18 Jul Run your Business like it’s Not for Sale, BUT…
Selling your business might not be a goal that’s on the table now or a goal that you ever plan on achieving – but it should be. Even if selling your company isn’t an option, operating the business as if someone might buy it at any moment is generally a good idea. Running your business like it’s not for sale BUT thinking like a potential buyer is looking over your shoulder will help you maintain excellent business records and nip any small problems before they become major concerns.
Correct Small Issues Before They Become Big Issues
You can compare a person or company who’s in the market to buy a business to a person in the market to buy a home. While some buyers don’t mind investing in the fixer-uppers, which need a bit of elbow grease before they reach their full potential, the majority of buyers are on the lookout for a turn-key property. They want to hand over the money and move in.
The same is largely true for individuals or companies who purchase businesses. A potential buyer doesn’t want to have to sort through the former owner’s problems and mistakes or try to right a sinking ship. If you run your company as if someone could or will buy it at any moment, you learn to keep an eye out for any issues that seem small at first, but can turn into larger problems if not corrected immediately.
Problems that might seem insignificant at first but that can interfere with your company’s success later on include difficulties keeping track of inventory, lease and landlord troubles, and a high employee turnover.
Look at the Books
Keeping strong records is a must, whether your goal is to sell or not. If a company’s financial records are in disarray, potential buyers are often turned off, as they don’t want to purchase something that might be standing on shaky ground financially. Keeping good books doesn’t just appeal to buyers. It can also help you handle the day to day running of your business. You’ll be able to see if the money your business is bringing in is equal to or more than the money that is going out. You’ll have a good idea of how your accounts receivable are faring. If there are any problems, such as employees skimming off of the top, you’ll be able to spot those quickly, but only if the books are in good working order.
You’re in an elevator with a potential buyer and you have 30-seconds to tell him or her about your company. What do you say? Having a simple, easy to explain vision for your company is essential not only when you’re trying to appeal to an outside buyer but also when it comes to the day to day running of the business.
A person who is trying to get up to speed on the policies and procedures of your company shouldn’t have to spend hours doing so. The more time a person needs to understand what your company does or what his or her role in it might be, the less time that person can spend being a contributing member of your staff. Have an outside party take a look at your company’s policies and let you know if they are confusing or if they are clear and easy to understand off the bat.
Another reason why you want to operate your business as if it might sell tomorrow is that there is a slight chance that it might sell tomorrow. You never know what might happen to you or to the others at the head of the company. You want your business to continue to thrive and succeed, even if you aren’t able to be there to direct and guide it. Aim to build up your business so that it continues to drive itself, even if you aren’t behind the wheel.
If you need help getting your business running as if it’s for-sale, we can help. Connect with Revenue Rocket on our Growth Strategy Consulting programs ahead of getting tangled up within a process.
We also recorded a podcast episode on this topic, listen here!