Positioning to Sell or Grow Your Business
I recently sat down with a long-time client who is now close to selling his business. He wanted to sell the business a year ago. When we discussed how the market would value his business, he agreed (with some reluctance) to wait. We needed to really prepare the business for a sale. Financials, operations, employees, marketing – everything needed to be evaluated. We rolled up our sleeves – together – and quickly watched performance improve and value increase. In one year, we were able to create one of the best years for the business. More importantly, the business received an offer at nearly double the owner’s desired price from one year earlier. If you want to sell or grow your business, you must prepare and position the business for success.
When the owner started his business decades ago, he had no idea whether the business would be successful. He had no clue whether it would grow, provide a source of income or even become something worth selling one day. But planning, patience and deliberateness paid off.
Following my meeting I decided to write some quick tips that could help other owners as they determine what is in the best interest of their business.
As an expert in helping small and mid-size businesses, I know your business is personal. Having the right strategic plan is essential – whether you want to grow, transform or sell your business. This is also true for acquiring new businesses too.
Help is out there; whether you want to grow or sell, there are plenty of ways to increase the value of your business.
Asking for Help
Experience for more than two decades has taught me business owners are often their own worst enemies. They’re so engulfed in day-to-day processes and procedures that it is hard to take a step back to understand how the customer views their business.
Business owners all have critical issues where they would benefit from outside advice and support. The hardest part is asking for help.
Asking for a seasoned set of eyes to value your business or access the market and competitive landscape is always a good idea. Business owners should step back from time-to-time to reassess their business goals and opportunities. Even if you are starting a new business or acquiring an existing one, an outside perspective helps. Qualified and unbiased eyes will help refine your business plan.
At Inflection 360, we believe that each business is unique. This means that the solutions we offer need to be tailor-made for each business. To do this, we are collaborate with the owners and management to find out what drives your business. We want to understand the challenges that impact growth. We use this knowledge to drive value-added results.
As the Managing Partner of Inflection 360, I have developed a framework to guide our clients. We start by learning from the experts – the business leaders. We look to build upon your expertise. Inflection 360 analyzes both the competitive landscape and opportunities within the business. Even an owner that plans to sell should look to improve business performance. Revenue growth opportunities and operating efficiencies can both create tremendous value. We collaborate with management to achieve success.
If you are planning on selling your business, you will need a successful exit strategy. We understand what a buyer wants and can position the business to shine. We also lead integration to make for an effective and smooth transition for you and your employees.
Planning and Preparation
A sales process takes planning and preparation. You wouldn’t launch a new product without doing a little research to find out what your customers want first. You would spend days, weeks and months planning and preparing your product. You should take the same steps to prepare to sell your business.
Too often businesses don’t receive maximum value because the owners simply did not position or market the business properly. I have seen practices lose millions of dollars of value because they were not well prepared.
Medical and Dental
To receive the correct and highest value for their practice, a doctor must plan and prepare for a sale. Doctors spend decades building a patient base and growing their practice. Too often, they fail to consider selling their practice prior to retirement. The true value of most practices comes from the reputation and relationships built by the doctor over many years.
To get the most value in a sale, a doctor needs to be viewed as a key business asset. To do so, a doctor should consider selling at least a few years prior to retirement. If the doctor stays with the practice as an employee, it helps to ensure patients (and revenue) also stay. This will justify a buyer having to pay more for the business. Particularly when a larger medical or dental organization is the buyer, a doctor should consider an ongoing role to maximize value.
Selling to a large medical or dental organization or a private equity firm is very different than selling to another doctor. You need to be better prepared, but the additional money can be well worth the effort. You will want to hire an advisor that has experience with these buyers to get a deal done.
Each client has a unique story. Each has taught me lessens that will benefit other business owners. In future blogs I will share many of these stories to help business owners and management get the most value out of their business.
P.S. If you would like to learn more about how I can help your business, schedule a call here. Schedule Call
P.S.S. Click here if you would like to read my previous article, Discover 10 Strategies Now To Sell Your Business For Maximum Value.