There are many reasons for wanting to build a saleable business, including structuring a comfortable retirement.
Yet, most small business owners discover that it's impossible to sell their business when they want to. Why? According the author John Warrillow, it's the fault of the business owners themselves. They dominate their business so completely that, no matter how big or profitable, their company is essentially worthless without them. When it comes time to sell, buyers aren't confident that the company can stand on its own without the current business owner present in the business.
In "Built to Sell: Creating a Business That Can Thrive Without You," Warrillow explains what business owners can do to pull themselves out of the day-to-day dealings and focus on creating a valuable, more saleable company.
This book is about how to create a business that can thrive without you. Once your business can run without you, you'll have a valuable saleable business that makes for an unusal partnership with a prospective buyer.
Interesting to note, that many buyers don't pay 100% cash for a small business on the date of purchase. After paying an agreed to down payment, the new owner expects to payoff the seller over time; out of the positive cash flow generated by the company.
The book tells the story of an imaginary business owner named Alex Stapleton who wants to sell his business. Alex’s advertising agency business is successful with many loyal customers. Since Alex has the most experience in his field, he does most of the selling for his company, and, not surprisingly, Alex's customers all demand that he personally oversee their projects. This leads to customers being dependent on dealing with the one and only Alex.
For guidance, Alex turns to Ted, an entrepreneur and old family friend, who lays out an easy-to-follow plan that enables Alex to transform his business. The key is making sure that every product or service meets three criteria:
1. Teachable: A built-to-sell business offers products and services that you can teach employees to do, or program technology to deliver, while you sleep.
2. Valuable: A built-to-sell business avoids price wars by specialising in doing one thing better than anyone else.
3. Repeatable: A built-to-sell business creates a stream of recurring revenue where customers have to re-purchase often.
So whether you are growing and developing your business for future sale or, building it for the next generation, ensure that you develop the systems and the people so that the business can stand on its own two feet.
"Built to Sell: Creating a Business That Can Thrive Without You" John Warrillow
