Every business benefits from having an exit strategy. An exit strategy is a plan to sell the business at some point the future.
Making a business attractive to a potential buyer has the extra benefit of making the business stronger and making it more valuable. When a business operates in such a way to increase its value, it operates more efficiently and more in alignment with the long-term goals for success.
The first thing to think about for selling the business is who will be the buyer. The buyer can be an existing business partner or a family member who has an interest in continuing the operations of the business. Other potential buyers are third parties, especially companies that are competitors.
A potential buyer will be interested in the company’s revenues, profits, and to see that sales are growing each year. A buyer likes to see reoccurring income that supports continued business operations. Other things important to a buyer are strong administrative policies and standard operating procedures.
A talented executive team should be able to operate the company successfully without the owner’s participation. It is a big plus for the business to have something proprietary (such as patent rights) and that the products or services of the business fill the needs of a significant market niche.
Accounting systems with information that is up-to-date, sufficient IT infrastructure to manage data and recordkeeping, and proper legal documentation of important business items such as sales contracts, all need to be in perfect shape. For any physical facilities, long-term leases that have pre-determined rental amounts, at a good rate, are important.
A business owner benefits from being able to step back from a business, step away from a business, and analyze the true value of a business. One of the best ways to do this is to review long-term strategic goals frequently to see if progress is being made towards increasing the business valuation. The true value of any business is what someone else is willing to pay for it. Businesses that are built with the intent to sell are stronger than other businesses. If you are interested in discussing these steps further please contact us at The McLinden Group.
Albert Humphrey, working at Stanford University during the 1960's, invented the SWOT analysis as a method to use to learn why companies fail.
SWOT is an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats. The easiest way to create a SWOT analysis is to use a chart with four quadrants, with each quadrant representing one of the categories.
Strengths are positive internal characteristics. An example of strength is if an organization has a patented, innovative device ready for a new product launch.
Weaknesses are negative internal characteristics. An example of a weakness would be not having enough money to keep the business going forward properly.
Opportunities are positive external characteristics. An example of an opportunity would be the chance to answer a Request for Proposals (RFP) from a government agency that needs the company’s innovative device.
Threats are negative external characteristics. An example of a threat would be having knowledge that a competitor is about to release a product that is significantly better than one the company makes.
SWOT analysis is a popular tool to make a quick analysis of a business and its market. It is useful for team discussions to identify things of major significance for a company.
Small business owners are increasingly using cloud-computing services to support and expand their businesses. The Inc. website reported on a study by Xero of 1200 small businesses, which showed that the ones using cloud services, to run at least one-quarter of their operations, increased from 23.5% around 18 months ago to 71% now, during fall 2016.
There are many advantages gained by small businesses that use cloud-computing services. There is no need for large capital investments and it is easier to use IT support services that include automatic software updates. Few small businesses could invest in the IT equipment needed to provide the services that they can purchase more efficiently, on a subscription basis, from a cloud-computing provider.
With cloud computing, there is flexibility in adding new services and scalability as the business grows. Moreover, access to cloud services by using mobile devices is becoming more popular.
By using cloud services, small business owners are able to concentrate on what they do best, which is to acquire customers and build up a loyal customer base.
With so much competition from large companies it is tough for small companies to sustain and survive. Using some of these offbeat tips may help to promote growth.
Try joining a large business as an outsourcing partner which will save time and money for both components. Staying connected via a cloud network gives small business employees the opportunity to share files and important information quickly and securely.
Project Management Apps are also an asset. Handling projects is vital to a small business - but also time consuming. Using business apps cuts the time by half and allows you to divide the project in separate units. Coupling this concept with Automation will save you a bundle of money by giving you apps to do all the work and organizing for you.
User-Generated Content is a great way to get user reviews and feedback for your company, it's also one of the easiest marketing strategies. Last but not least, learn from mistakes via failure. When you see a project plummeting review all aspects of that and use it to boost your knowledge for upcoming projects.
The Small Business Administration reports that 55% of all business in America comes from small business operations and 66% of the new jobs in the next years will come from small business. The steps below will help you stay successful and grow your business quickly.
Growth is Necessary for Success
Just as a beautiful garden needs growth to thrive; a small business needs growth to succeed.
Pay Attention to the Details
Growth comes from paying attention to the details and nurturing relationships with customers. Pretend to be a customer and look at the business through their eyes. If this is not possible, use “secret shoppers” to get an unbiased report of what it feels like to be a customer of your company.
Word of Mouth
Make sure your customers know you care about them and ask them for help to spread the word about your company. The most powerful advertising is “word of mouth.” This dynamic now amplifies through instant messages/photos, posts on social media, and review websites.
Hire talented and competent employees that have many friends. People with many friends automatically attract them to a new business where they work. Encourage this and reward it.
Innovate AND Monetize
Stay fresh and exciting by introducing innovations that respond to customer needs. The test is to get customers to buy more products and services. Innovation only helps if it creates revenues for the company to continue to grow.
Grow and thrive or wither and die! It is the same for a small business as a beautiful garden. Interested in driving growth? We at The McLinden Group are here to help.