How to Sell a Business Quickly – Embrace Change

How to Sell a Business Quickly – Embrace Change

Resistance to Change – A Universal Personal Quality

Change is not something very many people embrace. In fact, it seems that many will flee change as if it were the plague! To prepare a company to be in the best possible position for a business sale or business succession often requires significant changes. Inevitably we will identify paths of action that can potentially resolve those situations.  Equally inevitable, is that these pathways call for some degree of change on the part of the owner.

This will lead to a series of conversations with clients concerning the nature of the changes.  We review the traits of the owner and/or the business that appear to work against the required changes. I ask if they understand these contradictions.  I also ask whether they are willing to embrace the needed changes.

An Engineering Company that Needed to Grow

Here’s a good example of how change can work to the benefit of the owner. This client was a small engineering firm. The owner had a long history of success.

Here were some of the critical issues we identified:

1. Typically he had a small number of long-term clients. Whenever he lost a client it would represent a blow to the company’s stability until a replacement could be found.
2. The owner had tried to address this over the years but without success.
3. He also had specific personal financial goals which were best served by growing the business to its next logical plateau and by getting client diversification in order to avoid the dips associated with major client loss.
4. Finally the owner preferred doing engineering work and did not like doing sales or marketing work.

In order to achieve his personal financial goal he needed to address the company growth and client concentration issues. This implied remedial action in improving sales and marketing – something that he had to be involved with personally and did not enjoy doing.

Are You Willing to Go Out and Sell?

The owner was fully bought in to the overall analysis.  He recognized and acknowledged the logic behind the need to grow and what that would do for his goals. Addressing the change needed from him personally that would put him in the position of getting out and leading a sales/marketing effort was another matter entirely.

Ultimately I had a heart-to-heart meeting with the client and forced the question on him. “Are you willing to get out and sell?” The answer was, “Not really.” This left us with a hole in our planning.

Fortunately, we were able to focus on another of our client’s attributes – a love of teaching. New business for his firm typically came from referrals. He was already involved in his professional association. I worked with the client to map out a business development plan based more on networking than outright sales and marketing. This networking plan was centered on increasing his visibility within the professional association via more involvement with its on-going education programs. This was a plan that was well-suited to his persona and was a change he could embrace.

Create Change That Works With You – Not Against You

This client ultimately achieved many of his objectives but it required altering our original plan to work within the framework of what he was willing and unwilling to change. I find many owners beat themselves up over this issue. I advise them to be true to their own nature and qualities.

If you are an owner and you expect to address issues that are constraining your personal goals or the development of your company, it is essential to recognize what change you are willing to embrace and that which you are not.

YOU: AFormula for Selling a Small Business

YOU:A formula for selling a small business

How many people in any walk of life have you met who relish talking about their own demise?

Think about that statement for a moment.  Is there anything in that statement that places the business entity ahead of the person who is the owner?  No.  And this gets to the crux of one of the biggest impediments that hinder professionals from really helping their business owner clients devise a formula for selling a small business or completing a business succession.  They engage their clients as if the business is the critical player that exit and succession are dealing with.

This comes about when the adviser says things such as “who is going to take care of the business if you are not here?”  In so doing, the adviser is placing the institution of the business higher in importance than the person who is the owner.  When we ask questions such as “how will you feel and what will you do with your time if you are not running your business anymore?” we are placing the person first in our hierarchy.

Trust me when I say this, all the ultimate thought and decision-making related to exit and succession is of the more personal and intimate nature.  If you are an owner and want to do what is right for yourself and your business, if you are an adviser and want to do what is best for your client, remember always this is a personal and not an institutional process.

Business Evaluations – Success From Coming To Grips (Part 1 of 2)

Business Evaluations – Success From Coming To Grips (Part 1 of 2)

A common theme I discuss in this blog is the importance of understanding that business evaluations can be affected by numerous factors many of which an owner would not normally pay attention to during the course of a long business ownership experience.

