How to build a sellable business? Sellability gives you the freedom to step away!
Everybody has business goals. Whether it’s to boost sales, increase your customer base, better your margins, or reduce operating costs, it’s all part of the bigger picture.
However, there is one critical business goal you might be overlooking. It’s on the “ultimate” end of the scale, and even if you haven’t considered it before, it’s an approach that will help you reach all your objectives and deliver something even more valuable: a sellable business.
Whether you want to sell or not is irrelevant. Maybe it hasn’t even crossed your mind, but here are a few good reasons why working towards this goal is important.
Sellability Gives You the Freedom to Step Away
Freedom. It’s the holy grail of the American dream. No matter how much you love what you do, nobody wants to work themselves into the grave. If your company depends on you for its continuity, there isn’t much there to sell. If you decide you’ve had enough, if you experience a family crisis, or if you want to take an extended vacation, how will your company perform when you’re not there?
Strong second-tier management is one of the core principles that makes your business sellable. It also gives you the freedom you need to respond to life as it happens, for better, for worse, and everything in-between. A business that can run on its own and experience growth— without being wholly dependent on you—is highly sellable.
A Sellable Business Lets You Focus on What You Do Best
Do you ever wonder what it would be like if you didn’t have to wear a dozen hats on any given day? You’re the sales department, accounts receivable, accounts payable, human resources, product buyer, customer service representative, and the list goes on.
With all the time you spend on these day-to-day efforts, what happens to innovation and strategic thinking? What happens to the big picture?
You likely started your company based on a passion for what you do, but if the everyday reality of running your business has taken the fun out of it, maybe it’s time to rethink your approach. If you can release the death grip you have on your daily processes, the spark may well return, your business will flourish, and so will you.
Sellability is Financial Freedom
Financial freedom is everybody’s goal, more or less. Even if your ultimate goal is to be living on a boat in Belize, it takes a certain level of financial freedom to achieve this. Your business can be a catalyst for making this happen. Just like your investment portfolio, you should have a level of confidence that your efforts are going to pay off one day. If you are focused on creating a sellable business, you are building towards that end.
A Sellable Business Builds Legacy
You might be building your business intending to leave it for your children. However, if the company is not sellable, it’s not going to be worth much to them in the end. You don’t want to leave them with something they don’t necessarily want. If they aren’t inclined to follow in your hard-working footsteps, you also don’t want to leave them with an albatross they can’t get rid of.
A sellable business gives you options. In one scenario, you can carry on being the figurehead behind the successful family business and hand it off to your kids when the time comes, thus giving them a comfortable way of life and a legacy of their own. Or, if they decide to sell, it could provide a sizable nest egg for them long after you are gone.
If supporting the success of the next generation is a priority, scaling up could be the answer.
Scaling Up is the Key to Sellability
To get the maximum value from your business when it’s time to sell, you need to focus on the things that make your company sellable:
- Reliable second-tier management
- Diversity of contracts and suppliers
- Long-term contracts
- Repeat business
- Reputation building
- Customer satisfaction
- Digital transformation
- Optimized processes
- Profitability
- Unique value proposition
- Growth potential
You might have some of these items already in the bag, and there might be a few you need to work on, but these are the things that will make your business attractive to a prospective buyer.
If you are hoping to sell at any point in time, if you have any inkling of making your exit while you can still enjoy the good things in life, you’ll want to focus on how you can make it happen.
Anything less and you’re doing yourself a disservice. And if you think the notion of scaling up isn’t going to work for you, I challenge you to think for a moment. True, not every business is a good candidate for scaling up, but in terms of your sellability, you owe it to yourself to consider every angle.
Is Your Business Scalable?
Take a moment to think about your industry. Does it support larger businesses? If you think about the most successful players in the space, what sets them apart?
If you were to scale up, what do you see as the biggest obstacle to your growth?
And most importantly, perhaps – what parts of the business can be taken over by others? Which of these are you willing or able to give up control of in the name of growth?
It’s certainly a challenge. When you think about your endgame, don’t diminish the possibilities or restrict your growth based on personal bias or old ideas. When you look at your most successful competitors, picture yourself at that level and then work it back until the picture comes into focus.
Scaling up is a journey. While the road might be complicated, the rewards speak for themselves. As the business expands, growth comes naturally. Cash flow multiplies. Your business takes less time and effort to manage, and its value grows exponentially.
Ever wonder whether your company is a good candidate for scaling up? Schedule a call today, and let’s talk about it. Take our free assessment here.