Starting a business is no small feat and building it to a point where it can be sold for a profit is even more challenging. However, according to a recent article by Entrepreneur magazine (https://www.entrepreneur.com/starting-a-business/selling-your-business-do-these-6-things-right-now/447711), building a business that can be sold is building a better business now, whether you plan to sell or not. Here’s why.
First, let’s understand what it means to build a better business. A better business is one that is profitable, efficient, and sustainable. It has a clear mission, a solid brand, and a loyal customer base. It has strong financials, streamlined operations, and a strong team.
In short, it’s a business that is set up for long-term success.
Now, let’s look at why building a better business is also building a sellable business. When a business is profitable, efficient, and sustainable, it becomes attractive to potential buyers. They see the potential for future growth and profitability, and they’re willing to pay a premium for it. In other words, a better business has more value than a struggling one.
But even if you don’t plan to sell your business, building a business that is sellable has many benefits. For starters, it can help you weather tough economic times. A profitable and efficient business is better equipped to handle market fluctuations and other challenges that may arise. It also makes your business more attractive to potential partners, investors, and employees.
More importantly, building a sellable business leverages you as the entrepreneur – the focus is on your team, your customers and your systems.
So, what can you do to build a better, more sellable business? According to the article in Entrepreneur, there are six key things to focus on:
1. Streamline your operations: Look for ways to cut costs and improve efficiency in your business. This can include automating processes, outsourcing certain tasks, and implementing better technology.
2. Build a strong team: Your business is only as strong as the people behind it. Invest in your employees, hire the right people, and create a positive company culture.
3. Focus on your brand: Your brand is how customers perceive your business. Make sure it’s consistent and strong across all channels.
4. Improve your financials: Keep track of your finances and look for ways to increase revenue and reduce expenses.
5. Diversify your customer base: Relying on one or two major customers can be risky. Look for ways to attract new customers and diversify your revenue streams.
6. Have a clear exit strategy: Even if you don’t plan to sell your business, it’s important to have an exit strategy in place including reviewing buy/sell agreements with partners. This can include succession planning or preparing the business for a potential sale down the road.
By focusing on these six areas, you can build a better, more sellable business.
Another excellent resource is the book Built to Sell by John Warrilow (https://builttosell.com/).
Even if you don’t plan to sell, these strategies will help you create a more sustainable and successful business for the long term. So, start building a better business today, and who knows? You may end up with a valuable asset that someone else is willing to pay top dollar for.