Did you know that less than 10% of small business owners are successful in selling their business?
Many business owners work hard to grow their business, but often forget to plan for the day they want to sell. This can cause problems later on. Did you know that less than 10% of small business owners are successful in selling their business? The main reason for this is because they had a solid exit plan. In this article, we’ll show you how to avoid this problem and make your business saleable and valuable.
How to build your business with sales in mind
- We can do the job without you
- Build a brand that doesn’t depend on you
- Keeping Your Finances in Order
Step 1: Allow them to do their job without you
Buyers are looking for businesses that can operate without an owner, which means there are clear systems and processes in place that the team can follow. “No one wants to buy your business if you’re just doing fulfillment,” says Nathan Hirsh, who founded and sold FreeeUp.
Expert Tips:
- Every step in your business, from onboarding new customers to running your daily operations, should be written down into standard procedures. Every step should be clearly written, easy to find, and easy to follow.
- Use tools to automate repetitive tasks, saving time and reducing errors.
- Make sure your team can run the business without you. A business shouldn’t depend on one person. Taking a few weeks off shouldn’t disrupt the business.
Leona Watson’s Story:
Business owner Leona Watson explains that she “needed to separate myself from the business.” She did this by working out in the morning and not going to the office until noon, so that “I wasn’t interrupting my team.” And instead of “always haphazardly going through the motions and wondering why they were always bothering me with questions that were easily answered,” she created procedures. The business moved from being in her head to being in documents that others could use.
Your action steps:
Spend an hour each week writing out three processes from your business that you can delegate to your team or automate.
Additional resources:
This is one of the most-read Forbes articles about how I expanded my services.
Step 2: Build a brand that is independent of you
Small businesses often rely heavily on the owner for sales and marketing. But if you want to sell, your face can’t be the brand for your business. Like Michael Hyatt, who recently rebranded his company from “Michael Hyatt” to “Full Focus.” “The company has grown beyond my name,” he explains of the name change. “I’m proud of how far we’ve come and excited about the direction it’s going in. With our commitment to continued growth, this is a natural next step to make our company even more successful.”
Expert advice:
- Create a brand that is separate from yourself. This includes tactics like using your product name instead of your personal name on all marketing channels, including your website, social media, and brochures.
- Showcase your team and their skills in your marketing materials, which shifts the focus from you to the business as a whole.
- Make sure your customers keep coming back because your business is doing well, not just because they like you.
Photographer Sue’s Story:
Sue Brice has built a million dollar business based on her unique photography skills. She’s always thinking about ways to separate herself from the business. In a recent podcast interview, she shared the quote that has had a huge impact on her business: “I’m not that important.”
Your action steps:
This weekend, as you think about your business brand, remember Sue’s words: How does it connect with your personal brand? Write down one way you can make your business appear more independent.
Additional resources:
Here’s a 3-step guide on how to transition from a personal brand to a business brand.
Step 3: Get your finances in order
To sell a business, it needs to be financially sound. Buyers want a business that is profitable, has a good financial record, and can grow.
Expert Tips:
- Keep your financial records organized and up to date. Use accounting software to accurately track your income and expenses.
- Focus on profitability, not just revenue. High revenue doesn’t mean much if margins are low.
- Check your financial statements regularly to spot any problems early and ensure your business can continue on its own.
Your action steps:
The next time you meet with your accountant, take a few minutes to review your financial records. Are they accurate and up to date? Look for areas where you can save money or create efficiencies to increase profitability. You’d be surprised at how much you’re paying for subscriptions and licenses that no one on your team is using.
How to build something that sells
Now it’s your turn! Follow these steps to build your sales-oriented business:
- document One process in your business this week.
- decide One way to make sure your brand isn’t dependent on you.
- review Take stock of your financial situation and find one area you can improve.
Look back at these tasks and consider how they can help you turn your business into a sellable asset.
Conclusion
Building a business with the intent to sell isn’t just about having an exit strategy as your end goal. It’s about building a solid, independent, profitable business. Following these steps will help ensure your business is attractive to potential buyers. The biggest mistake business owners make is not building their business with the intent to sell. Avoid this mistake and prepare your business for a great exit strategy.
