Tag Archives: selling a business

Can describe your business in one word? Take the challenge here…

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freedomHere’s an interesting question: What’s the one word that sums up what you and your business are all about?

A client asked me this question why we were working together yesterday.  I had to pause for a moment.  But only for a moment mind you.  The first word that popped out of my mind for me was ‘Vision’.  I followed this up with a quick explanation.  liber8yourbusiness helps people get clear what their vision for the future looks like, and then build a plan to get there.   Which brings me back to one of my favourite sayings:

“If you don’t know where you are going, how will you know when you get there?”

The other word I wanted to say was ‘freedom’.  My purpose on the planet is to help people create a free and happy life.  Which leads to another of my favourite sayings:

“The purpose of a business is to set the owner free”

So what is it for you?  What one word describes the purpose you and your business fulfil on the planet?

Ask yourself the question and now… immediately… write down the first answer that pops into your head.

Take a good look at it.  What did you say and why did you say it?  How clear can you really get on the true purpose of your business?  Clarity of purpose is one of the most empowering tools of business success.  Take the challenge now… and let me know how you get on.

Love to hear what your one word is and why.

Be free

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From the desk of liber8yourbusiness.  Business mentors and publisher of Liber8yourBusiness:  The revolutionary planning technique that will set every business owners free.

Business mentor tip #89 – What to think about NOW if your business is ever to be saleable…

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soldHere’s another extract from my very soon to be released book, Liber8 Your Business… talking about the critical factors of the ‘build-to-sell’ model (note, in this chapter in the book I talk about 3 models).  I cannot stress enough how important it is to starting thinking about this NOW rather than when it’s too late.  Check out these 5 critical factors and get in touch with me if you need help…

Critical success factors of the build-to-sell model

1. Set your end goal. Decide how much you want to sell it for and by when, and work backwards. In my book, Liber8 Your Business, I show a simple formula for working out your potential end value, with a link to the online calculator.

2. Name your buyer. It’s important to have a good idea who might want to buy your business in your early planning. Imagine spending 10 years building a business you intend to sell only to realize you have created something nobody wants to buy. If you build a business with a buyer in mind, you have a much better chance of building something they really want.

A potential buyer could be a larger player in your industry looking to grow through acquisition. This growth might be regional – they want a presence in your city or town and it’s easier to buy you than start from scratch. It might be strategic – you have a smart product or service they could add to their existing infrastructure to create additional revenue streams. An example of this might be a large accounting firm buying a small book-keeping firm to add value to their client base. Your service or product could become a ‘nuisance’ to a competitor (read more on a strategy called ‘kicking sand in the gorilla’s face in the Liber8 Your Business book) and they buy your company to prevent it competing or to regain lost revenues. It could be a management buy-out, when senior employees raise the funds to buy you out. It could be a competitor of a similar size wanting to grow and willing to invest to gain rapid growth through acquisition. I’ve sold businesses to two types of buyer. A multinational bought my advertising agency and a local competitor bought my pet care company. My father’s photocopier business sold to his senior management team. A good friend has built three recruitment agencies. The first sold to one of the original partners, who bought out the other partners. The second sold to a multinational looking for regional representation in her city. The third is in its early days of growth and I’ll watch with interest who buys it (I have no doubt it will sell because I know the founders expect this and will build with this in mind). Another type of buyer could be a private equity group or even an individual who sees great potential in what you’ve built.

So who might want to buy your business? What are you building that could add huge value to someone’s offering? Now is the time to start thinking about these things.

3. Remove the dependence on you. To make your business attractive to your future buyer, it cannot be dependent on you. That’s a key message I want you to learn from this book:  No one will outright buy a business that’s dependent on its owner.

If the buyer takes you out of the picture and no business remains, they will either insist you stay in the business or they will walk away. So whatever your strategy is, whatever your end goal, whatever that picture is of your shed or your man on the moon … it needs to not have you in it. I did that at my agency by making sure the clients loved the business but weren’t dependent on me. In the last few years, I hired two senior guys and put them in charge of our biggest clients, so my buyer could see the clients were not reliant on me.

4. Start building a team as soon as you can. I couldn’t afford to bring in those big guns until later in my business growth. I started by hiring people I could afford, with a couple of youngsters straight from college. I trained them to do things exactly the way I wanted. I call it ‘training your clones’ (learn more of this strategy in the bonus chapter called The Acceler8or Approach to business development at the end of the book). I kept building my team that way until we could afford to hire more senior people. And then we had to make sure we had a really strong culture to manage senior people.

