To Sell A Business, First Be A Buyer. Or At Least Act Like A Buyer As You Carefully Examine And Analyze Your Business.
This is age old advice to anyone selling anything. You need to put yourself in your customer's shoes. If selling a business is your goal, first be a buyer. Doing this will supply you with invaluable insight into the strengths and weaknesses of your business. You can then decide to remedy the weaknesses, or just accept them. And here is what you need to do.
Start from the top. A top down approach is usually best. And the top is whether your business is profitable. Does it make money in addition to providing you with income? What kind of return does it provide on the capital employed? Will it enable a prospective buyer to achieve a reasonable return on his capital, after paying himself a salary as its manager? If it doesn't, you need to discover why it doesn't. With that information, you can decide whether remedial action is needed. Remember, be a buyer.
Don't become unnecessarily alarmed if you are not happy with the initial results. Treat it as a call to action. There is usually no great mystery about any of these things. In most cases it is not rocket science. There are usually lots of clues pointing to the action needed. You just need to learn to see them and interpret them.
Any business can be viewed simplistically as the sum of its key systems and processes. At this point you may want to interject that your business is really different. And you are nearly right. It is different. But it is not so different that using this model to analyze it isn't practical. Remember everything you do as you prepare your business for sale must be practical.
Remember that you are being a buyer, analyzing your business. You want to uncover strengths that become bragging rights. You also need to uncover weaknesses that might prevent a sale. Or, at the very least, these weaknesses can have an impact on the price you can expect from the sale of your business.
What if you find that you are unable to have the needed relentless objectivity? You will need to have an objective friend or independent third party help. You may need to get a professional to help you. If you need to engage an outside professional, be careful in making this selection. As you will see as you read further, this individual will need to be comfortable examining several areas of your business.
You need to examine the scope and effectiveness of your key business systems and processes. Be a buyer as you do this. That includes determining whether they have been formalized, or whether they have evolved informally. Does everyone apply it? Is it always applied the same way? If not, why not? And frequently overlooked, is determining what systems and processes should be there but aren't.
These are the fundamental building blocks that are key to making your business run smoothly. Their detailed analyses also provide a marvelous opportunity to trouble shoot systematically. Or an opportunity to strengthen your arsenal of reasons to support your asking price. A subject that we will discuss in greater depth, as we get into this in more detail. Remember to be a buyer as you do the analysis.
A more detailed discussion of each of these important building blocks, can be found by reading the following. Remember, it might appear that not all of these apply to your business. Although each that is applicable to your business, will have a bearing on performance. Some may have a much greater overall impact than others, and you will need to apply your informed judgment to interpreting results.
You probably remember things better if they have unique names. So your ruthless analysis of each of the important building block processes will be named. These analyses are the
Customer Service Audit
As mentioned earlier, one or more may not apply to your business. However, before you dismiss the possibility, be sure that you don't have or shouldn't have a process dealing with much the same activities, that has a different name.
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