Why running your business is no different to running your car
Why running your business is no different to running your car
Jason was the first to admit that he had run the Beetle “economically”. The car didn’t have a full service history and as a result, some problems had started to emerge: a nasty ticking noise in the engine which forebode greater problems, rust underneath the wheel arches, and black smoke coming from the exhaust.
All these problems came to light on a pre-purchase inspection and as a result potential buyers were few and far between. Jason was stuck with it.
Is your business a saleable asset (or are you stuck with it)?
We have all read stories of businesses being sold for millions of dollars and most business owners harbour the same dream for their own business. Even those who don’t will one day want to pass their business onto children or family. But your children will not thank you if all you are doing is passing on a liability. Similarly, buyers will not be interested unless you have created a saleable asset.
Will your business survive a pre-purchase inspection?
Just like when you buy a car, so a purchaser of a business will carry out a pre-purchase inspection, except in the business context this is called due diligence. The due diligence process is normally carried out by a team of lawyers and their job is to highlight any problems with the business. In particular, they will look at the business’ documentation: where documentation is lacking (such as employment agreements, terms of trade, agreements with suppliers etc) then a red flag will go up.
The business history is also checked
Documentation is not the only thing that is checked. Lawyers will also highlight any litigation that has occurred to identify whether there are any problems within the business. Tangible and intangible assets will be valued. Of particular interest will be the protection afforded to any intellectual property the business owns or purports to own.
If too many red flags go up the deal could be off, or at the very least the purchase price will be reduced.
Don’t leave it too late
It is no good trying to fix the car just before you sell it. Often by then the damage is already done. Regular maintenance is the key.
With your business, the key is the development of sound systems and watertight documentation. A business that is run from the knowledge in your head is not a saleable asset. But if anyone can run your business (and make a profit) with limited risk using your documentation and assets, then you have a winner. It doesn’t matter what you do, every business has the capability to be sold one day. Whether it does, and the price it fetches, depends on your investment into systems and documentation. Don’t run your business like Jason ran his car.
Why running your business is no different to running your car - To learn more about this author, visit Michael Smyth's Website.
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Why selling the Beetle was a problem
Jason was the first to admit that he had run the Beetle “economically”. The car didn’t have a full service history and as a result, some problems had started to emerge: a nasty ticking noise in the engine which forebode greater problems, rust underneath the wheel arches, and black smoke coming from the exhaust.
All these problems came to light on a pre-purchase inspection and as a result potential buyers were few and far between. Jason was stuck with it.
Is your business a saleable asset (or are you stuck with it)?
We have all read stories of businesses being sold for millions of dollars and most business owners harbour the same dream for their own business. Even those who don’t will one day want to pass their business onto children or family. But your children will not thank you if all you are doing is passing on a liability. Similarly, buyers will not be interested unless you have created a saleable asset.
Will your business survive a pre-purchase inspection?
Just like when you buy a car, so a purchaser of a business will carry out a pre-purchase inspection, except in the business context this is called due diligence. The due diligence process is normally carried out by a team of lawyers and their job is to highlight any problems with the business. In particular, they will look at the business’ documentation: where documentation is lacking (such as employment agreements, terms of trade, agreements with suppliers etc) then a red flag will go up.
The business history is also checked
Documentation is not the only thing that is checked. Lawyers will also highlight any litigation that has occurred to identify whether there are any problems within the business. Tangible and intangible assets will be valued. Of particular interest will be the protection afforded to any intellectual property the business owns or purports to own.
If too many red flags go up the deal could be off, or at the very least the purchase price will be reduced.
Don’t leave it too late
It is no good trying to fix the car just before you sell it. Often by then the damage is already done. Regular maintenance is the key.
With your business, the key is the development of sound systems and watertight documentation. A business that is run from the knowledge in your head is not a saleable asset. But if anyone can run your business (and make a profit) with limited risk using your documentation and assets, then you have a winner. It doesn’t matter what you do, every business has the capability to be sold one day. Whether it does, and the price it fetches, depends on your investment into systems and documentation. Don’t run your business like Jason ran his car.
Why running your business is no different to running your car - To learn more about this author, visit Michael Smyth's Website.
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David AchesonDavid Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns. David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website |
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David BarrDavid Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website |
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Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
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Casey GollanCasey Gollan, Business Coaching & Mentoring Programs. Add $1 Million to $10 Million in the next 1 to 3 years. Since 1996 Casey has to added hundreds of millions of dollars to businesses. Watch a free video see client results Business Coaching website. - Visit Casey Gollan's Website |
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Kim CastleWith nearly two decades in the advertising and design business, with clients like Domino's Pizza, General Motors, Direct TV, Pedigree, Wolfgang Puck, Higher Octave Music, Hollywood Celebrity Products, Disney, and Paramount, as well as thousands of entrepreneurs around the world define, structure, communicate, and position their business for greater profits, BrandU(R) co-creators Kim Castle and W. Vito Montone discovered that entrepreneurs could experience the same power that big brands command for a fraction of the cost with the world's only process-based results-drive Integral approach to business creation. BrandU(R) is helping entrepreneurs grow with the power of extreme clarity from idea...to brand...to market(TM) and helping one million entrepreneurs become successful and whole so that they can make a difference in the world. Are you one of them? If you want to experience clarity all the way to the bank(TM), get started now at http://www.brandu.com. - Visit Kim Castle's Website |
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Jeff FosterWebBizIdeas.com is a Minneapolis website design company founded to help people start an internet business by providing them with website, business, and internet resources that help foster the growth of successful online businesses and develop innovative Internet business ideas. We specialize in internet consulting & internet marketing. - Visit Jeff Foster's Website |
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Leanne Hoagland-SmithAre your sales where you want them to be? Will you be one of the few who achieves sales or business success or one of the many who have failed to change? Are you tired of being told you are like everyone else? Then you may find my first book on sales of interest. Be the Red Jacket in the Sea of Gray Suits, The Keys to Unlocking Sales available at Amazon or at http://www.processspecialist.com/red-jacket.htm. This book is a reflection of my no-nonsense approach to improving sales to overall business results. If you are truly committed to making sustainable changes, then I can help you secure a positive return on your investment because I focus on executable solutions not telling you the problems you already know you have. From training to corporate (group) coaching to executive one on one coaching, my approach is to assess, create awareness, build a goal driven action plan and then execute. The bottom line question is "Not do you or your employees know it, but do you or they want to do it?" Please call for a free strategy session at 219.759.5601. - Visit Leanne Hoagland-Smith's Website |
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Cheryl MatthynssensCheryl is a life skills coach, licensed Chemical Dependency Counselor and a 20 year entrepreneur. Cheryl's dedication to achieving a life of balance led to her expanding her teaching from the simple managing of life's daily challenges to adding financial well being as well. A direct marketer with DrinkACT, she is gaining ground in the online community with her concepts of making sure business owners, entreprenuers and employees have well rounded life styles. She opened up a small affiliate site - The Balance Guide- to help others find resources for mental and emotional well being. Visit Cheryl's blog to see more of the diversity beyond business she has began offering online at www.thebalanceguide.blogspot.com - Visit Cheryl Matthynssens's Website |
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