Community//

Terri Sherman: “Prepare your books and records”

Prepare your books and records — Organize your books and records before you do anything else. Prepare at least 3 years of financials — business tax returns and financial statements — as well as any leases and lists of assets to be included in a sale. Not only will these be needed if you reach the point of due diligence with […]

The Thrive Global Community welcomes voices from many spheres on our open platform. We publish pieces as written by outside contributors with a wide range of opinions, which don’t necessarily reflect our own. Community stories are not commissioned by our editorial team and must meet our guidelines prior to being published.

Prepare your books and records — Organize your books and records before you do anything else. Prepare at least 3 years of financials — business tax returns and financial statements — as well as any leases and lists of assets to be included in a sale. Not only will these be needed if you reach the point of due diligence with a buyer, but they will also be important for you to get to step 1 of a business exit — the business value.


As a part of our series about “Five Things You Need To Know If You Want To Build, Scale and Prepare Your Business For a Lucrative Exit, I had the pleasure of interviewingTerri Sherman.

Terri Sherman is a Business Intermediary who sells businesses throughout Florida. She has been with the business brokerage Florida Business Exchange, Inc. since July 2011 operating under Terri D. Sherman, PA, and she is a member of the Business Brokers of Florida (BBF) and the International Business Brokers Association (IBBA). As a Business Intermediary, she specializes in the sales of main street businesses, and she has been the recipient of the BBF “Million Dollar Plus” Award.


Thank you so much for doing this with us! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a story about what brought you to this specific career path?

Sure — I fell into it! My background is in the urban music industry, and I found myself burned-out. So, I decided I was going to go home, try to be stationary, and find a job. The problem was, I could not find a job. After applying for jobs, substitute teaching (because it was the only job that would hire me at that time lol), and feeling frustrated, I saw a job posting on LinkedIn that required a real estate license, which I had, though I did not use it. I sent my resume, not even knowing what a business broker was, and here I am…almost 10 years later. I’m convinced that the other jobs I applied for didn’t work out because this was the best fit for me…I just had to find it!

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

The funniest mistake I made when I was first starting was trying to learn how to conduct an initial interview with prospective sellers. I would be so visibly nervous and unsure of how to really run the meeting, and it was just not a good look. What it taught me, though, is that sometimes you just have to stay at it — whatever it is — and eventually it gets better! You just have to see it through. It also taught me that confidence really does have a direct correlation to what we may deem as success. If you are confident in the fact that you know-what-you-know, that’s half the battle.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

I was in a very low mental and emotional space a few years ago, and against my usual manner of coping (which included internalizing and telling the world everything was fine), I confided what I was going through and how I was feeling with a close girlfriend. When I finished dumping on her, I felt very naked, figuratively speaking, and unsure of how she was going to react. She very quickly, but very compassionately, responded with the following: “Our stories are not our own.” That quote, in that very moment, changed so much for me because I understood 1) there is power in transparency, and 2) sharing my struggles may help someone else know that they are not alone in their struggles, which is what she went on to do when she revealed that she had been where I was at that time. By far, that quote is my favorite life lesson quote.

Ok super. Thank you for all of that. Let’s now shift to the main part of our discussion. Can you tell us a story about how you were able to build a business from scratch, scale and sell it to a bigger firm?

Though I have never personally built a business from scratch that I later sold, I have worked for the last 9 years alongside so many whom have done so, and done so successfully. One that comes to mind is the first Internet-based business I helped sell almost 2 years ago. The Seller started the business, which was service-based and very niche, as a hobby. The business began to grow and her life plans were in transition, so she decided to sell. Long story short, she sold it to a Buyer who was skilled in building and scaling businesses — fast forward 1.5 years and he has grown it from 1 city to 24! It’s incredible to see successful transitions that grow and scale so significantly.

Based on your experience, can you share with our readers the “Five Things You Need To Know If You Want To Build, Scale and Prepare Your Business For a Lucrative Exit”. Please give a story or example for each.

  1. Prepare your books and records — Organize your books and records before you do anything else. Prepare at least 3 years of financials — business tax returns and financial statements — as well as any leases and lists of assets to be included in a sale. Not only will these be needed if you reach the point of due diligence with a buyer, but they will also be important for you to get to step 1 of a business exit — the business value.
  2. Have a business opinion of value completed — Even if you aren’t ready to sell your business, it is good to have a business opinion of value completed so that you will know what the market value of your business is before you go to sell. If the value isn’t what you were hoping for, then you will know how to move forward and further scale the business so that it can hopefully reach the value that will give you your ideal return. The opinion of value will also help you with step 3.
  3. Meet with your team — Before moving your business to market, it is always advantageous to meet with your team — your CPA/Accountant, your financial advisor, your attorney, etc. Ask questions! Seek their advice on the best deal structure for you, what pitfalls you should be aware of, what tax implications and/or benefits you may be in for based on the opinion of value, how a sale impacts your personal financial plan, and anything else that you may be concerned about
  4. Work with a professional — Though it is possible you could sell your business yourself, that can be daunting, especially since you still have a business to run. Hire a professional business broker or business intermediary to help you through the sale process. Ask them what professional organizations they are members of and whether or not business sales are their primary business. The reason for this is that though there are some similarities between selling real estate and selling a business, there are a lot of major differences. You want to make sure the person representing the sale of your business truly understands the process so that you can position yourself for the best possible outcome.
  5. Even if you have your business up for sale, you should continue to run your business as though nothing is happening. Focus on streamlining your systems, improving the strength of your employees/team, and where possible, continue looking for ways to grow the business.

