Why you need to beselling your company every day
Special to The Globe and Mail
Published Tuesday, Aug. 02, 2016 9:40AM EDT
About a year ago, I was listening to a prominentaccountant speak to a room full of business owners. His message was both clearand simple: “Each day you should run your business like you are in the processof trying to sell it.”
This simple message created many frowns andfurrowed brows. Clearly, people in the audience wanted to respond, “But I’m notselling my business, and I don’t plan to any time soon.”
Not the point.
It doesn’t matter whether you’re thinking ofselling your business. Some lucky owners get to simply pass it on to the nextgeneration. But the real point is this: You need to think and act like you areselling your business, every day.
Why? Selling a business is an extended process,often a gruelling one. Compare it to selling a house. The first step is to“stage” the property. This means taking a hard look at your surroundings withfresh eyes, to help you recognize which furnishings and decorations add to yourhome’s ambience, and which are just clutter.
It’s a tough thing to do. For most people,everything in their home represents a memory or a milestone on the journey ofraising a family. Prospective purchasers care nothing for memory or sentiment,seeing every unnecessary element as a flaw that diminishes the value of yourhome.
When you are selling a business, the process islittle different. Prospective buyers go through your numbers, your assets andyour records with the diligence of a home inspector. They will scrutinize yoursales, margins, inventory, returns, client list, receivables and payables. Theywill dig through your sales history and your new product or service pipeline,looking for any irregularity, liability, trend or threat that could detractfrom the value they are paying for your company.
While some may see this as a tedious, time-wastingprocess, I see due diligence as a very positive exercise. It’s a way toidentify issues before they become problems. In fact, this process shouldn’tjust be limited to when you buy or sell a business. I believe thatentrepreneurs should initiate a mock due-diligence process every year,preferably just before their company’s annual retreat or strategy sessions.
Think about it. Your goal as the owner or managerof a company is to increase its intrinsic value (how much the business would beworth if it were going to be sold). By rigorously and formally questioning allof your business’s habits, assumptions and processes, you’ll develop a culturethat embraces change and continuous improvement – and increases the value ofyour business on an ongoing basis.
In my opinion, your company’s value is the singlebest measure of how well you are running and building your business. Valueincorporates all key time horizons that buyers and evaluators employ whenassessing a business – how you are running your business today, what you aredoing to keep it relevant and meaningful to your customers in the short term,and how you establish and execute on your grand, long-term vision.
“When it comes time to sell their business, manybusiness owners are surprised to receive a lower valuation than what they hadexpected,” notes Murad Bhimani, a Toronto-based partner with accounting firmMNP LLP. “That’s why we recommend to our clients that they should operate andbuild their business as though they could sell it any minute. This keeps youfocused on what is critical every day, such as sound operations, diversity ofcustomer base, building a strong management team, and proactive productdevelopment.”
If your kitchen’s ceiling is leaking, you wouldn’twait for a home inspection to find the cause and fix it. Don’t wait to seewhether your company is leaking opportunities and profits. Whether or notyou’re planning to sell, take a good long look at all of your key performanceindicators on a regular basis. Your bottom line (and your wallet) will thankyou for it.
And some day your children may, too.
Ken Tencer is chief executive officer ofdesign-driven strategy firm Spyder Works Inc. and the co-author of two books oninnovation, including the bestseller Cause a Disturbance. He holds the Institute ofCorporate Directors certification (ICD.D). Follow him on Twitter at@90PercentRule](https://twitter.com/90percentrule)
Why you need to beselling your company every day
One of the basic tools to running your own business is selling. Unfortunately, most inspector programs (except InterNACHI) do not cover this! In our future inspector training sessions, we plan to have a professional sales coach, as well as successful inspectors, help our inspectors to make their business grow!
The “soft” skills required of a Professional consultant are poles apart from the skills needed as a trades person. It’s great to hear you are taking a stab at this Gilles. Let us know how it develops please.
Business consultant inspirational BS. The consultant’s business is to get you to pay them to tell you how you should run your business
A shepherd was herding his flock in a remote pasture when suddenly a
brand-new BMW advanced out of the dust cloud towards him. The driver, a
young man in a Broni suit, Gucci shoes, Ray Ban sunglasses and YSL tie,
leaned out the window and asked the shepherd… “If I tell you exactly how
many sheep you have in your flock, will you give me one?” The shepherd
looked at the man, obviously a yuppie, then looked at his peacefully
grazing flock and calmly answered “sure”.
The yuppie parked his car, whipped out his IBM ThinkPad and connected it
to a cell phone, then he surfed to a NASA page on the internet where he
called up a GPS satellite navigation system, scanned the area, and then
opened up a database and an Excel spreadsheet with complex formulas. He
sent an email on his Blackberry and, after a few minutes, received a
response. Finally, he prints out a 130-page report on his miniaturized
printer then turns to the shepherd and says, "You have exactly 1586 sheep.
“That is correct; take one of the sheep.” said the shepherd. He watches
the young man select one of the animals and bundle it into his car.
Then the shepherd says: “If I can tell you exactly what your business is,
will you give me back my animal?”, “OK, why not.” answered the young man.
“Clearly, you are a consultant.” said the shepherd. “That’s correct.” says
the yuppie, “but how did you guess that?” “No guessing required.” answers
the shepherd. “You turned up here although nobody called you. You want to
get paid for an answer I already knew, to a question I never asked, and
you don’t know crap about my business… Now give me back my dog.”