Contents of this issue...
   .. Welcome - A few words from the publisher, Gary Lockwood
   .. Thought-Starter -  "Don't Take it Back"
   .. Guest article - "Selling Your Business"
   .. CEO Resources
   .. Quotes to use in your staff meeting this month
   .. Humor to lighten up the executive suite
   .. Contact the publisher
   .. Subscribe and unsubscribe instructions


See past issues of the CEO Success Report at:
     http://www.CEOSuccess.com/archives

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      WELCOME to this issue of the CEO Success Report!
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Hello again. I'm Gary Lockwood, President of CEO Success.

Welcome back once again to the CEO Success Report. I know you
have no shortage of material to read and I thank you for choosing
to read our newsletter.

Find resources for your success at www.CEOSuccess.com

We work hard to provide practical ideas, thought-provoking concepts
and useful information for you. Please give me some feedback
about this issue or about the website. Send your comments to
   mailto:Gary@CEOSuccess.com

Recently, a client was telling me about her upcoming three-week
vacation to Australia. She was excited about going on such a
fabulous journey. She was also dismayed at the thought of
returning to the mounds of work that will surely await her.

Together, we worked out a bold plan. Read about it in today's
thought-starter article, "Don't Take it Back".

Our guest article this month is provided by MetLife. The article
is about selling your business.

Maybe you started your enterprise, maybe you bought it. Either
way, you've invested a lot of yourself in the business you own.
Now, perhaps you're thinking that it's time to sell it and move on.

A business you've owned has taken your time, effort and financial
investment, and selling often is a bittersweet proposition. The
challenge is to find an effective way to sell your business in a
reasonable amount of time and on the best possible terms.

Our guest article today discusses how to be as smart in selling
your business as you were in running it.

I hope you enjoy receiving these articles and ideas to
help you sharpen your thinking about being an effective CEO.

My wish is that you use the ideas in the CEO Success Report to
get the results you really want. If you want some help in putting
them into practice, or if you have questions, email or call.

As you know, our specialty is Increasing the Effectiveness
and Enhancing the Lives of CEOs and business owners.

May I ask a small favor? Please forward this issue to other CEOs
and company presidents who may be interested in receiving
these messages. Thank you.

Enjoy this issue with my compliments.

Sincerely,
Gary Lockwood
CEO Success

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       This month's THOUGHT-STARTER
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    "Don't Take it Back"
    by Gary Lockwood

Last week, a client (let's call her Carol) was telling me about her
upcoming three-week vacation to Australia. Carol was excited
about going on such a fabulous journey. She was also dismayed
at the thought of returning to the mounds of work that will surely
await her.

Together, we worked out a plan. We first identified all the routine
tasks that Carol performed. Then we assigned each one to an
employee who could cover that task temporarily, for the three-
week period.

One by one, she delegated every routine task to someone who
could perform that activity for the three weeks of her trip to
Australia.

At this point, we discussed the bold strategy. If those people could
perform all her routine tasks for three weeks, why not let them
keep on performing those activities? Why take it back?

Carol discovered that there was no reason for her to resume
performing those routine chores. If her people could do it for
three weeks, they could do it from now on.

Then it hit her! What was Carol going to do with all the time that
she'll have when she returns from her trip? For Carol, the answer
was easy. She will block significant time for:

    Planning and developing strategy.
    Strengthening relationships with key customers.
    Identifying possible new products and new markets.
    Finding ways to increase profits.
    Meeting with new potential customers.

What does all this mean for you?

First, this technique works well when you're planning to be away
from your office for an extended period of time. So why not plan
a vacation? You come back from time off with a new perspective,
a higher energy level, increased creativity, and often, a breakthrough
idea.

Secondly, make arrangements to let go, for the time of your
absence, of the activities that are consuming your time.

Let go of tasks that someone else can do - "I can do it better and
faster", you say. Sure you can, but ultimately, you are judged on the
results you can cause to happen, not just what you can do on your
own. If another person can accomplish a task 80% as well as you,
delegate.

Let go of your need to say, "Yes" to every request - Some of the
most stressed people around can't say no to the next fund-raiser,
the next committee, the Little League, the church, etc. Politely, but
firmly say "No".

Let go of some meetings - The typical manager spends 17 hours
each week in meetings. Nearly a third of that time is wasted.
You've seen the symptoms: hastily called meetings, no ending
time stated, no agenda, no official record of what was done or
said, no follow-up. Skip some of the meetings or send someone
else.

