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Value Creation Blog

Is Your Business Sale Ready? Tips from a Vermont Financial Advisor

Posted by Josh Patrick

No, I’m not saying is your business going to be sold tomorrow.  I’m assuming it’s not.  I’m asking whether your business is sale ready.  Sale ready is when your business could be sold but you’re not interested at this time.

A sale ready business is when you’ve become operationally irrelevant.

Wouldn’t it be nice if you weren’t involved in every decision in your company?  Do you feel burned out from time to time?  If the answer to either is yes you’re not operationally irrelevant.  You’re just too involved in the day-to-day of your business.

Making your business really valuable means you need to pick your head up and look around.  Your real job is to look for and evaluate great opportunities for your business.  You can’t do this when you only have time to think about getting products out the door.

A sale ready business is one where you have a recurring revenue stream.

If you’ve been in business for over twenty years and every year you start the year off with no business it’s got to be tiring.  A business with recurring revenue either has contracts where business is guaranteed for multiple years or has a system for creating new business every year.

Burn out comes from worrying whether you’re going to have enough business to keep the doors open.  Without recurring revenue it’s almost impossible not to have this worry.  Figure out how to keep your doors open and have no stress.  Its called recurring revenue.

You have great systems in place.

You might like to rock and roll with new ways of doing things.  I can promise you that your employees hate figuring it out.  Your employees want to know what they need to do for success.  They want to know what they need to be doing to be great at their jobs.

Look at the best companies in the world.  They all have systems and procedures for how to deliver great service.  Your experience at Starbucks doesn’t happen by mistake.  Starbucks trains and makes sure their employees know what to do.  Why don’t you do the same?

You’ve developed a strong niche.

When you tell me that the whole world is your oyster I know that no one knows how to find you.  The best privately held businesses know exactly who their customers are and how to serve them.

When you have a strong niche you can service your clients in a cost effective basis.  You know what their problems are.  You know how to help them take advantage of opportunities.  If this isn’t you, ask yourself why you haven’t developed a niche.

Your measurements are forward looking.

Do you know what the early warnings are for things going wrong in your company?  Do you know what are the measurements that tell you things are going well?  A company that is sale ready has a dashboard where the owner can see at a glance how their company is doing.

The numbers that you look at on your profit and loss statement are all historical.  They don’t tell you one things about what’s going to happen in the future.  Learn what forward thinking metrics are and use them.

It’s a great place to be.

If you can answer yes to all of the questions above I’ll bet you love your business.  You probably have no interest or need to sell your business.  You love what you do and you love the people you work with.

If instead you answered lots of questions with no, you’re probably ready to get out of your business tomorrow.  Sale ready is not about selling your business.  It’s about getting your business to a place where you love what you do.

Are you ready to make changes in your business that get rid of burn out, increase your profits and fun?  If so, think about having your business be sale ready.

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Topics: exit planning, business exit planning, selling

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