Using this great article from the Boston Post (Ten Must-Do’s When Preparing to Sell Your House) as a base, I’ve adapted it to fit in regards to your Business…
1. Hire a trusted, experienced Broker. (Full disclosure: I am one.). A great broker is worth the commission, which, after all, is built into the market pricing. Good brokers know how to market and price a business, know the other agents, and should be able to offer valuable insider information.
Plan to interview three or four candidates. Don’t make decisions based purely on what listing price suggestions they give you. Hire a straight shooter. Ask to see references and the past 12 months of their sales. The market data will tell them and you where the business should be priced. Whoever you hire should be guiding you through the preparation process, including most of the below suggestions.
However, make no mistake. Even though you are the one that has initiated the contact and is looking to hire them, if they think they cannot sell your business, they won’t take it on. Seriously!
2. Insist on a professional marketing campaign, and budget money to pay for it. Look at their marketing materials for other businesses. Are the photos good enough to be in a newspaper or magazine? They should be pretty close to it. How good is the quality of the presentation materials? How well presented is the “story?”.
3. Does the broker actually know how to write decent marketing copy? Do they spend money on going above and beyond the norm? Are their materials clean and professional, or are they cheesy and fluffy? For example, are their head shots more prominent than photos of your Business?
4. Listen to your Broker when they give suggestions on how to ready your Business for the market, including bringing in an Exit Strategist (Full disclosure: I am one.). Try as hard as you can to look at your Business with objective eyes. Check other comparable businesses on the market in the price range. No doubt you will feel your Business is far superior than all of them. But you will be wrong. Try to look at them as a buyer with X amount of dollars to spend. Don’t justify a premium on your Business; instead try to figure out why as a Buyer you might look for reasons not to buy your Business versus the others. Make improvements and updates and/or adjust the price accordingly. Your Broker should certainly be tactful, but they should also be honest. You are hiring the Broker as an impartial set of eyes and a trusted adviser.
5. Once your Business is on the market, though, your Broker should be no longer impartial. Your Broker is there to get you the highest possible price, with the best conditions, in the shortest amount of time possible. Think of your Business now as a new product being launched. Your Broker is the marketing team and the head of sales. Their Broker colleagues are the sales force. Their job is to educate and motivate the sales force. If there is a buzz and if the Business is priced well, they will be in their cars and on the phones calling their clients and telling them about the Business as soon as possible.
6. Motivating Brokers is primarily a function of price. But you must put your best foot forward. Think what is the best bang for the buck and do some “renovation”. Maybe it is about painting. Paint hides age. Paint refreshes. Paint modernizes. Paint cleans. Or for a service Business, what is the equivalent of a paint job?
7. For the love of Pete: Wash the windows! or again, the equivalent
8. Do as much as possible to boost your appeal. At the very least, get all your paperwork in order, “shine” anything that can be shone, have everything ship-shape and to hand that a prospective buyer will probably want to look at.
9. Have an Exit Strategist do an “inspection”. But if you are not prepared to fix everything an Exit Strategist advises, you better be prepared to disclose the newly discovered flaws.
10. Tour your Business with your Broker, who should have already been on hundreds of inspections and should know enough to warn you about what may or may not be a potential problem from a buyers point of view.
If you have been lax in some areas, you should price the Business accordingly or prepare yourself to possibly have to re-negotiate when the Buyer uncovers issues. And your Broker should be able to help you judge how reasonable such requests are. Basically, if another buyer is likely to ask for the same thing, you should be prepared to take care of it or a cash adjustment.
“Just as we need strategy for business success, we need to plan for successful lives. Without one, we allow all kinds of forces to push, pull, twist, and turn us into mental and emotional pretzels. Our inability to say ‘no’ pushes us into time-wasting activities; a lack of strategic direction allows us to be pulled down a career path we never wanted; good intentions to volunteer in the community are twisted into negative comments when we’re not able to meet the time commitments; and we’re emotionally turned around when the relationship we let wither finally ends.”