Finally, don't take it back! Instead of returning to your routine
tasks, figure out which tasks you perform that REALLY make
a difference. The rest is just stuff. What are the 2-3 things that
YOU do to drive the business? When you can focus on high-
impact tasks, you can significantly increase your productivity.

Let go of the routine and don't take it back!

   About the Author...
Gary Lockwood is Increasing the Effectiveness and Enhancing the
Lives of CEOs, business owners and professionals.
Get the Free BizSuccess newsletter -
     http://www.bizsuccess.com/newsletter.htm
or send any blank email to mailto:subscribe@BizSuccess.com


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          Guest Article
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     Selling a Business
     by MetLife

Maybe you started it, maybe you bought it. Either way, you've invested
a lot of yourself in the business you own. Now it's time to sell it
and move on. A business you've owned has taken your time, effort and
financial investment, and selling often is a bittersweet proposition.
The challenge is to find an effective way to sell your business in a
reasonable amount of time and on the best possible terms.

Finding a Buyer

A person selling a business outright has a variety of ways to locate
the right buyer. Many businesses are put up for sale in classified
ads in newspapers, business journals or trade publications. Local
business associations, such as your chamber of commerce,
business development committee or economic development center,
can also help get the word out to qualified buyers. Here are a few
of the other avenues you can explore.

Business brokers
A business broker has a portfolio of potential buyers, people eager
to buy a successful business. Like real estate agents, brokers are
experts at bringing buyers and sellers together and assisting in the
negotiation process. They may be able to help in locating sources
of financing, too. Business brokers are paid on commission; there-
fore, a high sale price is to their advantage, a factor that works in
your favor as the seller. However, a broker who is looking for a
quick sale might be inclined to undervalue your business. Before
you sign up with a broker, always ask for references from previous
customers and check with the Better Business Bureau.

Competitors
If your business has gained market share at the expense of your
competitors, one or more of them might be interested in acquiring
your business, especially the customer/prospect base. To protect
your interests and ensure that your business maintains its value,
potential buyers should be approached by a third party such as a
lawyer, accountant or broker. Only when genuine interest on the
part of the competitor has been established can your company's
name safely be divulged.

Customers
A customer who purchases a product from you and then resells it
is another potential buyer. Buying your company may offer that
customer new business opportunities in an area he or she already
understands. However, if you have multiple customers who compete
with each other, you'll want to exercise extreme caution approaching
one of them. Again, consider hiring a third party to sound out
interest.

Vendors
Vendors are good prospects for much the same reason as cust-
omers. Purchasing your business represents an expansion into
a known area with low risk. This is particularly true if you've been
a customer of theirs for some time and have an established sales
record.

Employees/partners
Some of the best prospects may be right under your own business
roof-partners and employees. If you've been running the business
with others, those people are likely candidates to take over.
Especially in small businesses, you'll find long-term employees
who have learned your business inside and out. They can be ideal
buyers. They may not be in a position to buy your business outright,
but they are likely to succeed because they understand the business.
A sale like this also causes less trauma to customers. In fact, they
may not even be aware that a change of ownership has taken place.
You may even continue to participate in the business as a consultant.

Once you decide to market your business, it's usually wise to keep
your plans confidential. If word gets out that you plan to sell, your
competitors will have a field day, and your suppliers, employees
and customers may become wary. Both situations could adversely
affect your ability to continue in business and ultimately affect your
selling price.

What Is Your Business Worth?

Determining how much you should ask for your business is a comp-
licated process that is best done with the help of a business broker
and an accountant. Establishing the value of your business is done
in negotiations with a serious potential buyer. Factors you consider
important may not appear so to the potential buyer and vice versa.
But before you ever sit down at the negotiating table, you have a lot
of homework to do.

In preparing to sell a business, you first must gather documentation.
Audited statements prepared by a reputable accountant will help
establish your business credentials. Tax returns also offer proof
of business performance. Generally, three years of financial records
will serve to establish where the business is going and its
profitability.

