Does Your Business Have a Vision? Does it Need One?
By: Matt Carle – Main Ascent Business Brokers and Advisors
As a business owner, you’re the leader. You need to decide what your business will do, how it must do it, and where it will go next. An owner without a vision for where the business is going is going to have a tough time building anything stable or sustainable.
When you try to move forward without a long-term vision, you and your team are left jumping blindly from one item to the next—unsure of where your focus should be or where the business is heading. But creating a vision can feel intimidating. It’s hard work, and there are so many pieces to consider – where do you start, how do you come up with impactful answers, and how do you package it so that other people can understand it.
There are a few keys that help our business owners create something that is effective and meaningful. They make your vision actionable, because this should be a document you use day to day, to remember where you’re going and help guide your decisions. If you’re struggling to create a compelling vision, start by asking yourself these questions.
- What will the business look like?
Can you imagine walking into your business four years from now? Consider each detail of your facility and office space. What do they look like? Where is your office? What hangs on the walls? What unique or memorable reference points exist to remind you where you’re headed?
Consider your employees’ point of view: How do they see the operation, and which parts do they view as most important? What do they need to see each day that encourages them to do their best?
Painting a detailed picture of how the business will look can serve as an inspiration for where you want the business to go. It’s also a great place to start because it gets you thinking in concrete terms about the future of the business.
- How will my business act?
Next, consider how your business will behave and how work will get done. Envision the role that you want to play as the owner—are you involved daily, or is someone else in charge of operations? How do decisions get made? What type of work are you doing? You might choose to step away from the business, either to sell it or to let it run itself; in that case, ask yourself what needs to happen inside the business to make that possible.
Be sure to think about how your staff interacts with your customers and with each other. What message do you want them to convey with their actions?
Get specific about how the business will act when it’s working the way you want it to work. This is where you can start to identify the systems that are missing in your business. You don’t have to create all of them now, but including those systems as goals within the vision helps create a sense of priorities and focus for doing the work. Creating a strong framework helps you build toward the business that you want to own and make decisions that move you closer to where you want to go.
- How will people feel?
More specifically, how do you want people to feel when they engage with your business? Being deliberate about the emotional impact your business will have goes a long way toward achieving your vision in the long-term.
Be deliberate about how you want people to feel after they deal with your company; this could mean customers, employees, or even vendors. Then, look for ways to impart that feeling throughout the business. Why are your employees excited to come to work each day? How can you help foster that excitement and bring it to your customers as well? Why do your customers choose to do business with you? What kind of service should people expect from your company? How do they feel when they walk in the door? The answers to these questions will help color the picture of what you’re working to create.
People make choices based on feeling and emotion, and then our brains find reasons to rationalize those choices. That means that addressing feelings first can put you at an advantage. Be deliberate with the choices you make about the emotions you want to generate, and your entire business will benefit.
- How will my business perform?
Many people find it challenging to set firm goals for the performance of their business. Putting specific numbers on things like revenues, profits or expansion opportunities might seem daunting, but it’s key to achieving your long-term business goals. If it helps, break it down into smaller details and questions.
Ask yourself how your personal goals align with the business goals. How much will you earn as the owner of the business? What will your profit margins be? What will you do with the profits? What other performance measures are important for your company? Do you foresee expanding to new locations? Your answers to these questions will set the benchmarks for the future of the company, so it’s important to set goals that are both realistic and challenging—they should require you to grow beyond where you’re at right now in order to achieve them.
Setting performance goals and putting them in writing makes it much more likely that you’ll achieve them. You’ll be able to measure your progress toward these goals throughout your business, and they’ll give you plenty of vital feedback along the way. And even if you fall short of some goals doesn’t mean that you’ve failed; each result you get is another data point that you can use to make decisions, make adjustments, and continue to grow.
As you work toward the business that you want to own, think of your vision document as your north star: the constant presence that you use to set your course. Focusing on these four keys will give you a rich, detailed picture of where you’re going and make it much more likely that you’ll get there. Take the time to get them right, and you’ll have clear daily guidance to withstand the inevitable storms—and the confidence that comes from knowing your destination.
Are you curious what your business is worth? Take this brief survey and we will provide you with a complimentary valuation with insights on how you can grow the value going forward. Whether you are planning to sell soon or years from now, we will give you insights from the market that will help you better understand:
- What your business is worth
- What key value drivers have the greatest impact on the business valuation
- What you can do to maximize your return on this all important investment
Each day you are making decisions that impact your future and these insights can help get the most from your business. Click here to take the Value Builder Survey.