 5. Secure future earnings. Getting all our key clients on fixed-term contracts was another critical strategy that worked. They all had two or three year contracts so when the buyer looked at my business they saw a high level of spend committed for the next three years. This was an important lesson I learned from my businessman father. Remember I told you about his photocopier business and how he sold it and retired soon after his fiftieth birthday? One of the best secrets to success he shared with me was, ‘you’ve got to have a back end.’ To explain, he gave the example of his own business. While the sale or lease of each copier was worth a lot of money (especially in the 1970s when these huge machines were a relatively new addition to business productivity) the real value came from the additional contract that went with each machine. This locked the customer into buying all their ink, toner and paper for the life of the machine, as well as regular paid servicing – which meant that, for every machine sold, my father had income guaranteed for the next 10 years, enabling him to predict with complete accuracy his future income. You can see why this made by father’s business attractive for a buyer. They could see a guaranteed return on their investment. It made sense to me when I started my own business, and I hope it does to you too. It will get you a higher price when you come to sell!

And what it all boils down to is this:

A business with committed future revenue that is not dependent on its owner to deliver that revenue is a business worth investing in.

So please, please, please do think about it.  Get in touch with me if you need help with it… laura@liber8yourbusiness.com
Be free and happy
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From the desk of liber8yourbusiness.  Business mentors and publisher of Liber8 Your Business… coming soon, register your interest here: www.liber8yourbusiness.com
To join a group of committed business owners on a fast track journey to a saleable business, click here for more information:  http://www.liber8yourbusiness.com/the-acceler8me-programme/

Business Mentor Tip #81 – Rate your scalability

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I had a very enjoyable interview with John Holt (co-founder of HR Software provider Sonar6 which was sold to NASDAQ listed company Cornerstone On Demand) for my regular NZ Business Magazine column.  He said many wise things.

One was about a key factor a potential buyer would be looking for in a business to purchase.  And that was scalability.  Quick Wikipedia definition coming up:

Scalability is the ability of a system, network, or process, to handle a growing amount of work in a capable manner or its ability to be enlarged to accommodate that growth.

Or… does your business model support rapid and sustainable growth?

An interesting question and one I think every business owner should ask themselves right now.  What is your model for growth? And how will a future potential buyer be able to take your model and add it to their own for their own advantage?

Love to hear your comments on what makes a business scalable.

From the desk of liber8yourbusiness. Businses mentors and experts in small business exit strategies.

Business Mentor tip # 80 – The incredible power of partner marketing… and how to sell glasses to people who don’t need them!

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No problem with the marketing vision for the folk at Specsavers.  Not only do they have a very funny ad campaign – the ‘Should’ve gone to Specsavers’ series (my favourite is the father on the finishing line of school kids running race where he thinks the kid who comes first is his and goes crazy hugging him, while his own son plods up last).  They also do some clever stuff with their marketing and sales strategies behind the scenes.  On Friday I got an email from AA (automobile not alcohol version) offering me a free sight test with Specsavers plus $50 of their two for one deals.  I started needing glasses for reading a year or so ago and whilst being content with my $50 pair of reading specs from the pharmacy, I thought an eye test could be a good idea.  So I booked in and today went for my test, which was very thorough and examined my eyes from every angle as well as my near and far vision.

The good news for me is that my eyes are very healthy, my vision is pretty good for an old gal and the cheapo pharmacy readers are all I really need.

The good news for Specsavers is I spent $319 on two new pairs of reading glasses.  Well, it was $50 off a $299 two for one deal.  Plus of course I needed to spend the $70 on non-reflective coating naturally.  I walked out of there somewhat dazed yet bemused by my own shopaholic tendencies. Good eyesight does not necessarily equate to good judgement obviously.

However, I was impressed at the marketing process that got me to spend this money on items I didn’t need.  Let’s just recap:

Firstly the email from AA offering a free eye test.  Specsavers have clearly have a partnership arrangement with this organisation, which has opened up one of the largest databases in New Zealand to them.

Then the offer of $50 off.  I didn’t need to buy glasses.  I was told as much by the professional who tested my eyes.  But she did guide me towards the rack showing the lovely range of glasses they had, whilst telling me how much I’d enjoyed the extra comfort of an anti-glare coating.  It was hard to resist.  I mean $50 off.  Come on.  And the $299 options did look so much nicer than the $199 ones…

And to top it all off, the sales.  Oh the sales.  Yes by all means look at those ones, but have you seen these ones.  And are you sure you don’t want anti-glare coating?  Let me show you the difference, take a look through these glasses.  One lens has the coating the other doesn’t. Have a look in the mirror.  What a difference!  Of course I bloody want the coating. Bring it on.

