Your Business Is Worthless if It Depends on You
The title of this post might sound like fighting words for some, I mean, you work and sweat and pour your life into this thing and I have the nerve to suggest it’s not worth anything? According to my guest for this week’s episode of the Duct Tape Marketing Podcast, John Warrillow, author of Built To Sell, only 1 in 100 business owners is successful in selling his or her company each year.
It’s the biggest shame in the entire small business world to think that people slave away at something, oftentimes sacrificing far more in terms of health, family and wage then those employed by BigCo, only to discover that there is nothing to sell at the end.
Creating a business that’s an asset is done intentionally and doesn’t happen automatically, even for very profitable businesses. As Warrillow and I discuss in this session, one of the first keys is to think in terms of building a business that can run without the owner. Any potential buyer is going to look beyond a P&L to discover if the business is really run by the relationships of skills of the owner. If that’s the case, if the owner can’t walk away without any dip in productivity, then the asset is significantly downgraded.
If you find yourself thinking, I want to start a business or I might want to slow down a bit in five years, now is the time to add Built To Sell to your strategy and planning must read list. It’s essential to start setting the value building process and tactics into motion and nurturing a view of your business as a potential.
The first step in this process is to find a way to remove yourself from sales and marketing and product innovation. Until you can successfully do that, you’ll have a hard time convincing outside buyers,
The next very important step is to focus on creating positive cash flow. I know every business has that as a goal, but if you began to look at cash flow as something over and above the debt service the buyer just took on to buy you out, it might look a little different.
Built To Sell is the first book I’ve come across that speaks about building a business to sell in the practical, simple terms that any small business owner can access in a systematic way.
My favorite quote from our interview – “Most small businesses run their business like they watch a movie, they have no idea what the ending will be.”
GoToWebinar is the presenting sponsor of the Duct Tape Marketing podcast.
7 Steps to Scale Your Consulting Practice Without Adding Overhead
The Duct Tape Marketing Consultant Network has helped me to grow my business by over 40% in the last 12 months. ~ Michael Quinn - Michael Quinn Agency, Fargo, ND