Guest BLOG by: Cher Cunningham, Podium Prosperity Group www.podiumprosperity.com
TwoGreySuits is excited to partner with Podium Prosperity Group to bring resources and content that help you take your business to the next level.
Podium Prosperity Group is committed to leveraging a unique blend of coaching, consulting, and financial services to help small business entrepreneurs grow businesses and lives they love.
With a focus on sustainable business growth across the lifespan of the business, our team of experts works with businesses who have grown bigger than the owner can manage (without burning out) plot their course to profitability that fuels growth, financial freedom, and time freedom.
Podium Prosperity Group’s Fix this Next is a free online assessment that will help you see what’s missing in your small business. Step one of building a business that is sustainable and built to sell is understanding what needs to be focused on right now—so that you can work on your business instead of just in your business.
Knowing what to do next is one of the things that stalls businesses and keep the owner in putting-out-fires mode instead of building the value of the business. Nobody wants to buy a business that’s on fire.
Did you know that almost 70% of companies put on the market today fail to sell?
And it’s not because those businesses couldn’t have been sold. It’s because they weren’t ready to be sold. In the world of business mergers and acquisitions, long-term thinking and years-out preparation is essential.
You may have heard the business aphorism that “failure to plan is planning to fail,” yet most entrepreneurs (about 83%!) fail to plan exit strategies into their business plans and hit “ready to retire” age with no plan for how they’re going to do it.
They may hope that a son or daughter will be interested in taking over, or that they’ll happen to find the perfect employee to leave it with. They might just figure they’ll cross that bridge when they come to it.
“No One’s Going to Want to Buy My Business”
See, small business entrepreneurs tend to have a lot of resistance to the idea of selling their business. They don’t believe someone else can do as good a job as them, or they’re too attached (the “it’s my baby!” syndrome of entrepreneurship), or they don’t believe anyone would want to buy their business.
Let me tell you the story of Ms. Jones and her plumbing business (real client but names have been changed).
I was in a conversation with Jenny Jones and the topic of exit planning came up. To my surprise, Jenny stopped me and said, “Nobody is going to buy my business.”
I cocked an eyebrow. “How did you get into your business?” I asked, though I already knew the answer.
“I bought it.” She replied sheepishly.
Cue the laughter… but this is NOT a one-off occurrence. This is an all-too common discussion we have with clients. Of course, it is even more common with business owners who built their company from the ground up.
Do you have a business exit plan?
The thing is, every entrepreneur exits their business at one point, and in one way, or another. Ignoring that truth is a massive oversight in terms of business planning and strategic decision-making.
Will you sell to a family member? An employee? A potential market buyer?
Will you close the business when you’re ready to retire?
Or are you and your business “till death do us part?”
Just like keeping an up-to-date will, it’s vital for entrepreneurs to have an up-to-date exit plan.
And whether you think your business is worth anything or not, a salable business is within reach.
Maximizing Valuation and Salability = a Business with Profit and Time Freedom (AKA – a business that’s valuable, and enjoyable to run)
The good news is that you can start making your business more valuable right now.
And the first step… is to streamline your business processes so that you can step out of operations.
When we say to clients, “Know that thing that you do so well? The reason you started your company in the first place? You need to stop doing it,” we’re often met with some initial resistance. Some few are eager to get off the jobsite or out of service delivery, but many are not.
Now let’s be clear, there is nothing wrong with creating an income for yourself, but that is not building to sell, and most entrepreneurs didn’t start their businesses with the intention of making the income they’d make working 40 hours weeks for someone else.
The small business owners we work with became entrepreneurs because they wanted to create something, and because they wanted that creation to generate meaningful time and financial freedom.
It’s time to do that.
So what makes a business salable?
The value of your company is dependent on three things:
- how effectively and efficiently you run it (your know-how)
- your profitability at the gross margin and bottom line (free cashflow), and
- the underlying data that you collect and use to produce that efficiency and effectiveness (your systems)
That all resolves into what we in the finance world call Goodwill.
But for our purposes, Goodwill is the future cash flow that a buyer thinks your business will generate in the coming years – the money it’s going to generate for them after they buy.
And that’s what you are trying to create when you’re working to increase your business’ valuation. Recurring business, great team members, solid processes that produce consistent quality results, your market share, awareness in the marketplace, proven successes year on year. All of these build credibility and trust that your business is solid and worth buying; that the Goodwill is “real.”
And all of these seem pretty desirable whether you want to sell or not, don’t they?
That’s because people want to buy a business that works, just as much as you want to run a business that works.
The great news is that everything you do that creates a saleable business, fuels your life today. Getting your business profitable and running like clockwork is the first step. As you can imagine, that kind of business is a lot more enjoyable for you to run too. So much so, that you would want to buy it yourself!
So, the sooner you make your business Built to Sell, the more rewards you reap yourself – now and in the future.
This all sounds great, but where do I start?
Take a look at your business. Where are your biggest struggles right now? Where is your business taking the most from you? What are the fires that you’re regularly putting out?
No one wants to buy those challenges.
You can start trying to tackle those yourself, but more likely, you’ve tried and tried and those challenges persist.
In that case, Podium Prosperity Group’s Fix this Next is a free online assessment you can access right from our home page that will help you see how to dial into your most vital next step and take action. Or you can reach out for an Alchemy session with the Podium Prosperity Group team to identify the gold in your business and the bottlenecks getting in the way.
You can build a salable business. You can build a business that loves you back. You can achieve the time and financial freedom of your dreams.
Reach out today.
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Our website is built on the premise that if you truly see the value and want to manage people professionally, using our tools and information, you will see increased employee engagement levels over time, a win for everyone!