Sold to the lady with the trembling credit card!

Well done Specsavers on a job well done. Am so looking forward to a life without glare and the best looking readers in the cafe next week!

From the desk of liber8yourbusiness.  Business mentors and experts in small business exit strategies. 

Business Mentor Tip #74 – Kick sand in the gorilla’s face

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Kicking sand in the gorilla’s face. I love this expression.  Told to me by clever guy called Dion Mortensen, investor, company director and all round smart guy to have coffee with.  We agreed over said coffee that building an exit strategy into your business plan was a critical element to overall success.  And the sooner you set your sights on the company that will eventually buy your business the better.  Pick a company that will be able to take what your business offers and add it to their own offering to increase value.  Work out who will want what you produce in the future, then set about building the business they will pay a lot of money for.

So where does the sand and the gorilla come into it?  See the gorilla as the big guys you want to notice you.  What better way to get them to notice you than to annoy them.  Dion talked about Trademe stealing the classifed advertising from under the nose of Fairfax Media… with their advertising revenues disappearing onto Trademe, Fairfax needed to buy that business to get their revenues back.

We talked about other stories of companies deliberately taking customers from their potential future buyer.  Annoying them to the point of increasing their desire to make you go away.  I recalled entrepreneur Jim Donovan telling me how his former company Deltec moved their head office to the same city in USA as the big company they had picked as their buyer.  When customers began raving about Deltec and moving their business across, Andrews Corporation felt very compelled to make them go away.  And paid them a lot of money to make it happen.  Classic!

So what about you?  Have you identified your future buyer yet?  How could you kick sand in their face?

From the desk of liber8yourbusiness. Business mentors and experts in small business exit strategies.

Business Mentoring Tip #72 – How to create an effective system in six simple steps

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Systems are critical to building a business that will one day set you free. If someone holds information critical to your business and they don’t show up for work tomorrow, you have a problem…especially if that person is you.  So you need to build a business on a foundation of systems that show others what to do.  Here’s a six step process for creating an effective system.

1. State desired outcome

2. Create solution

3. Test it

4. Refine it

5. Document it

6. Train others

You start with your desired outcome.  For example, let’s say that you want everyone in the company to answer the phone the same way to create the best first impression.  You will need to create a solution for this, which in this case is a script you’d like everyone to follow.  You write the script.  You distribute it to all staff.  To test it you let others answer the phone and check they say the right thing.  You make any changes if you feel necessary and once happy with it you put the script into your company manual.  Then you train everyone who comes into the company on how to answer the phone.

Simple as!

From the desk of liber8yourbusiness.  Business Mentors and experts in small business exit strategies.  Based in Wellington, New Zealand.

 

Business Mentoring Tip #70 – Blow your own trumpet

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You cannot be shy and be in business.  If you are going to build a business that someone will ultimately pay a large sum of money for, you cannot afford for your business to blend with the wallpaper.  You have to put your business out there and make sure it is seen.  You have to focus on your reputation. If you focus on the following two strategies from this moment onwards you will build your company’s reputation and grow its perceived value.

1.      Be an expert

You know your business better than anyone and I’ll bet you know all there is to know about your industry too, right?  When you talk to your clients/customers, you reassure them about the money they spend with you by giving them the confidence that they are buying the best.  If you are a health professional, your clients think you are the best in your field – otherwise they wouldn’t come to you.  If you are a retailer, your customers believe you have the best product on offer otherwise they wouldn’t buy from you.  So if people think you are the best, why not prove them right?  Become an expert and start telling the world what you know.  Start writing articles and send them off to all the publications in your industry.  Set up a blog and start blogging about your industry.  Turn some of your ideas into a flyer, get it printed and distribute it to your customers.  Or make it an ‘e’ version and email it to them, or promote it via your website or blog and get people to ask for it (thereby building an email database too).  In terms of the subject matter, just write about what you know.  It doesn’t have to be lengthy.  Lists work really well, especially if you number them… eg.  A chiropractor could write “The 9 things people don’t realise about their spine”.  A fashion retailer could write “5 ways to wear boots this winter” or “11 tips to looking slimmer in dresses this summer” You get the idea – it’s about adding value to people and having them see you as the expert in your field.

