Excerpt:
Who is your "ultimate" customer?
A prospective buyer or successor.
Always keep in mind that the prospective buyer for your business should be viewed as your companys ultimate customer.
For those of you who are currently in business, say yes out loud (dont worry about whos looking) when you can relate to any of the following comments:
* Sometimes I feel I have to lean on clients to collect my receivables. * Tomorrow I have a light day so Ill work the 10 hours I need to reduce the number of hours Im required to put in tomorrow. * I would like to be in the Top 10 percentile in my peer group but I dont know how to get there. * Im not sure my revenues are sufficient to justify a salary increase for myself. * I have great contract proposals but I need more capital so the business can purchase supplies. * Im not sure I can borrow all the money I need to expand my business. * I have a strategic plan, in my head. * If someone wanted to buy my business today Im not sure Ill get what I want. * I dont know what my business is worth on the open market. * Im past the bootstrap stage in my business so Im ready to grow. * If I offer more employee benefits I might attract some stronger staff members. * While I know my target market, attracting more of those customers is my current project. * I understand my brand and Im starting to attract stronger clients/customers * Im the right leader for my company but I dont have anyone to groom to take over when I am ready to retire. * I understand that strong internal controls are necessary if I want my company to be successful. * I have a vision for growth but have not found the time to implement it.
Many small-business owners start out by concentrating on making payroll or by focusing on picking up new clients (even unqualified ones) to generate cash flow. Although day-to-day operations are extremely important for any venture, such an emphasis may restrict long-term opportunities. If an entrepreneur does nothing but address current concerns, who is left to concentrate on the companys strategic plan or succession plan?
Sometimes it can take an entrepreneur a decade or two to come full circle and understand that it takes more than just the ability to pay the bills to make a company successful. Success is not only the amount of money you make but also the enjoyment you derive from the daily operation of your business and the value you add to society.
Successful entrepreneurs understand that building a vibrant company requires that they identify a business focus (a guiding passion), preferred clients, and a brand for the companys products or services. In addition, internal or external professionals must be available to help create formal processes and strategies.
Over the years Ive seen successful businesses, big and small. Theyve all had common traits: leaders with vision, networking savvy, and the ability to attract the right group of professionals to help guide the company.
How can you transform your business into something good enough to sell? That is the question we intend to answer in this book, Make the Leap: From Mom & Pop to Good Enough to Sell.
A WINNING TEAM
For this book, Ive pulled together a team of talented contributors. Youll meet numerous successful entrepreneurs, a valuations expert, a finance executive, professors, marketing pros, and others who have shared their practical experiences. The result, I feel, is a book youll keep around for many years to come. The lessons you learn will help you transition your company into a business that provides exciting opportunities for growth. This book was written for several reasons. I enjoy sharing practical advice with entrepreneurs and hope to help an unlimited number of entrepreneurs become more successful. If you are at a crossroads with your business, desiring to grow from a small operator to a larger enterprise, youre certain to find some new tools that will help you continue on your path to success.
WORDS FROM THE WISE
An associate, columnist Jim Verdonik of Daniels, Daniels & Verdonik, PA (listed among the Best Lawyers in America), reminds business owners, When you decide whether to invest in growing your business, determine whether you are likely to get your investment back when you sell the business or by earning increased profits before you sell the business. Approach it like you would decide whether to remodel your house. You usually get more of your investment back on re-sale by remodeling the kitchen than remodeling the basement. That is, investments that produce no financial return are really expenses, not investments.
FOOD FOR THOUGHT
In Make the Leap: From Mom & Pop to Good Enough to Sell, well show you the kitchen: the key areas on which you should focus so that your small business can improve and become attractive enough to sell. Well also show you how important it is to seek professional guidance if youre trying to estimate what your company might fetch in the market, what type of individuals to have on your team, and how to attract customers (or acquire them). Follow our advice and youll create a legacy, regardless of whether you ultimately want to sell your business or if you simply want to get your company in tip-top shape for ongoing operations. Youve made an investment by buying this book. Let us now explore some ways to help you make the leap from a Mom-and-Pop enterprise into something that is good enough to sell.
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