Among the items you'll need to gather are:

  Income statements,
  Balance sheets and income tax returns from the last three to
     five years,
  Records of accounts receivable and payable,
  Copies of any notes or mortgages owed,
  Existing contracts with employees, customers or suppliers,
  Present lease,
  Corporate books (if incorporated) or partnership agreement
     (if partnership),
  Any patents, trademarks or copyrights

There are various methods for valuing a business, each with its
limitations. One method involves calculating net worth by subtracting
liabilities from assets. Fixed or tangible assets include everything
from machinery and office equipment to inventory, receivables (you
may have to guarantee their collection) and prepaid expenses,
such as taxes and deposits. on the other side of the balance sheet
are liabilities, items that may reduce the selling price of your
company.

They include payables such as salaries, bills and periodic expenses,
short-term bank notes and/or long-term loans, as well as federal,
state and local taxes. (In figuring payables, don't include invoices
for products or materials you use in the course of producing your
own products for resale. Those are accounted for as cost-of-goods
sold.) One key drawback to this valuation method is that it does not
take into account the profit or earning potential of the business.

Another method of valuing a business is based on its income or
profits and the return on investment that a buyer could reasonably
expect. However, since small business owners often write off
everything they legally can in order to reduce taxes, their profit
margin may appear to be smaller than it really is. It behooves you,
as a seller, to prepare an itemized profit-and-loss statement that
shows what excess cash your business generates, not simply
what your final profit was for tax purposes.

Be wary of trying to set a price on your business based on simplistic
formulas or rules of thumb, or on comparisons to the amount paid
for similar businesses. Unlike home sales in a particular real estate
market, there are simply too many variables between businesses
to make truly useful comparisons for pricing purposes.

Valuing Goodwill

Establishing the net worth of your business is fairly straightforward.
Determining the value of an entity created through your personal
efforts is more subjective. As the seller, you'll unconsciously factor
in how difficult it was in the beginning and how much sacrifice was
necessary to weather leaner times. You must realize, however, that
others will evaluate your business from a much narrower point of
view: its ability to return an investment over a fixed period of time
with an acceptable margin of risk.

This does not mean that a buyer will fail to appreciate your efforts
in building the business. But goodwill is the single most difficult
portion of your business to value. Your reputation and relationships
with your customers, vendors and the community, along with your
participation in trade-related activities, all contribute to goodwill.
In fact, your customer list is probably among your business's most
valuable assets. Sales of some businesses are based on this alone.
Accurate addresses, buying patterns and payment history all are
important information that should be available to potential buyers.
Guard this information, but be prepared to provide select references
to substantiate its credibility.

In the final analysis, your company is worth only what someone will
pay for it. Generally, a potential buyer's offer will be influenced by
how soon he or she expects to see a return on the initial investment.
Five to six years is usually considered a reasonable length of time
to recoup the initial investment. Among the other factors that will
influence a buyer's offer are the age of your business, how easy
or difficult the business is to operate and the economic climate,
both locally and nationally. Again, getting professional help in
setting a price and in negotiating the sale of your business can
really pay off in the long run.

Financing
How the sale of your business is financed may be driven by your
personal financial needs and lifestyle. Start by deciding whether
you would like to remain involved with the business or walk away
from it entirely. This helps determine whether you will want to
participate in the financing or have the buyer obtain independent
financing. The following options illustrate the levels of financial
involvement you might have in the sale of your business.

Cash
Once a selling price is agreed upon, the buyer simply pays you
that amount. You have no involvement in the financing.

Seller financing
The buyer pays a portion of the agreed-upon selling price at the
time of sale. You provide financing for the balance. The portion
of the sale price financed by you, the seller, may be driven by the
amount of goodwill factored into the total business valuation.
More specifically, sellers often finance that portion of the selling
price represented by goodwill because it is so hard to value.

Lease option
Your third option is to offer your buyer a lease with an option to
purchase. This gives a buyer without sufficient cash or financing
resources an opportunity to participate in the business and earn
the necessary cash portion of the sale price. While the business
is being leased, you are still the owner.

Other Inducements

Finally, to sweeten the deal for a potential buyer, you may want to
offer to serve as a consultant or sign a non-compete agreement.
Consulting is a good option if you're not determined to separate
yourself from the business. It gives the buyer the benefit of your
expertise and provides a smooth transfer of customer loyalty from
the former owner (you) to the new one. It also gives the buyer
confidence that you do not intend to compete under a new
business name.

A non-compete agreement can be an added inducement to a sale,
although you should check with your attorney to find out your state's
requirements. This agreement formally assures the buyer that, for
a set period of time, you don't intend to start all over again under
a new name and lure away customers loyal to your former company.

