Creating Sellability

 

If you are like a majority of business owners you have given some thought to leaving your business (71% of business owners have according to Deliotte).  Maybe this has been a rather random thought as you catch up on email or a "lock the door and walk away" reaction after a particular hard day.  You likely think about this more seriously when you reflect and realize that most, if not all, of your retirement wealth is wrapped up in your business.   In the back of your mind you may question if your business can even be sold.  

 

Unfortunately, the answer is probably not. Nearly 80% of businesses for sale are not sellable. The primary reason for this is that most owners do not make a conscience effort to plan and manage their businesses with that outcome in mind.  You should manage and operate your business like you are going to sell it in the future.  Building a sellable business from the get-go is a much smarter idea than trying to retrofit a business when you finally decide you need out.  The sooner you start putting plans in place the more options you will have when the time to transfer out rolls around.    

 

It is incredibly hard to create a business that is attractive to external buyers, demonstrates proven growth and profitability, and is sustainable into the future, while attending to the day-in and day-out challenges your business throws at you if you don't take the time to develop a strategy to do this.  

 

There are 4 key areas business owners need to focus on and these areas form the foundation to building a business that has sellability.

• Growth - The ability of a business to demonstrate solid, purposeful growth in the areas of revenue, customers, capabilities, and profits, are essential to Sellability.  A solid business model and clearly defined lead generation and fulfillment strategies will be more valuable than growth achieved though luck.
• Profitability - The capability of a business to manage and achieve profitability makes it attractive to a potential buyer.  Understanding the margin aspects of all products, services, customers and employees is critical in establishing the sellability of a business.
• Sustainability - An attractive business will be able to show evidence of how the growth and profitability can be sustained.  Sustainability in this case centers on the transferability of relationships and the ability for you to transition your role and responsibilities to a new owner.  If your business is only worth something as long as you're run it - it's not going to be worth much to someone else when you decide you want to leave.
• Risks - Business is all about risk.  Businesses that can demonstrate strategies to identify, manage, and mitigate their risks are going to be more attractive than those that can't.  Legal, financial, intellectual property, licenses, and general business risks like competition and environment all must be considered.

A focus on these four areas can be used to move a business from one that is "decent" to one that will be attractive and Sellable.  By using these structures as the framework for managing your business you can prioritize actions, understand how those actions impact your long and short term plans, and gain greater control of your business. The result will be greater clarity and confidence that your business will be your key to your future wealth and lifestyle goals.

 

For more information, visit our website.

 

 

Coordinated Marketing Strategy Contributes to 80% Growth

 

We Train Adjusters (WTA) has seen a substantial increase in on-line sales since beginning the implementation of its marketing strategy in November of last year.  Through its website www.wetrainadjusters.com,  the company offers low-cost, no-risk property adjuster training that allows individuals and insurance companies access to licensing, certification and knowledge in an on-demand, learn at their own pace, quality environment.  "We believe our students are learning skills that will help them grow within the adjuster profession or in some cases re-enter the workforce" say Scott Hutton, President of WTA.  "If the 2011 hurricane season is as bad as predicted we'll be thankful to have these newly trained and licensed adjusters in the field".

The implementation of their marketing strategy has resulted in more coordinated marketing effort and demonstrated growth.  Q1 on-line adjuster course purchases increased dramatically (80%) over Q4 of last year and are more than double (116%) the total for the same quarter of 2010.