It is the Circle of Life of an entrepreneur. We start a business because we have a passion for something. We keep at it because it is fun, rewarding and challenging. And then the day comes when we must end the relationship with our business. At that time we have a choice; close it, give it away or sell it.
John Warrillow believes you should sell your business but he recognizes that too many of us build a business that is so dependant on us it has little value to potential buyers. In his book Built to Sell he shows us, through the eyes of a fictional business owner called Alex, how we can create a business that has real value; a business that is:
• Teachable; the products and services can be created and delivered by employees and/or technology without help from the business owner.
• Valuable; the business has specialized in doing one thing better than anyone else.
• Repeatable; there is a steady stream of recurring revenue.
John takes us through a journey of 8 Steps. However, he writes the book from his own experiences and so each step is amply supported by the lessons he has learnt from selling his businesses. Some examples:
• “Step 1 ‘ Isolate a product or service with the potential to scale.”Well that makes sense; make more of them without having to add resources.
• “Step 4 ‘Stop selling everything else.”Ouch; that sounds tough and it is!
• “Step 6 ‘ Find a Broker.”Shows us how to find the right broker for our business.
Alex seeks help on his journey from a mentor called Ted. And so we have the added bonus of Ted’s Tips. A couple of examples:
• Tip #5 ‘ Avoid the cash suck. Once you’ve standardized your service, charge up front or use progress billing to create a positive cash flow cycle.
• Tip #11 ‘ You need at least 2 years of financial statements reflecting your use of the standardized offering model before you sell your company.
This is a practical how to book. It is not a book on how to maneuver through the legal complexities or accounting conundrums of selling a business. It focuses on how to build a business that has value so you can have conversations with business brokers that result in a binding offer.
For more visit www.BuiltToSell.com