In your experience, is there a difference in approach for building a service based business versus a product based business when you have the intent to eventually sell the business. Can you explain?

Yes and no. No, because many of the main checkpoints for preparing your business to sell — organizing books and records, deciding when to sell, implementing good systems — translate to any and all businesses looking to sell. Yes, though, because of the mere fact that the business models for a service-based business versus a product-based business differ. With a product-based business, you have additional factors to consider — How much inventory is included in the sale? Are the additional intangible assets included like a Website/E-Commerce platform? Will a transfer of ownership adversely impact any vendor relationships? Is there intellectual property included in the sale? And those are just some of the factors to consider.

On the other hand, with a service-based business, you are typically selling a “book-of-business” along with any FF&E (furniture, fixtures, and equipment) if applicable. If there is intellectual property and/or digital assets, then of course those should be considered, but overall there are usually less tangible assets with a service-based business than those of a product-based business. Some factors to consider for a service-based business would be the following: How many customers are there? Are there any contracts in place? Are those contracts transferrable? Are the customers attached to you, the business owner/service-provider, or are they attached to the business/service? Upon the sale of the business, are a large portion of the customers going to leave? Again, those are just some of the factors, but you can see how those questions lend to the positioning of the business if it were to move to market.

How does one go about the process of finding a buyer?

There are a number of platforms on which you can advertise your business for sale. Some of the most well-known ones are www.BizBuySell.com and www.BizQuest.com. If you are working with a business broker or business intermediary, they will also advertise your business listing within their multiple listing service (MLS) like what we use here in Florida under the Business Brokers of Florida (BBF). Traditional marketing — letters or postcards — can also be effective if there’s a specific Buyer you are targeting. I strongly advise again, though, that you hire a professional to help you navigate this process so that the confidentiality of the business and opportunity can be better protected.

How can one decide if it is better to build a business in order to exit, or if it is better to stick around for the long term and let the company bring in residual income, or if it is better to go public?

I believe that it is completely subjective. Each business owner has to consider his or her goals — personal and business — to determine what the end-goal is. For some, it is to build a business and exit, and perhaps do it all over again. For others, it is to stick with the same business for decades and perhaps leave it to a family member(s) when it’s time to exit. Then for others, especially those in the startup spaces, their goal is to go public. There is no one-size-fits-all answer for what is best. Know yourself, know what your goals are, and know what your end-game is — knowing those things will help you determine which path is the one for you.

Can you share a few ways that are used to determine a good selling price for the business?

Three come to mind: strategic determination, financial determination, or asset determination. For the strategic determination, a strategic buyer is going to assess the opportunity through the lenses of opportunity more so than solely basing the assessment on financial health. A financial buyer is usually going to value a business based either on a multiple of the net profit or a percentage of the gross revenue, and then also consider any included assets. The asset determination, though, is exactly what it is in name — a total value of the combined assets. The asset determination can sometimes be a good position for a business that may be financially distressed or that has some other adverse impact. Ultimately, though, a business is worth what a buyer is willing to pay for it.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂

I would say to be more considerate of others, and in a non-conditional way. If we were more conscious and more considerate of others, on all levels, many of our societal problems would be eliminated.

How can our readers follow you on social media?

I am most active on Instagram — @MindYourBusinessFL. I am also on Facebook and LinkedIn if you search “Terri Sherman,” as well as Clubhouse, @terrishrmn.

Thank you so much for joining us. This was very inspirational.

Thank you for the opportunity!

Share your comments below. Please read our commenting guidelines before posting. If you have a concern about a comment, report it here.

You might also like...

Community//

Terri Sherman: “Focus on the customer experience and product consistency”

by Chef Vicky Colas
Community//

“How to build you brand.” with Lenore Kantor

by Jason Hartman
Community//

3 Steps to Take Today to Sell Your Business for Top Dollar Tomorrow

by David Finkel
We use cookies on our site to give you the best experience possible. By continuing to browse the site, you agree to this use. For more information on how we use cookies, see our Privacy Policy.