Some of these are:

• Use of business metrics to drive accountability
• Sustainable business systems
• Quality of financial information
• Formal processes and procedures
• Systems for people management and performance

There is a common thread going through this list.  They all require some human engagement to be put in place and become effective.  People have to cause these types of things to happen.  And it has to be people at the top of an organization.  They set the tone and motivate the organization to use them. In the privately owned business, it is going to be the owner who fills that role.

Assess how well a business is running as I do and you will find another common thread.  These areas are often the weak points of a business.  And the business’ weaknesses correlate almost exactly with where an owner doesn’t like to do something, aren’t good at doing something, or are tired of doing something!

This is not an indictment.  All of us are this way.  I’ve assessed my own business from time to time and I’ve confronted it myself.  (Which is pretty embarrassing I must say as one who teaches these things!)

The question you need to ask yourself is “how important is it to change in order to achieve the goals I want?”  If, as with so many of my clients, you assess the value of your business only to find you are far short of funding your desired financial independence, the need to change may become important indeed.

It comes down to this.  The only way to achieve the end you want…a successful return on investment for your years and years running your business…may require you to change and work on those very things that you’ve avoided for years because you’re not comfortable with them, don’t like them, or are tired of them.  You will need to come to grips.

Here’s the good news. If one does make the commitment to change – that commitment is the single most powerful force to getting the results desired.  Once you have made the commitment to working on change, you’ve done the hardest part.  Not all of it – but the single hardest part of it.

In Part 2, we’ll show you how you go from making the commitment to change to actually getting that change to happen.

Part of the Formula for Selling a Small Business is YOU

Part of the Formula for Selling a Small Business is YOU

A strategic partner of mine, Shane Barber of B.V. Alan, Inc., has a saying.  It goes “All organizations are perfectly organized to get the results that they are currently generating.”  That means that if you are not getting the results you want, there is a clear reason for it and you should be looking to how your organization is structured and peopled and how it needs to change.

This is particularly true when we are dealing with businesses that make the decision pursue sale or succession as exit strategies.  Rarely do we find owners who have had their ultimate end game as the guiding force for their business organization.  The opposite is true.  Most owners act as if they are open-ended systems that are going to be going on forever.  Then a day comes when they are tired, beat-up, feeling their mortality, wanting to do something else, etc. And they decide, “I really should be doing something.”

Whether ‘something’ is selling a business or business succession, it is highly unlikely that the organization and people they have are designed to optimize those outcomes.  Therefore if the owner or owners really want to achieve this new outcome they must:

• Understand and embrace this new goal they want to achieve
• Understand how the organization must change its design, processes and people to achieve the new goal
• And be willing to fully participate in and embrace the processes necessary to accomplish the desired change

These three are simple sounding but in my experience very difficult to do.  I would advise anyone who is starting the process of their exit planning to take a long, hard look at themselves in the mirror and ask, “Am I really ready to ‘fully participate and embrace the change process’.  If you’re not, I would advise you to hold off.  Don’t waste the time, money and energy.  Wait until you truly are.  Embrace and participating fully in the change is the indispensable key to your own success.

Selling a Business

Selling a business

Most business owners are selling a business only once in their lifetimes. (Unless you are a serial entrepreneur) Knowing what the process entails ahead of time will allow you to make an informed decision as to what exit and succession options are right for you and your business. Today I'm going to talk to you about the components that make up the business sale process. I have organized the process into three areas.

They are:

• Fundamentals of Pricing
• Preparing for a Sale
• Executing the Sale Process

Fundamentals of Pricing

Many factors affect the price a business achieves when it is sold. Some of these are out of your control but many are controllable. Understanding these factors allows you to make a realistic evaluation of the price potential of your business. It allows you to make adjustments that will optimize your exit strategy.

Preparing for a Sale

Many priorities chosen by business owners actually make it more difficult to sell the business and decrease its price potential. With proper preparation, you can put the factors you control in harmony with the goal of achieving the best possible outcome from your business sale.

Executing the Sales Process

The process of bringing your company to market can be time consuming and draining. Time-tested methods can be utilized to ensure efficient use of your time, maximum exposure to the market and the probability of gaining the highest available price for your business. I hope you will find this series a valuable tool for attaining your personal business goals.

Think I left something out of the process of selling a business? Let me know in the comments.