In the business world, a misconception exists among owners that a knight in shining armor will come sometime in our business’s future and offer us our dream purchase price. We believe that we’re building such an exceptional business that a buyer will swoop in at some time in the future and make us instant millionaires. That’s a fairy tale, friends. Business doesn’t work that way. If you’re not prepared to exit your company, then a sale won’t happen. It just won’t. Like I said at the beginning of this Building a Sellable Business series, I believe that when you want to sell your business, you should begin at the end. Now that we’ve opened our business and built value in it, we’ve reached our third and final business phase – the sale. In order to reap the capital rewards from the seeds of value we’ve sown, we should actively create […]
Just about every day, I talk to talented entrepreneurs of all ages and stages of life. As I coach these brilliant business owners – doctors, dentists, veterinarians, manufacturers, pool builders, hair stylists, realtors, builders, and the like – I find that almost all of them are masters of their product or service. They do what they do well, but they don’t necessarily know how to make what they do into a successful business. Their educations gave them professional knowledge, but they lack business knowledge. So I help these clients come up with plans and systems to make the business side of their business simple. As I help direct their business’s growth towards its eventual sale, I stress the need for marketing. I’ve realized over the years that successful business owners need a marketing campaign system just as much as they need a business plan and a solid team.
Friends, there’s a way to build the company of our dreams. We small business owners CAN build an awesome team that pulls just as hard as we do toward our business goal of building value in our company in order to sell it for maximum profit. We can assemble our dream team of employees and executives. Once we do, we can cultivate company culture and add employee incentive programs to ensure our team happiness adding to company success. But what happens if employees leave? What can be done to protect us business owners during times of employee turnover or team member changes?
In this Building a Sellable Business series, we just talked about the business risks we entrepreneurs face. To most people, the possible risks seem to outweigh the benefits of business ownership. What makes us willing to face those risks, with market ups and downs, with high-pressure competition, and significant debt? If we’re honest, it boils down to an expectation of success, usually monetary success. If money motivates us business owners, what employee incentive programs could motivate our team members?
A wise person once told me, “Somebody else’s experience is a far better teacher than our own.” I wish I had listened to that advice. If I had understood the vital role of a business risk assessment in the purchase of a business, I might have avoided making the single biggest mistake of my business career.
In this post, I want to look at two of my favorite things in the business world – facts and figures. We’re going to deal with financial reports your business needs to provide to interested buyers. In order to make our business sellable, we business owners have to provide buyers and lenders with accurate financial reports that show our historical growth, our current financial status, and our business’s potential growth in the future.