Author Michael Podolny at Google+

Creating Your Formula for Selling a Small Business

Creating Your Formula for Selling a Small Business

A Deeper Dive Into Improving the Drivers that Affect Business Value

Scientific Marketing and Sales (Part 2 of 4)

This month I’m covering specific things you can do in your business to increase its value, make it more salable and make it easier to do succession.  In this post I’ll be discussing the second of our four topics, scientific marketing and sales.

Where do your sales come from?  Who are your best customers or clients?  How well can you define them?  Can you define them in terms of size, industry, geography, and behavioral terms? If you are using a proposal based sales process, what are your conversion rates from of leads to prospects, of prospects to proposals, of proposals to sales?  If you are using a form of direct marketing, do you know how much it costs to acquire a sale?  Do you know how many initial sales convert into longer-term customers and the value of each?  If you are using advertising to you have a way of measuring the effects of any given ad, ad campaign, or promotion?

This is just a sample of the kinds of information that has the ability to drive increasingly improving marketing and sales results.  A business that can explain exactly where its business is coming from and how it comes sets it apart from the vast majority that ‘kind of have an idea’.  The term ‘scientific’ is used because of two aspects to this type of marketing and sales management.  First it is data driven.  This means consistently collecting information, measuring, and analyzing it.  Second, when we have this type of data systems we can use the scientific method to test new marketing and selling ideas.  We can create a hypothesis, test it, measure the results, and then adjust what we are doing.

Businesses who have never done this and start implementing these processes see significant sales and profit improvements which of course drives sale, marketability, and ability to do succession.

Want to learn more?  Contact me at michael@podolny.com

Author Michael Podolny at Google+

Creating Your Formula for Selling a Small Business

Creating Your Formula for Selling a Small Business

A Deeper Dive Into Improving the Drivers that Affect Business Value

Sustainable Business Systems (Part 1 of 4)

For the last couple of months, I’ve been focusing various emotional and psychological factors that inhibit owners from achieving the ultimate goals they seek when they decide to sell or do succession.  This month I’m going to go back into what drives the value you can get from your business and things you can be investing into that will make your business more salable, more capable of doing succession and will increase the value you will receive from either.  I will be discussing four of these and will be devoting one post to each.  They are:

• Sustainable business systems
• Scientific marketing and sales
• Repeatable human capital development and management
• Consistent application of accountability and feedback metrics

This post is about sustainable business systems.

Think about everything you do to produce and sell your product or service.  Even if one is a very small business there are many different things that must be done.  Some are direct such as actually producing the product or delivering the service.  Many buttress that activity.  Selling brings in the clients.  Purchasing makes sure we have everything we need to do what we do.  IT provides us with the platforms essential to doing business today.  Accounting makes sure we know how we are doing.  Each activity is a system unto itself and is part of the larger, integrated system that is the business.

Presumably there is a person or there are people who are working each of the systems you have.  Now ask yourself this.  Are you dependent upon the specific people who are doing those functions or do you have processes and procedures that allow you to bring new people effectively into these functions?

If your answer is the former, you do not have sustainable business systems in place.  You are dependent on the individuals.  If your answer is the latter, you do have them and you have put yourself in a position where you have more value, more marketability and a much easier, safer path to succession.

Implementing sustainable business systems is much easier said than done but can be well worth the effort.  If you’d like to find out more, contact me at michael@podolny.com.

How to Improve Small Business Evaluations

How to Change the Valuation of Your Business

Developing an Outcome Driven Strategy

Driving the Strategy to Achieve the Desired Results (Part 4 of 4)

Let’s review.

