By Sankeetha Selvarajah
Today's issue is brought to you by Zensei LLC. We help high achieving entrepreneurs get clear on their growth by planning their exits in a mindful, systematic process. If you're an entrepreneur who is looking to exit and scale in a way that fits your lifestyle, sign up for our Zensei Group Accelerator with our discovery call here.
MAYA...and increased Leverage.
In 1934, Raymond Loewy, the great industrial designer was approached by the Pennsylvania Railroad to redesign the electric locomotive and a garbage receptacle.
This marriage of business went on to revolutionize the industrial design landscape. However, there was always pushback or public hesitance on Loewy's interesting creations.
However, Loewy employed the MAYA principle: MAYA - Most Advanced, Yet Acceptable
To sell something surprising, make it familiar; and to sell something familiar, make it surprising.*
Slowly, “repeated exposure of railroad people to this kind of advanced, unexpected stuff had a beneficial effect. It gradually conditioned them to accept more progressive designs.”
This concept of MAYA is an extension of exposure theory. (In psychology, trauma victims are continually exposed to triggers of their trauma to desensitize the magnitude and importance of that experience.)
Why this matters to you:
Now before you start thinking exit planning is traumatic (!) consider this newsletter, The Lotus, for example.
Every 2 weeks, you open your options to build your exit path even further.
Simply by opening and reading an email.
Simply by continued, non-threatening exposure.
Now think of your potential buyer who may be your direct competitor, or your current joint partner or a large private equity firm.
Each of these potential acquirers have different "touchpoints" to your brand and company credibility.
As repeated exposure increases a potential acquisition.
Relationship-based leverage isn't built in a day.
Brand awareness isn't built in a month.
Credibility isn't built in a quarter.
Let's break it down further:
Consistency and awareness create a path for better negotiations, better understanding and BETTER EXIT PRICES.
Buyer psychology mirrors human psychology, because people run companies like their personal lives.
People and company decisions usually gravitate towards the familiar and the "safe".
So, to create an easy connection between your company and the Buyer's acquisition, you must find ways to find common ground.
Common ground can be:
- By showing value so you understand their NEED to increase their company value (and how your company adds to it).
- Researching your potential buyer's markets and trends, and catering to that market.
Simply put, they may not even KNOW your company is a good acquisition unless YOU build that awareness.
Reciprocally, by exposing your company to your buyer, you're also exposing yourself to THEIR needs. By understanding your buyer's needs, you can effectively negotiate higher prices when sale time arrives.
(Or if isn't a good fit, then they may have other partners or associates in their world that can be connected to you.)
Remember, in all aspects, you are still the Alpha in all your relationships.
You are building your exit, one relationship at a time.
Action Steps for this week:
1. Identify your 3 disparate buyers (competitor, joint partner or large, private equity firm) in the next 7 days.
2. Consider your 2 best value propositions to each of them. Ex: Great ROI, unique Product, solid recurring government contracts.
3. Cater different "messages" you want each of them to have a brand awareness about your company.
4. Build rapport now and build consistency by sending updates and stay updated on them. Join them on Linkedin, their newsletter. Sign up for any events and coffee chats.
Be MAYA,
Sankeetha
Exit Term to know: INSTALLMENT SALE
This is a type of payment for a sale (Still has to be an Asset or Purchase Sale Agreement, though). Basically, the Buyer will pay the Seller the Purchase price in installments over a period of time. Buyer still gets 100% ownership of the Company/Asset on the Sale Date, but has to pay off Seller post-Sale Date.
Ex: Lamps LLC did an Asset sale agreement with Blinds R' Us, LLC for all the lamp inventory. Lamps LLC will pay the $5,000,000 Sale price over the course of 24 months.
*Atlantic (2017/18 Winter edition)
Whenever you’re aligned, here is the best way way we can help you:
1. Our Zensei 4 week Group Accelerator is now in waitlist for the next cohort in JUNE. At half the cost of an individual Exit Plan, this allows you and I to co-create a 2 year Exit Plan for 2024 and beyond. Taking a cohort maximum of 6. Every Exiter has a private, 2 hour Exit meeting with me at end of Program and a complimentary 30 day followup. Sign up for a free discovery call here to learn more.
2. Coming soon: Zensei Exit Membership. More next week.
3. Do you want to scale your company faster by planning your exit? Apply for private, full exit planning for 2-4 years here.
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