At The Private Business Owner, we’re all about sharing information that helps companies become buyer ready. Because business owners want to get the greatest return on their investment, we’ve compiled five simple new year resolutions that will prep your company for the day you decide to exit.
1. Write your goals down.
We’re all guilty of blurting out our desires but rarely recording them. There’s something about putting those words on paper that makes them more real. When goals are just spoken, they’re floating in the air, but writing them down makes them tangible.
Let’s say that your goal is to increase revenue by 10 percent in six months. If your company hasn’t achieved that by the end date, it’s easy to let yourself and youroff the hook with excuses like “We weren’t really trying to achieve that anyway.” A hard-copy document of your business goals shows your commitment to achieving them and also serves as a reminder when you need to check your status.
If you want to sell your business and get the maximum value, your business needs to be able to stand on its own without you. This is an important point that M&A consultants and advisors stress again and again, mainly because buyers are purchasing your company’s future, not its past.
What does this mean fornow? Your staff needs to have the ability to run the business while you’re out. If you can’t take a vacation and have business continue as usual, you need to start delegating. And if you have no one you trust to delegate to, you need to hire solid mid-level managers. Buyers look for companies that are not owner-dependent.
3. Get rid of unproductive employees.
No one said being a business owner was easy. Firing is part of the job. If employees are given the tools and support to contribute positively to the bottom line and still can’t find a way to do so, then it’s time for them to go. You can either fire them or find more appropriate responsibilities that take better advantage of their skill sets.
If you don’t rid your business of bad employees, your company will never grow. Plus, slackers can affect the corporate culture – and not in a good way. Remember that with unemployment as high as it is right now, there are literally hundreds of very qualified folks out there that would probably go through brick walls for you given the chance. There’s no need to carry “dead wood” in today’s .
4. Do not substitute a lower price for a realstrategy.
This little tidbit comes from entrepreneur Barry Moltz. The pricing war is one that you will not win. Besides hurting your bottom line, you’re driving down the cost for goods or services in your entire industry. Know what your products or services are worth and stick to your guns. You’ll get more respect from your clients and you’ll get higher-quality clients that value your services, too.
5. Get over the state of the economy.
It’s easier to accept the situation and focus your energy on finding a solution than it is to whine and complain. You can’t control the markets. What you can control is how you behave in this marketplace. You’re not the only one that has to compete in tough conditions. Find a way to make it work or your competitors will. It really is that simple.
To be a successful sell-side M&A professional, you have to understand business. So we were excited when Generational Equity president Ryan Binkley took his years of business experience and captured it in a concise whitepaper that is written with the end game ofa business in mind. It is called “Building And Exiting A Desirable Business.” Download it today.