Positioning Your Company for Purchase – Part 1
At some point in the life of every company it becomes time to think about selling the business.
Much like selling a home, you can put it on the market as is or you can devote some effort fixing it up first to make it more attractive to potential buyers.
To get the highest possible purchase price when you sell your business, here are five steps you can take:
- Put policies and procedures in place
- Strengthen your value proposition
- Rationalize compensation
- Build in long-term maintainable income
- Put yourself in front of buyers
We'll address the first two items in this article; the last three in a second article.
Put Policies and Procedures in Place
The first step is to make sure you have solid management team and good procedures in place. Can your business run without you?
You need a strong manager or managers, with good administrative and financial support staff. If you're still doing everything yourself, start delegating to your management team. Make them accountable for results.
Then document policies and procedures to make sure everyone understands what they are supposed to do.
Strengthen Your Value Proposition
The second step is to strengthen your sales force, and develop ongoing recruiting campaigns and programs that aid in retention.
Look at your sales force with new eyes. Why do they work for you? What value proposition do you offer them? Can that value proposition be transferred to the new owners?
Do you offer extensive lead generation and lots of administrative support so they can focus on closing? Do you have gorgeous offices? Both of those will transfer.
But if the main reason they work for you is your sparkling personality, that's a problem. If the new owners have to be as charismatic as you are, you are severely limiting the number of people you can sell to.
Take the time now to re-examine your value proposition. Listen first to what your sales reps want, then rebuild your offering to meet their needs.
You may be burdening your company with expenses for benefits and services that your representatives don't want or need. Ask them.
See if they really value working in a building with marble floors and crystal chandeliers. Maybe you can cut back your space there and open a satellite office where rents are lower.
Maybe they don't want dental insurance. Maybe they do want daycare. Or a better retirement plan.
Consider offering your sales force a choice of value propositions. You can design offerings that appeal to different groups within your sales force; perhaps one for top producers, one for entry-level reps, one for reps who want a lot of support, one for reps who want a stable and secure income.
By designing offerings that meet the needs of different types of sales associates, you expand the pool from which you can hire, and improve recruiting and retention.
Read Positioning Your Company for Purchase – Part 2