If you are confident at public speaking you can also put yourself forward as a speaker in your area of expertise and let business networking groups know that you are available to give talks.  You don’t need to charge for your time necessarily, just be aware you are building your reputation as an expert.

2.      Win awards

I’ve always been a big fan of entering awards.  I was runner up for Business Woman of the Year three times when I owned my advertising agency.  Even though I didn’t win, I got masses of media coverage by being a runner up.  And when we won Agency of the Year, our reputation really took off. The same year we entered our work for national effectiveness awards and ran off with a swagger of gold and silver gongs for our clients.  It was that year that the multi-national agency group came knocking on my door… and yes, they paid a premium for my business.  What put us on their radar was the media coverage that came with winning those awards.

Business magazines are always looking for good stories and everyone loves a winner.  When our pet care company won Supreme Business Woman of the Year for our region we found ourselves on the front page of the business section in the daily newspaper, as well as on national TV.  Not only did our sales see a marked spike from this coverage, we are also building our reputation as a company so prospective franchisees will pay a premium too.

There is no doubt about it, awards are impressive and when a buyer is looking for a business to buy, a business that has won numerous awards in its industry must be a good one, right?

From the desk of liber8yourbusiness.  Business mentors and experts in small business exit strategies. Based in Wellington New Zealand.

Business mentoring tip #56 – Make your favourite customer go “WOW!”

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Rarely does a great business person sit for long inside their comfort zone.  Doing what you are comfortable with every day will inevitably lead to complacency.  When you are complacent things start to go wrong.  Someone else will come along with a better offer.  Your customers will no longer feel special.

The world around you will change, this much you can guarantee.  And it can be very uncomfortable indeed when you are forced out of your comfort zone by external events… such as your biggest customer leaving you.  “But what did I do wrong?” you will cry.  And all they will be able to say is, “you didn’t do anything wrong, you just stopped doing everything right.  I didn’t feel special any more”.

Don’t risk complacency with your favourite customers.  Think of something you could do right now to make them feel special.  Do something today that will make them go “wow”…. then make that part of your comfort zone.   Do this at least every six months and not only will your comfort zone grow… you will be building an amazing ‘wow’ factor into your culture that will make you, your team and your customers feel great.

From the desk of liber8yourbusiness.  Business mentors and experts in small business exit strategies.  Based in Wellington New Zealand.

Try this, it’s fun… colorology tells me I’m born to be a writer!

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I got up at 3.30am because my mind was going crazy. I couldn’t sleep so I got up to work on my book.  Couldn’t resist a quick peek at Facebook and came across this www.colorology.com  It’s a site from Pantone* which tells you your personal birth colour and how this reflects your personality.  I know, I know… flakey as right?  However at 3.30am, when the world is dark and quiet, you feel more open to such things.  So I entered my birthday to see what would happen.

What it told me during the wee small hours was quite freaky.  My personal birth colour is zephyr (a pale purple).  Then it said that many people born on this day have a propensity for writing and my mind is very active (remember why I couldn’t sleep) so it is important to communicate both creatively and physically.

It also told me my four key words are intelligent (naturally), writer (yes), financial (teaching financial freedom through business) and protection (not sure about this one)….

So flakey as it is, it seemed to know me quite well!  Go on, give it a go…. www.colourology.com

* Pantone is a clever company which over 40 years ago revolutionalised the graphic design business by creating a colour matching system for designers and printers to ensure colours were consistent from design to print.

Business Mentoring Tip#55 – Imagine your are Apple for a day

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I was up at the crack of dawn to work on my book again this morning.  The chapter I’m working on is called “Driving value through your brand” and I find myself studying the great brands of our time to demonstrate some of the points I’m making.  You can’t really write a chapter on branding without looking at Apple.  And you can’t look at the Apple brand without thinking about the core driver of this brand.

Innovation.

Apple’s positioning line is ‘Think Different’  and these two simple words drive everything the company is about.  And in an instant they explain why this company is so successful.  Things are moving so fast right now in the world of technology and business.  Nothing is what it was six months ago even.   The companies who embrace change and implement new ideas quickly are the ones who will flourish.

Steve Jobs was exploring and looking new ideas right up until he died.  Here’s a quote from him I found,

“So when a good idea comes, you know, part of my job is to move it around, just see what different people think, get people talking about it, argue with people about it, get ideas moving among that group of 100 people, get different people together to explore different aspects of it quietly, and, you know – just explore things.”

My tip for you today is to spend an hour or two this week thinking differently about your business.  If you were to embrace the culture of Apple, just for a moment, how could you be the most innovative company in your industry?