Tuesday, 29 January 2013
Some Businesses Can't Survive Without the Owners
Buyers for businesses like these may see very little value.
Some businesses are in greater demand than others. This means they’ll sell quicker and the Seller will receive a good price for the sale. Other, less desirable businesses will not sell, or when they are sold will sell for less than the owner expected. There are many factors that impact the sale and value of a business; many are obvious such as cash flows, demand for product/service line, proprietary product or technology. Another not so obvious, but equally impactful is the role of the exiting owner. Business owners who do not delegate need to make a strong effort to have experienced people in place before they ever try to sell their companies.
This takes time, effort, and in most cases an investment of money to get it right. And if you are nodding your head in agreement, these are the same reasons why buyers see additional risk with businesses with too much owner involvement.
Start by doing the following:
· Identify up to 3 Key Objectives you have for your business in the next 3 to 5 years.
o i.e. double sales, open in a new market, add a new product or service line etc.
· List the 5 to 10 Strategies that will need to be implemented to achieve your Objectives.
o i.e. add to the sales team, improve customer satisfaction surveys, new product research, etc..
· Outline the 10 to 15 Performance Standards that will keep you focused on your Strategies. They need to be measurable, with time lines, and you must hold yourself accountable to your performance.
o i.e. monthly sales training, inventory turn rates, margins, etc
Now look at what you’re doing over the next 2-4 weeks. Literally write down every task, every job, every email and phone call you make. Record the time and purpose of the task.
When complete, compare what you have been doing and what you need to do to achieve your Key Objectives. You’re likely to find things that align and things that do not.
Now the hard part. Take all the tasks and responsibilities that do not align with your Key Objectives and look at the people you currently employ (or perhaps outsiders) for help. Implementing a strategy to delegate will likely be hard at the beginning. You’ll need to continually remind yourself of your Key Objectives and why you are forcing yourself away from doing everything. Plus, you’ll need to coach, guide and mentor those who are taking on the new responsibilities. It will take time, effort and in most cases an investment of money to get it right. But you will, and you’ll thank yourself in the end!
Do you have a small business question you would like answered about this article or others?
Bill Sivell is a salesperson with VR Windsor Inc. [www.vrwindsor.com] 519-903-7807, which sells businesses to buyers across Canada and around the world. His 14-year career includes diverse senior management positions in marketing, advertising, sales management and operations management. His blog appears every Tuesday.