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What a Buyer May Really Be Looking At
Buyers, as part of their due diligence, usually employ accountants to check the numbers and attorneys to both look at legal issues and draft or review documents. Buyers may also bring in other professionals to look at the business’ operations. The prudent buyer is also looking behind the scenes to make sure there are not any “skeletons in the closet.” It makes sense for a seller to be just as prudent. Knowing what the prudent buyer may be checking can be a big help. A business intermediary professional is a good person to help a seller look at these issues. They are very familiar with what buyers are looking for when considering a company to purchase.
Here are some examples of things that a prudent buyer will be checking:
Finance
- Is the business taking all of the trade discounts available or is it late in paying its bills? This could indicate poor cash management policies.
- Checking the gross margins for the past several years might indicate a lack of control, price erosion or several other deficiencies.
- Has the business used all of its bank credit lines? Does the bank or any creditor have the company on any kind of credit watch?
- Does the company have monthly financial statements? Are the annual financials prepared on a timely basis?
Management
- Is the owner constantly interrupted by telephone calls or demands that require immediate attention? This may indicate a business in crisis.
- Has the business experienced a lot of management turnover over the past few years?
- If there are any employees working in the business, do they take pride in what they do and in the business itself?
Manufacturing
- What is the inventory turnover? Does the company have too many suppliers?
- Is the business in a stagnant or dying market, and can it shift gears rapidly to make changes or enter new markets?
Marketing
- Is the business introducing new products or services?
- Is the business experiencing loss of market share, especially compared to the competition? Price increases may increase dollar sales, but the real measure is unit sales.
When business owners consider selling, it will pay big dividends for them to consider the areas listed above and make whatever changes are appropriate to deal with them. It makes good business sense to not only review them, but also to resolve as many of the issues outlined above as possible.
Copyright: Business Brokerage Press, Inc.
The post What a Buyer May Really Be Looking At appeared first on Deal Studio – Automate, accelerate and elevate your deal making.
Should You Sell Your Business in 2021?
Published in Inc. – April 28, 2021 – By: Bob House from BizBuySell.com
Buyer Demand Remains Strong, The Economy is Recovering, Should You Sell Your Business
As the pandemic weakens its footprint, the U.S. economy is already showing signs of recovery. People are becoming vaccinated, restrictions are being lifted, and consumer spending is surging as an increasing number of businesses are re-opening and welcome Spring shoppers.
Over the past year, many owners have been focused on keeping their business afloat and navigating public health orders, rather than planning their exit strategy. Now that that things are turning around, should you start looking for a buyer? Well, that depending on a few factors.
Here are 3 things you should consider before deciding to sell (or not sell) your business in 2021:
Buyers Demand Has Been Strong and Is Expected to Continue. Since Q2 2020, buyers have been actively seeking opportunities. In fact, BizBuySell.com site traffic has been exceeding pre-pandemic levels, as buyers flock to high performing, pandemic-resistant businesses levels. According to BizBuySell’s Insight Report, the median revenue and cash flow of businesses sold in Q1 ’21 were both up 15% and 7%, respectively. As a result, buyers have been paying premium prices for these businesses, with the median selling price up 30% year-over-year. If your business has been over-performing during the pandemic, now may be your change to get out on top. If your business has been struggling, it may be better to recover value first.
Buyers Are Shifting Focus to Battle-Tested Pandemic Survivors. While high performing businesses have been the hot commodity to date, many buyers are not interested in paying the associated premium. According to an April BizBuySell survey, most buyers (54%) say they are looking for businesses only maintaining pre-pandemic performance and 52% would even prefer the discount associated with an impacted business versus seeking one exceeding pre-pandemic levels (37%). Depending on where you fit in this range, you may have some flexibility to extend or expedite your exit.
Business for Sale Inventory is Expected to Grow and Diversify. While demand has been high during the pandemic, supply has been limited due to many depressed businesses waiting on the sidelines. As more businesses re-open and benefit from pent up consumer demand, more owners will regain value and enter the market. This is especially true for Baby Boomers who make up a large majority of business owners preparing to retire and exit their businesses. If you are ready to sell now and can receive a suitable price, it may be best to enter the market before competition increases.
While things are looking brighter in 2021, there are many market variables to consider when selling a business. In addition, you need to have a good sense of your business value and a plan for what you will do after you exit. As every market is different, as is every business, your best move is to contact a professional business broker who can advise you based on your unique circumstances. You don’t have to sell your business, but you will feel better knowing if you could.
Are you curious what your business is worth? Take this brief survey and we will provide you with a complimentary valuation with insights on how you can grow the value going forward. Whether you are planning to sell soon or years from now, we will give you insights from the market that will help you better understand:
- What your business is worth
- What key value drivers have the greatest impact on the business valuation
- What you can do to maximize your return on this all important investment
Each day you are making decisions that impact your future and these insights can help get the most from your business. Click here to take the Value Builder Survey.
