Selling a Lazy Business
When founding a business, most owners do not generally think about selling it one day. Their main focus is usually getting the business up and running, and trying to make a profit. However, building a business to sell requires you to shift your focus to maximizing those systems that will increase profitability while reducing the “human touch” part of it. You may be thinking that nobody would ever want to buy your company, but startups and small businesses are regularly acquired by individuals who want to buy a ready-made company, or larger companies who want your technology or eliminate you as competition . Read on to learn more about how to successfully build a sell a “lazy” business.
Build for Laziness
It sounds simple enough: build a turn-key business that someone will want to buy down the road. However, building such a business takes know-how, discipline, and hard work, but equally important are the systems in place that reasonably delegates the duties (i.e. taking the workload off the owner.) Doing this will make it easy for a new business owner to step in and operate your business in a fairly short time. You should have your policies and procedures in place that clearly define your operations. In addition, look to harness software that will increase the efficiency of customer service and maximize product delivery. (FYI: If any of your operation currently requires physically writing stuff on paper, you’re already behind the curve.)
I used the word “lazy” on purpose: you should be thinking about ways that your business can function without you (or a paid staffer) operating it. Even service businesses and the trades can find ways to use technology to reduce the amount of time the owner has to physically run it. As the business owner, your goal should be to be able to leave your business unattended for reasonable periods of time without it falling apart. If you are unable to do so, you do not have the right systems in place. Remember that when a buyer purchases your business, he/she will likely not keep you on any longer than necessary, so the less “hands on” your operation is, the more valuable it will likely be.
Maximize Your Competitive Edge
As an owner growing your business to sell, you must maximize your competitive edge. Track your competition like a hawk to make sure you stay ahead of them. Whatever they are doing right, you should be aiming to match or better their efforts. Develop a competitive edge that will limit others from copying your products, and definitely make sure your trade secrets are properly (legally) protected. I strongly recommend you contact a business planning attorney to ensure this occurs. In maintaining your competitive edge, you may need to price your products at unbeatable rates or make your business so unique that it becomes challenging to compete with. Having a competitive edge in your industry or your locality makes your company highly marketable.
In conclusion, if start with the idea of building a business sell, it should practically run itself. This means that any buyer should be able to step in and operate your business without a sharp learning curve or incurring significant losses. THIS is the type of business buyers want to purchase.
If you have questions about systems, or are considering buying or selling a business, please call our office. We’re happy to help.