Last time on the Growth To Exit® Blog, we talked about the 4th Key Area in your business, the IT and IP Systems and why it is important to upgrade your operating methods and processes before the sale of your business and the change of ownership.
Buyers who are interested in your company, will specifically evaluate and scrutinize 5 Key Areas of your business. Flaws and problems in any of these areas can impede the value of your company and result in a reduced offer from the buyer, who will need to spend extra money and time to fix these issues. To be sustainable, you must implement best practices, processes and systems in these five critical areas.
As a reminder, the five key areas include:
Now it's time to look at your Marketing department, and determine how stable your business really is, and what can be done to enhance the streamlining of your sales. Having a detailed business plan for future growth, will increase the trust that potential buyers put in your company, and help you receive a higher valuation and better offers.
Businesses provide a service or product to generate sales.
Many small business owners tend to follow the same marketing strategy that they have been using for years and think “Well, I can't change it because that's the way I've always done it.” Basically, the old adage, “If it ain't broke, don't fix it.”
This approach, however, will not work when you are selling your business.
As I explain throughout the Growth To Exit® course, you have to shift your mindset from that of a business owner to a business seller. Buyers want to know is how they can grow your business and increase profitability after the sale.
Before you even think about selling your company, preform an objective marketing analysis and forecast and see how your company is going to do in the next few years, and what its position will be in the marketplace.
Buyers want to know what your sales plan is, and the more predictable you can make your company operations, sales, and marketing revenue, the higher the buyer will be willing to pay. With a sales and marketing plan, you add mare value to your business, as the uncertainty and the risk are being reduced.
Consider these areas when you conduct your marketing plan and growth analysis:
The Bottom Line
Buyers of existing companies look for consistency, stability, and growth. Communicating and demonstrating to a buyer that the growth potential of your company has not been fully tapped, and that there are new lines of business that can be reached, increases your company’s value.
People that create a sales and marketing plan are far more likely to be successful in predicting future performance than those that do not. Having a written plan helps grow your business, set new targets, identify key performance indicators, and organize commission schedules. In the end, a buyer will be reassured that the business will still be viable after the sale.
This blog post concludes the 5 Key Areas Series. Of course, each area is discussed in greater detail and practical suggestions are made inside the Growth To Exit® online course.
Remember, everything that you do pre-sale, before you try close a transaction, adds potential value to your business. When you optimize your exit using proven strategies, techniques, and processes, your company is harder to devalue. You have done the work a buyer would have to do to scale your business, and that translates into a higher sales price.
Your company is the product. Growth to Exit® is the process. The Buyer is your customer.
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