An excerpt from my article featured on www.startsatsixty.com.au talking about popping Buyers Goggles on to investigate all the different buying opportunities there are…
Many people think that the typical small businesses offered for sale are only those such as cafes and other food or retail outlets, however almost all types of businesses do come up for sale at some point in time. (There is of course the option of tapping an existing business owner on the shoulder and asking them to consider thinking about selling as well).
I strongly encourage you not to make a decision about starting a business until you have investigated what the market has to offer, to see if there are businesses available within the area that you are interested in. By buying, this will enable you to “jump” into a revenue-generating business and leverage off the hard work already undertaken by someone else.
Unless you are looking at developing and delivering something unique into the market place, or you have previous experience to take a start-up business to a stage where it is profitable in a short time frame, buying an established business will generally be more instant, attractive and financially rewarding.
Warren Buffett famously invests in businesses that have what he calls a protective ‘moat’ around them – one that inoculates them from competition and allows them to control their pricing.
Big companies lock out their competitors by out-slugging them in capital infrastructure investments, but small businesses have to be smarter about how they defend their patch. Here are four ways to deepen and widen the protective moat around your business:
Create an army of defenders
Ecstatic customers act as defenders against other competitors entering your market, a factor that has enabled many businesses to defend their market share in their market.
Get certified
Is there a certification program that you could take to differentiate your business? For example, a RTO (Registered Training Organisation). It was a lot of paperwork and training, but the certification process acts as a barrier against other people jumping into the market and competing in the same way.
Get your customers to integrate
Is there a way you can get your customers to integrate your product or service into their operations? Can you offer your customers training in how to use what you sell to make your company stickier?
For example, like how you use a Customer Relationship Management (CRM). Once the CRM of choice is creating a weekly sales funnel in a CRM platform, it harder to convince you to move to another. That’s what you want your product or service to achieve.
Become a verb
Think back to the last time you looked for a recipe. You probably ‘googled’ it. Part of Google’s competitive shield is that the company name has become a verb. Now every time someone refers to searching for something online, it reinforces the competitive position of a single company.
Is there a way you could control the vocabulary people use to refer to your category or specialty?
Widening your protective moat triggers a virtuous cycle: differentiation leads to having control over your pricing, which allows for healthier margins, which in turn lead to greater profitability and the cash to further differentiate your offering.
Which makes it even more Saleable when the time comes…
Interested in knowing how your business rates at this point in time?
Opt-in (over there ->) and receive the TEMpter which will take you through a checklist to ascertain just how ready your business is to sell right now…
The powerhouse of motivating mum’s, Alli Price, invited me to speak on one of her recent Google Hangouts. Once I got the technology sorted (!), it was all systems go and it is now proudly displaying on her youtube channel. Please, go check it out…
http://www.motivatingmum.com It’s great launching and running a business but your eye should always be on the prize – selling your business successfully! Check out these great tips from Denise Hall, The Entrepreneurial Mother
On this one I talk a lot about FREEDOM.
Why did you start your business in the first place?
How well is that working for you?
What are you going to do about it if it is not working out as planned?
Recently, this article was published on the Australia Small Business Blog, with my contribution focused predominately on the benefits of using a Business Broker, like my good self:
“If you are going to be dealing with a business broker, make sure they are licensed with the relevant State body. The Australian Institute of Business Brokers (of which I’m a member!) has links to the various State licensing authorities. When exiting your business, you should seek some professional advice – however even an accountant or solicitor have limitations on the scope of the guidance they can offer around the valuation and sale of a business.
A qualified business broker can help in many ways. They will prepare you for the due-diligence that a buyer conducts. They know that a buyer or investor besides looking at the current profitability of the business, evaluates the extent to which it can run independently of the seller, as well as examining the scale-ability of the business. In other words, it’s capacity to actually handle growth and maintain profitability with any increase in the volume of sales generated”
Recently, the 2nd of my articles for the motivations magazine.com was published.
Most pleasing! And it goes like this…
During the Retirement and Estate Planning process, “Ownership of Assets” forms part of the discussion. Where one of the assets is a business, and it is a primary contributor to the Estate, it makes perfect sense to ask a number of provoking, asset-protection, risk-minimisation questions.
The questions are best offered from both a proactive and a reactive viewpoint.
Taking such initiative is paramount for ALL business owners who seriously want to successfully transition their business while they 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, to exit, to essentially not run their business any more, whether that be by choice or otherwise.
