As a business owner, you may have set profit goals and revenue targets for the year. While these are important, there is another goal that can have an even bigger payoff: building a sellable business. Regardless of whether you plan to sell your business in the near future or not, focusing on building a sellable business can bring you ultimate freedom, financial security, and peace of mind. In this blog, we will explore five compelling reasons why building a sellable business should be the most important goal for smart business owners.
Sellability means freedom
Many business owners find themselves trapped in their businesses, where they are the key decision-makers and the business is heavily dependent on their personal involvement. This lack of scalability can hinder growth and limit their ability to take time off or pursue other opportunities. However, by building a sellable business, you can create a management team and systems that can operate independently, giving you the freedom to step away from the day-to-day operations. This means you can take a vacation, spend time with your family, or pursue other interests without worrying about your business falling apart. Building a sellable business gives you the freedom to choose how you spend your time, making it a compelling goal for any business owner.
Sellable businesses are more fun
Running a business can be overwhelming, especially when you find yourself bogged down with mundane tasks that take away from the excitement of entrepreneurship. Many business owners spend their days dealing with government forms, employee reviews, customer issues, and other administrative tasks, leaving little time for strategic thinking and big-picture ideas. However, building a sellable business requires you to create systems and processes that can be delegated to others, freeing up your time to focus on what you enjoy most and what adds the most value to your business. This can make running your business more enjoyable and fulfilling, as you get to focus on the aspects that truly matter to you.
Sellability is financial freedom
Just like you monitor your investment portfolio to track your progress towards financial freedom, building a sellable business can provide you with the same peace of mind. A sellable business is an asset that has value and can be sold one day, providing you with a potential source of liquidity. This can be a valuable asset to have in your retirement plan or as a contingency plan in case of unforeseen circumstances. A sellable business can provide you with financial freedom and security, knowing that you have a valuable asset that can be leveraged when needed.
Sellability is a gift
If you have plans to pass on your business to your children or young managers, building a sellable business becomes even more critical. Many business owners have the intention of passing on their business as a legacy, but if the business is too dependent on them and lacks scalability, it can become a burden instead of a gift. Just like giving your child a car that requires expensive repairs, passing on a business that is not sellable can be a liability for the next generation. Building a sellable business ensures that you are leaving behind a valuable asset that can continue to thrive even after you have moved on, making it a gift for the future.
Nine women can’t make a baby in one month
Building a sellable business takes time and effort. It’s not something that can be achieved overnight. It requires strategic planning, operational improvements, and building a strong management team. Just like it takes nine months for a baby to be born, it may take several years to transform your business into a sellable asset. This is why it’s important to start early and give yourself enough time to implement the necessary changes.
Now that you understand the hidden goal of the smartest business owners, let’s explore how you can start building a sellable business.
- Delegate and Empower Your Team
To make your business less dependent on you, it’s crucial to build a strong management team and delegate responsibilities. Identify key roles in your organization and hire or promote talented individuals who can take charge of those roles. Provide them with the authority and resources they need to make decisions and execute tasks without relying on you for constant guidance. Empower your team to take ownership of their roles and encourage a culture of accountability. By doing so, you can free up your time to focus on strategic initiatives and big picture ideas, making your business more sellable in the long run.
- Create Standard Operating Procedures (SOPs)
Just-add-water systems in the form of SOPs are essential for building a sellable business. Document your business processes, workflows, and best practices in detail, and ensure that they are easily accessible to your team. SOPs provide a clear roadmap for how tasks should be done, regardless of who is doing them. This helps create consistency, efficiency, and scalability in your business operations. A well-documented set of SOPs demonstrates to potential buyers that your business can run smoothly even without your direct involvement, making it more attractive for acquisition.
- Build a Brand and Customer Base
A strong brand and loyal customer base are valuable assets that can significantly enhance the sellability of your business. Invest in building a strong brand image that resonates with your target market and sets you apart from the competition. Develop a loyal customer base by providing exceptional products or services and delivering outstanding customer experiences. A solid brand and customer base create a positive perception of your business in the market and can generate recurring revenue, making your business more appealing to potential buyers.
- Focus on Financial Performance and Metrics
Financial performance is a critical factor that potential buyers evaluate when considering the purchase of a business. Focus on improving your business’s financial performance and track key metrics that demonstrate its profitability and growth potential. Implement sound financial management practices, such as budgeting, financial reporting, and cash flow management, to ensure that your business is financially healthy and attractive to buyers. The stronger your financial performance, the higher the value of your business and the more likely it is to be sellable.
- Plan for the Future and Seek Professional Advice
Building a sellable business requires long-term planning and strategic decision-making. Create a roadmap for the future of your business and set specific goals and milestones to achieve along the way. Seek advice from experienced professionals, such as business coaches, accountants, and attorneys, who can guide you in making strategic decisions and preparing your business for sale. They can help you identify areas that need improvement, provide valuable insights on industry trends, and assist in creating a comprehensive exit strategy. Planning ahead and seeking professional advice can greatly increase the sellability of your business.
As a business owner, it’s important to have clear goals for your business, and building a sellable business should be a top priority. Sellability brings numerous benefits, including freedom from being tied to your business, more enjoyable and fulfilling work, financial freedom, and the ability to pass on a valuable asset to future generations or potential buyers. Building a sellable business requires careful planning, delegation, documentation, brand-building, financial management, and seeking professional advice. By focusing on these areas, you can increase the sellability of your business and maximize its value in the long run. So, regardless of when you plan to sell, start working towards building a sellable business today and unlock the hidden potential for greater success.