How Can Six Sigma, That Sounds Like It Is Direct From A SciFi Story, Help You Prepare To Sell Your Business?

First of all, what is Six Sigma? One definition that I like is "a disciplined data-driven approach and methodology for eliminating defects in any process--from manufacturing to transactional", and anything in between. Not the use of the word process. As you visit other parts of this website, you will find that the words process and system are used quite frequently. <<


This approach forces you to consider the various components of your business as processes. They are not just things that happen randomly, or at least shouldn't be. They are organized activities capable of being measured and adjusted/improved. The focus of this measurement and adjustment is to make ongoing improvements to the various processes.

The term six sigma implies that such significant improvements have been made to a process that the failure rate, is six standard deviations away from the mean. To put that in perspective it means 3.4 defects per million. In quality control speak the quality would be so good that you would only reject 4 units per million manufactured.

Why do you care? You probably don't think in units of millions other than revenue. The reason that you should care is that in order to measure a process, you need to have one. So start there. If you haven't already done so, separate your business activities into the various processes that they represent. Formalize them. Document them. Follow the documentation. Measure the results. If there is room for improvement, look for ways to do it better.

You don't need to become a six sigma expert, nor seek six sigma certification. You merely need to apply the most basic of the underlying concepts to working on your business. Keep in mind the advantage that franchisees enjoy. They get to use systems and processes that have been continuously refined and improved. They bought the franchise partially because it provided them with these systems. Since six sigma is a concept and practice developed by Motorola, go to Motorola for information on Six Sigma Certification.

You need to think like a franchisor. You want to sell your business, which can be considered to be a franchise operation with only one location. The golden arches has thousands of locations. But the importance of defining systems and processes, and then going about a six sigma like methodology to improve them cannot be overrated.

To make your business stand out from most others, because of the efficacy of its systems and processes, you don't need to achieve six sigma level. You merely need to have proven, effective systems and processes for all critical business activities. Starting with those that attract and retain customers, and generate revenue.

Remember to think about your business as if you were going to be a buyer. You have a head start because you know the areas that are most prone to difficulty. Make sure that you work on supporting systems and processes for those areas. Work smart so the things you do bring you the best return on your time. Remember the old saying of First Things First. Fix the worst performing process first. And then the next worst, and so on.

Let's revisit your reason for doing this. You want your business to stand out from the crowd when you are ready to sell. But even before you sell, thinking and acting this way will make it more profitable. When you are in the sales transaction, you will be able to help prospective buyers have much more confidence in their abilities to operate the business as well as you have done or better. Proven effective systems and processes for all critical business activities will show them that success has been driven by systems and processes. And not by your brilliant and inspired ongoing performance. A system designed by a genius to be run by idiots.

Preparing in this way will make selling less stressful for you It will also make buying less stressful for your prospects. And it will make needed capital to finance the transaction easier to access. You will provide lenders with confidence in the ability of the business to repay the loan.

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