Strategy for Personal Success: Discovering Your Purpose By Rich Horwath for ChangeThis.com
When was the last time you spent any time with your Client List and really thought through the relationship you have with each and every one? Never is not the answer I’m looking for! Now would be a great time to start…
“For any enterprise to thrive, you cannot underestimate the importance of repeat business. The vast majority of senior executives believe that providing good customer service is sufficient to obtain return customers. However, focusing on the service interaction alone is not always enough to generate repeat business; it’s building an emotional connection that becomes the loyalty glue.”
Generating Repeat Business… By Richard Shapiro for ChangeThis.com
I could not let this day go by without acknowledging International Women’s Day.
Whether the role we play is large or small, no matter, we play a very important role nonetheless. I want to personally thank you for your contributions, and long may they continue in the future.
Why not take time out today to reflect on what you’ve done and what you’ve achieved…
And give yourself permission to be Proud. I know I am.
Happy International Women’s Day…
During the life-cycle of building a Mother of a Business, it makes perfect sense to ask a number of provoking, asset-protection, risk-minimisation questions to get YOU, the Business Owner, thinking along the lines of Starting with the End in Mind TODAY, regardless of how old the Business is.
Taking such initiative is paramount for ALL Business Owners who seriously wants to successfully transition the Business while YOU are in the best position to do so. In most cases however, Business Owners will not have commenced the all-important discussion about what to do when the time has come to Finish Unfinished Business, to Exit, to essentially not run the Business any more, whether that be by choice or otherwise.
By thinking through all the elements of an Exit Plan, the payback will be delivered at the time of the plans execution. However prior to that, the benefits are in the proactive nature of the action taken, both in knowing that a plan is in place as well as being actively worked towards.
Where the Business Owner does not want to entertain this discussion at all when in a position to influence the Exit outcome, the Business Owner may instead think it will all sort itself out in the end. To some extent, this is correct. Ultimately, it will get sorted, but in the way YOU the Business Owner had envisaged? Possibly not.
So why is this so important?
In 2011, the state of the market is as follows:
•>1,000,000 Businesses in Australia are operated by 45 year-olds
•Meaning approx 1 in 2 Businesses will be looking to turn over in the next 5-10 years, either by choice or medical reasons
•Of that, > 300,000 are owned by Women
•The Business may be the 2nd largest, if not the largest asset owned, therefore it needs to be handled accordingly.
The following is a series of questions to help start your thinking…
In order for a Business Owner to Start with the End in Mind TODAY, what has to happen?
•Is a Succession Plan in place? If yes, how old is it?
If it had to be executed immediately, does it make sense?
Is it addressing what really needs to be addressed?
•If selling is an option, does the Business appeal to a Buyer in its current form? Is it set up to be able to “hand over” to a third party?
•Does the Business have an online presence? If not, why not?
•How are the Business records looking?
Does the reporting of the Business (e.g.: to the ATO) reflect its complete “value”?
•Alternatively, is now the prime time to acquire another business to help fill gaps, if that’s possible?
Where is the Business at right now vs. where does it want/intend to be?
•If the Business relies solely on YOU the Business Owner then the impact could be catastrophic if the Business Owner is no longer accessible. What steps need to be taken to reduce the risk/potential damage?
•If looking at a Buy option, will acquiring another Business get the Business there more quickly?
•Is there the option to do both ie build/acquire to grow and then Exit once all in place?
Based on where the Business is now, and what is wanted long-term, will determine the gaps to be filled.
When is the right time to execute?
•If selling, what asking price will be required when ready to execute?
•How far off is that, realistically?
PLUS, and equally as important…
•What will you as the current Business Owner do post Exit?
•What will be the implications for business/life partners?
•If the Business is your \”identity\”, what then?
How to Exit? There are a number of possible Exit options e.g.
•Just pack up and walk away!
•Or any variation on above
To make this happen, who needs to be involved? Does the Business Owner have access to the following specialists in Exit?
•Business Advocate (if acquiring)
•Have they considered who might be interested in buying the Business?
None of this has to be daunting! Setting YOU on the path of thinking about Starting with the End in Mind TODAY, regardless of how old the business is that a few of these questions will prompt may be enough.
However, if you’re serious about having this conversation, please contact me…
First published on Westpac Bank’s RubyConnection.com.au…