Passing the Torch

Speak with a lawyer before selling your business to make sure you
have complied with relevant state and federal requirements. You
don't want any unpleasant surprises after the sale. If all goes
smoothly, the transfer of a business can be an exciting and
rewarding time for buyer and seller alike. You get what you want-
the chance to cash out-and the buyer gets the business opportunity
he or she is seeking. Be as smart in selling your business as you
were in running it, and you're sure to be happy with the outcome.

Reference Materials

12 Secrets to Cashing Out: How to Sell Your Company for the
Most Profit by Robert L. Bergeth, Prentice Hall $18.95

The Complete Guide to Selling Your Business by Paul S. Sperry
and Beatrice H. Mitchell Upstart Publishing $22.95

Buy the Right Business at the Right Price by Brian Knight, Upstart
Publishing $18.95

Pamphlets from the federal government

The quarterly Consumer Information Center Catalog lists more
than 200 helpful federal publications. For your free copy write
Consumer Information Catalog, Pueblo, CO 81009 or call
719/948-4000 or visit http://www.pueblo.gsa.gov/.

Organizations

The federal government offers assistance to small businesses
through the Small Business Administration, which offers loan
guaranties, publications, workshops and counseling. For
information, call 1-800/8-ASK-SBA. To access SBA OnLine
(electronic bulletin board), dial 1-800/697-4636.

"Selling a Business" was produced by the MetLife Consumer
Education Center ( http://www.lifeadvice.com )  and co-sponsored
by the U.S. Small Business Administration.

Reproduced from Business to Business Magazine June 2000 issue
     http://www.business2business.on.ca/welcome.html



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        RESOURCES  for CEOs
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>


    MarketitRight.com

Just as the site name suggests, you'll find over 1,500 free plans
and step-by-step guides for launching comprehensive marketing
campaigns. Perfect for someone new to marketing or for the
marketing professional pressed for time. MarketIt Right's timelines,
guides, budget estimates, calculators and alerts educate you
about the process while keeping your project moving on track -
at no cost. Plus there's access to outsourcing contacts for your
projects. And if you're a Marketing Service Provider, check out the
possibilities to connect with new, qualified clients.

Check it out at  http://marketitright.com

  < this resource brought to you by Larry Chase's Web Digest.
      Visit http://wdfm.com

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      QUOTES to use in your staff meeting this month
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>


Look at life through the windshield, not the rear-view mirror.

Man cannot discover new oceans unless he has courage
to lose sight of the shore.

Most people are about as happy as they make up their
minds to be. (Abraham Lincoln)

It is a poor workman who blames his tools.

If you aim at nothing, you'll hit it every time.

Two people can look at the exact same thing and see
something totally different. (James Rhinehart)


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      HUMOR to lighten up the executive suite
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      Army Tactics
 -------------
 During an Army war game a commanding officer's jeep got stuck
 in the mud.

 The C.O. saw some men lounging around nearby and asked them to
 help him get unstuck. "Sorry sir," said one of the loafers, "but
 we've been classified dead and the umpire said we couldn't
 contribute in any way."

 The C.O. turned to his driver and said, "Go drag a couple of
 those dead bodies over here and throw them under the wheels to
 give us some traction."

 SCARED
 ------

 As a sergeant in a parachute regiment I took part in several night
 time exercises. Once, I was seated next to a Lieutenant fresh from
 Jump School.

 He was quiet sad looked a bit pale so I struck up a conversation.
 "Scared, Lieutenant?", I asked.

 He replied, "No, just a bit apprehensive."

 I asked, "What's the difference?"

 He replied, "That means I'm scared with a university education."


 Those who dance are considered insane by those who can't hear the
 music.  -- George Carlin


                    ***excerpts from: http://www.joker.org/  ***


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       CONTACT CEO Success
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Gary Lockwood is the publisher of the CEO Success Report.
   Email:  mailto:Gary@CEOSuccess.com
   Office: (800) 272-1575 (USA) *  (909) 984-3344
   Fax: (815) 361-3041

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         Your Comments, please?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

I appreciate feedback, corrections, and comments about the
CEO Success Report. Please send your thoughts to:
  Gary@CEOSuccess.com <mailto:Gary@CEOSuccess.com>

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
      Subscribe  and unsubscribe  instructions
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