Read More
Do You Have What It Takes to Find Success in the 21st Century?
There is no doubt that the times are definitely changing. The COVID-19 pandemic has caused a shift across many industries, and the simple fact is that many industries will never return to the old normal. Success in the 21st century will require a good deal of adaptation and the ability to evaluate where you stand today and where you need to be tomorrow.
Flexible Thinking
One of the cornerstones of being successful in life and in business is to embrace flexible thinking. A flexible approach to problems can lead to finding new and highly effective ways of tackling problems. Being able to find success in the 21st century is about much more than simply riding the next technological wave or trend. Instead, it is about being amongst the first to use flexible thinking to spot trends and developments ahead of the competition and exploit those developments first. Technology and the world are changing faster than ever. Being able to utilize fluid, flexible thinking to identify problems and then seek out cutting-edge solutions to those problems will be a key aspect for success in this century.
A Solid Plan
Flexible thinking is essential for success, but so is having a plan. Just as business leaders needed a plan to achieve final success two-thousand years ago, the same holds true today. In many ways, evolving technology has not reshaped basic logic.
You’ll want your business plan to strike the right balance between being rigid and flexible. At the same time, you’ll need a solid business plan that includes specific written goals and concrete time frames.
Embracing Technology
The days of ignoring technology or “working around” it are simply gone. The modern business landscape has integrated not just digital marketing, but digital financial transactions as well. This trend is only going to become more pronounced in the coming years.
The business landscape means understanding and embracing the fact that commerce now has a massive digital component at every level. The pandemic has served to accelerate this fact and has very likely permanently changed how business will be conducted in the future. Whether it is meeting clients or customers online for a Zoom or Skype meeting, embracing digital marketing, or a range of other changes, it is essential for business owners to recognize change and incorporate it into their business and their long-term plans.
You can try to fight the future, but in the end you will fail. Charting the right course for the future means having the right mindset and a great support team in your corner. Business Brokers and M&A Advisors are experts at helping business owners prepare their businesses for sale. Demonstrating that your business has adapted to the dynamic and ever-changing environment will help you make your business much more attractive to prospective buyers.
Copyright: Business Brokerage Press, Inc.
The post Do You Have What It Takes to Find Success in the 21st Century? appeared first on Deal Studio – Automate, accelerate and elevate your deal making.
What You Should Know About Selling Your Business
There can be no doubt that selling your business stands as one of the most complex and important decisions you’ll likely ever make. It is quite often the case that a business represents decades, or even a lifetime, of dedicated work. In this article, we’ll examine some of the key steps that you should take when it comes time to sell.
One of the most important steps that any seller can take is to begin the sales process far in advance of the date that he or she plans to put the business on the market. Working with an experienced business broker or M&A advisor (and doing so preferably years in advance) is one of the single best ways to ensure that you’ll be ready to sell your business when the time comes. It will also help you to avoid the numerous pitfalls that potentially await.
A good brokerage professional can also help identify weaknesses in your business and help you address those issues; however, this is only the beginning. Your broker can help you with everything from strategy and negotiations, maintaining confidentiality and establishing the market value of your business, to connecting you with other seasoned professionals, such as accountants and lawyers.
A third key point that all sellers should consider is their own psychology. It is vital that all sellers remain flexible in their approach to selling their business and also remain respectful of prospective buyers. It is important that you put yourself in the shoes of your buyer and try to think of what they will need to feel confident in their decision.
The right seller psychology is also absolutely essential. Sellers should not attempt to rush or force a sale or overprice their business. In short, you need to keep “your head in the game” and as much as possible, keep your emotions out of the process.
Sellers also need to realize that the statistics strongly indicate that seller financing is likely. Only 75% of sellers ultimately receive their asking price, and businesses that are listed as “all cash” generally don’t sell. Reasonable sales terms will greatly increase the chances of successfully selling a business. It is common that sellers fail to realize just how much interest they can generate by financing the sale of their business. A reasonable down payment is also another way to improve the odds of selling a business. Being willing to offer financing makes a clear statement to a prospective buyer that you believe in the business and its ability to generate revenue. From a buyer’s perspective an “all cash” demand can be a red flag.
At the end of the day, an open mind and steady temperament will increase your chances of selling. You may want to sell your business and completely move on to new things. But the reality of selling a business is such that “walking away” may not be feasible. Transitioning your business into the hands of a new owner is usually more of an ongoing process than a “sign on the dotted line and receive a check” type of situation. Understanding this fact, and working closely with a business broker or M&A advisor in advance of selling your business, will help to streamline the sales process and greatly improve your chances of a successful outcome.
Copyright: Business Brokerage Press, Inc.
The post What You Should Know About Selling Your Business appeared first on Deal Studio – Automate, accelerate and elevate your deal making.