The Importance of Building a Sellable Business
Regardless of whether you plan to sell your business in the near future, building a sellable business should be a top priority. There are several reasons why this is the case, including the following:
Sellability Means Freedom
One of the key benefits of a sellable business is that it offers freedom. When your business is dependent on you personally, there’s not much to sell. By building a management team and creating systems for employees to follow, you can make your company less dependent on you. This means that you have the ability to spend time away from your business, opening up a world of possibilities.
Sellable Businesses are More Fun
Running a business can be fun, but most business owners spend the majority of their time on the minutia, such as government forms, employee performance reviews, and customer issues. These tasks can suck the enjoyment out of owning a business. To make your business more fun, you need to delegate these tasks to others, which is easier to do when your business is sellable.
Sellability is Financial Freedom
Creating a sellable business allows you peace of mind, knowing that you’re building something that has value that you can choose to make liquid one day. It’s the same as opening your brokerage statement each month to see how your portfolio is doing, but with the added benefit of having a tangible asset.
Sellability is a Gift
If you’re planning to pass your business on to your children or let your young managers buy into your company over time, it’s important to make sure that your business is sellable. If your business is too dependent on you, and it hasn’t been tweaked to run without you, you may be passing along a liability.
Nine Women Can’t Make a Baby in One Month
Making your business sellable often requires significant changes, and a prospective buyer is going to want to see how your business has performed for the three years after you have made the changes required to make your business sellable. Therefore, if you want to sell in five years, you need to start making your business sellable now so the changes have time to gestate.