Do you have targets for your business for this year? If you’re like most owners, you have a profit goal you want to hit. There may also be a top line sales figure that’s important to you. These goals are important, BUT there is another objective that may have an even bigger payoff: building a sellable business.
But what if you don’t want to sell? That is actually irrelevant. Below are five reasons why building a sellable business should be your most important goal, regardless of when you plan to leave your business, which we can guarantee you will!
1. Sellability provides freedom. One of the fundamental drivers of Sellability is how well your company would perform if you were unable to work for a while. If your business is dependent on you personally, how much is there to sell? How can you change this? Can you build a management team and create systems for employees to follow that will allow you to spend time away from your business? What is the world of possibilities that would open up for you if you chose not to go into the office tomorrow?
2. Sellable businesses are easier to run. Running a business would be more fun if you could focus on strategic thinking and big picture ideas, the reason you probably started it in the first place? Instead, most business owners spend the majority of their day on the minutia: the government regulations, employee problems, bank reconciliations, customer issues and checking expenses. The boring details of company ownership can suck the enjoyment out of owning a business – and it is exactly these tasks you need to get into someone else’s job description if you’re ever going to leave.
3. Sellability gives financial freedom. You will have regular reviews of your pension fund or share holdings to see how your portfolio is doing. Not because you want to sell your portfolio, but because you want to know where you stand on the journey to financial freedom. Creating a sellable business also allows you peace of mind, knowing that you’re building something that – just like your stock portfolio – has value you could cash in one day, when you want.
4. Sellability is a gift worth giving. Imagine that your first-born graduates from University and as a gift you give him your prized 1967 Jaguar E Type. Your heavily indebted child takes it on the road, but after a few miles, the engine starts smoking. The mechanic takes one look under the hood and declares that the engine needs a rebuild.
You thought you were giving your child an incredible asset, but instead it’s an expensive liability he can’t afford to keep, and nor can he sell it without feeling guilty.
You may be planning to pass your business on to your kids or let your young managers buy into your company over time. These are both admirable exit options, but if your business is over dependent on you, and it hasn’t been tuned up to run without you, you may be passing along a liability not a pleasure.
5. It takes nine months to make a baby. There are some things in life that take time, no matter how much you want to rush them. Making your business sellable often requires significant changes; and a prospective buyer (be it an outsider, family or management team) is going to want to see how your business has performed for the three years after you have made the changes required to make your business sellable. Therefore, if you want to leave in five years, you need to start making your business sellable now so the changes have time to gestate.
If you are curious about how sellable your company is and what you would need to change to sell it when you’re ready, then it’s time to get your Sellability Score via the questionnaire on our website. It takes about thirteen minutes and your responses are completely confidential.
You can complete the questionnaire by clicking Get My Sellability Score.