No, I’m not asking if you want to sell your business. I’m telling you that you need to make sure your business is sale ready. That is of course if you’re interested in creating value with your business.
Sale ready means your business is something someone else would want to own. Sale ready means that you’ve done things to create value in your business. It means that you’re doing things right as well as doing the right things. It doesn’t mean that you’re about to start marketing your business to a new owner.
Start with yourself.
You want to make yourself operationally irrelevant in your business. This doesn’t mean that you’re going to stop working; it means that you’re not needed for day-to-day operations to be great.
One of the first questions a buyer is going to ask is, “how important are you in making the business run?” The more important you are, the less valuable your business is to a buyer. The more important you are, the less time you have to work on the important strategic issues that make your business great.
You want to be a passive owner. You want to decide what you want to work on and where you can add the most value. This will make buyers want to own your business. It’ll also make your business more successful today.
Think about how big your market is.
One of the hardest things for a business owner to do is to say no. Saying no to a potential customer is tough. If you don’t learn to do this I can guarantee you’re not being effective and efficient in your company.
Companies who think they have to service anyone who wants to buy from them are inefficient. Companies who realize they can’t be all things to all people are companies that others want to own. They’re also companies that make lots of money.
Have you systematized your business?
Lots of times owners like to make things up on the fly. I can promise you that your employees don’t want to do this. They want to know what to do. Your employees want to know what excellence is in the work they do. The only way they’re going to know this is by having systems that work.
You don’t want systems so tight that they box people in. You want to have systems that allow your people to do the right thing for both your customers and the business. One of the questions I always like to ask is, “How can I make your job easier and create a great experience for our customers?” If you can answer that, you’ll likely find systems are at the center.
Do you have a dashboard that gives you great information?
If you’ve done a good job of becoming a passive owner you’re going to want to monitor what’s happening on a daily, weekly, and monthly basis at your company. This is where having a great dashboard comes in. Owners that have great dashboards don’t get nasty surprises. If things start to move in the wrong direction you want to know who to call and who to hold responsible. You need to start with information that let’s you know what’s going on.
Are you doing the two things all owners need to do?
There are two things that all owners need to do to make their businesses sale ready. The first is making sure your business is providing products your customers want to buy. The second is making sure your business is achieving an adequate return on investment. No matter how good you get at delegating you need to keep these two things as your responsibility. It’s really what buyers and more importantly you want.
Taking care of the five things above will make your business interesting to buyers. It’ll help make your business more successful today. Businesses that are always sale ready have more options. Isn’t that what you want?
Part of having a business sale ready is knowing where your strengths and weaknesses are. We have a survey that will help you with this question. It’ll review eighteen areas of your business and give you a down and dirty report on where you stand. The good news is the survey will only take ten minutes of your time. To get started, click on the button below for our CoreValue report.