Maodong Xu Shares the Art of Building a Business to Sell

Maodong Xu has learned the strategies and steps to building a business as an investment and leveraging its success for the best-price outcome in a merger or acquisition. Through his own business building prowess, he’s created his billion-dollar fortune and established himself as an entrepreneur other business owners look up to in their search for success. 

“Understanding that business must first be a business is key,” says Maodong Xu of the smart strategies for building a business to well. “It is when we internalize and personalize the business too much that we are unable to build it and hand it off into someone else’s hands. We cling to what is and have no foresight into what could be. Owning a business and becoming an entrepreneur look different in important ways.”

When an owner’s emotional attachment outweighs their business sense, making the best decisions to position a business for acquisition is nearly impossible as judgment clouds and there is no objective approach to moving forward with a business sale. For those looking to sell cleanly, it’s important to begin with that outcome in mind.

What is the Foundational Step in Creating a Sellable Business?

To start a business that will sell well, you must prioritize its profitability and prove your business model. From day one, the goal is to make a profit. Maodong Xu sees business owners too often living in the red with the hope that the future will bring profits. Risk is often important, but an effective and efficient path toward profit must be top of mind. 

When a business can turn a profit almost immediately, scaling becomes the easy, natural next step. Understanding your business model and that it will often need to evolve and change from your first inclination to actual implementation is vital. Your marketplace must show interest at the right price point for you to see the profit you need, and this means flexibility.

Make smart, objective choices that weigh the options and move your business in profitable directions. While the business you set out to build is rarely what you intended, the best entrepreneurs are able to use their knowledge of the market and innate intuition to be flexible, take the right risks, and keep their finger on the pulse of business profitability. 

How Do You Build Your Business as an Attractive Acquisition for a Buyer?

While all initial business endeavors require a hands-on owner, the goal is to remove yourself from the day-to-day and put in place the right team to move your business forward. Hire the right people, the trustworthy people, and teach them everything they need to know to make your business perform. The stage of complete owner immersion is often prolonged as owners cling to being involved. The exact opposite is found most effective when building a business that holds a return on investment when you sell it. 

Take a step back from the day-to-day, no matter how hard it seems. Chances are, the change will feel uncomfortable, but the truth is, for your business to sell well, you cannot be the reason it keeps going and scales. You can be the wisdom behind that reason, but your team must move the needle forward and create a sustainable model that works for you. 

How Do You Sell the Business, Not Yourself?

Maodong Xu is an expert at transitioning his well-built businesses through acquisition by larger companies. “The secret,” he says, “is selling your business; not your expertise, and not your day-to-day involvement. The business is its own organism, separate from you but informed by your knowledge and successes.”

Smart business owners know that selling a business should entail removing themselves from the business, unless a former merger agreement is in place. The business you built should be able to run on its own, separate from your regular involvement. If you cannot speak to the business as its own entity, separate from you, then the chances of making the right sale and moving forward are minimized and it’s likely you’ll end up continuously involved if you don’t set the proper transitional expectations. These include the personal strength and lack of ego to let go and let your business sell well.

When you remain in the business by convincing buyers that you are an essential component, then you will most likely be expected to stay with the business in some capacity to close the deal. Selling yourself with the business functionality may feel like a great ego boost, but it can leave you stuck in a role within a company after your time should be done. 

As Maodong Xu has proven over and over, selling your business and walking away completely requires focus on building thriving businesses that don’t require your daily involvement and expertise. This allows you to remain free, unshackled and in pursuit of your next great business venture.  

About Maodong Xu

Maodong Xu’s fortune is based on making smart business moves and selling his thriving businesses to the best possible buyer. He is an inventor, entrepreneur and billionaire responsible for new technologies and systems that have changed the world for end users and the tech market at large. For over thirty years, he has worked in various companies, innovating tech and sharing his genius with other companies that acquire his companies.

Born in a small fishing village in 1967, Mr. Xu grew up in Rizhao in the Shandong Province of China. He is a graduate of Wuhan University of Technology, receiving his degree in computer applications and automation in 1990. Through his many business ventures, in China and the United States, Maodong Xu continues to leverage his genius and better the world.