1. If we want a satisfactory outcome to our business life, we need to define specifically the outcomes desired.  I call these your ‘Ends’.
2. ‘Ends’ are not always tangible outcomes like money in the bank.  They can be intangible such as wanting a legacy or taking care of those who have contributed to your success.
3. ‘Ends’ can conflict with one another.  To have attainable success, one must reconcile these potential conflicts and get clear on the ultimate ‘Ends’ to work towards
4. Having well defined ‘Ends’, a strategy can now be built to get to where we want to go.
5. To build an effective strategy we have to accurately assess where we are now and determine what will need to be done/changed to achieve the ‘Ends’.  I have called this a gap analysis.
6. The result of your assessment and gap analysis should be a list of projects.  Building out the detail of these projects gives you an action plan

In this post I am going to talk to you about how we go from the action plan to actually implementing the actions necessary to get the change desired.  This is far from an easy process.  In fact the business landscape is littered with plans whose owners had every intention of implementing but didn’t.   A plan that is not implemented is a total waste of the time and money spent creating it.

The primary reason why plans end up not being acted on is that the total of actions called for are overwhelming in the context of all the normal business and life activities an owner is dealing with.  The result is kicking the can down the road; putting off even starting on the necessary projects because it all seems so overwhelming and complex.

My answer to this problem is to thinks small…really small.  Break the actions necessary into steps that one can readily understand and actually execute in the context of one’s daily reality.  Here’s an example.

Let’s say that our plan calls for us to do some personal financial planning to figure out how much we are going to need from our business to fund our lifestyle.  But you never have done any personal planning before.  So you keep putting it off because you don’t know where to begin.  How could we break this down into small steps that we would actually do?

We might start by creating a sub-project – Selecting a personal financial planner.  We could then break that sub-project into even smaller actions.  The first might be to create a list of our current business advisers and contacts who might know about personal financial planners.  That wouldn’t be so hard to do would it?  Might take an hour or even less.  Then we could have another action for calling and making appointments with those people.  You could probably fit that into your schedule.  Once you had the appointments made.  You could have another action for making a list of questions for your meetings.  That list should probably include getting referrals to specific personal financial planners.  Once you’ve had your meetings with your advisers, you could have an action for consolidating the information and creating your list of questions for the financial planners themselves.  Then there would be an action to call and make appointments with the referred financial planners and one for consolidating the information you learned from them.  Another action might be getting references from those you really liked and yet another for checking those references.  Your final action would be making a decision.  If you could do one action a week, it wouldn’t be long before you had knocked off that sub-project.

And this is the key to driving your strategy.  Break your projects down into very doable actions, only assign yourself as much as you will really get done, and then DO IT.  A lot of very small, logically planned actions, DONE, will get you the results you want.

How to Improve Small Business Evaluations

How to Improve Small Business Evaluations

How to Change the Valuation of Your Business

Developing an Outcome Driven Strategy

Building a Strategy Based Upon an End (Part 3 of 4)

I’ve been discussion with you over the last two weeks improving small business evaluations by adopting an outcome driven strategy.  It’s a basic premise of value building – you have to know and define the value you want to achieve it.  I discussed that outcomes (‘Ends’ in our jargon) should not be thought of in simplistic terms and certainly not restricted to just dollar and cents ‘Ends’.  Finally I brought up the fact that ‘Ends’ can conflict with one another and such conflicts need to be reconciled to get desired results.

Once you have a set of clear non-conflicting ‘Ends’, you can begin to build a strategy for accomplishing them.  To build an effective strategy, you will need to do an assessment.  Your assessment should be a complete top to bottom look at your business and your personal situation compared to the what would be required to achieve the ‘Ends’ you want.  The output of such an assessment is a gap analysis – a summary of what changes you need to make in order to fulfill your ‘Ends’.

Based upon your gap analysis, you can extract a list of projects and build out the specific steps you need for each project.  Determining which projects need to be done first or give the quickest results will allow you to turn your strategy into an action plan.

What I’m going to tell you next is going to be a bit self-serving but it is also true.  You should be very seriously considering the use of a third-party, outside advisor to help you with the assessment and strategy building.  It is extremely difficult to be objective about oneself.  I know.  I went through this with my own business recently and had to bring in an adviser to make it all happen…and I’m the professional who does this!  But I couldn’t be objective about myself.  The reality is that each of us need outside views to gain clarity no matter what your experience.

I would of course love to be that advisor for you but get someone who has experience and who you can trust.

In my next post I will talk about how we make our plan actionable so we get results.