Every decision you make should be directed toward building value in your company, even if you don’t intend to sell for years to come.
Following are five factors that will make your company appealing to an outsider:
- a healthy income stream
- a tidy profit after all costs and overhead are paid out
- a proven plan of marketing that produces consistent sales
- a strong client/customer base
- an organized, efficient work-flow system
The sixth, and perhaps the most important factor is: If you leave the business, what happens to it?
Service providers beware: The more the business relies solely on you, the less valuable it is. Your “irreplaceability” may do wonders for your ego but little for your pocketbook when it comes time to sell the business.
It’s never too late to set your business up as if you were going to sell it…that way you’ll be ready, should the need arise, rather than regretting what you might have done, “if only you’d have…”
I have recently been working with several clients to build their value proposition and decide what they intend to do with the business in 5 years’ time. Do they sell or do they get a passive income from the business once they exit? What an excellent decision to have to make? However, this will not come through passivity we are working together to build the business to a point where these decisions will become easy. It does take time but working on this strategy rather than just working harder for more revenue is fun and rewarding in so many ways.
