It is a mystery to many business owners what makes a business “saleable” and at a high value.
Author and columnist John Warrillow unravels that mystery for business owners in his new book, Built to Sell: Creating a Business That Can Thrive Without You (New York: Portfolio/Penguin).
Warrillow uses the story of Alex Stapleton, the owner of an advertising agency, who consults a wise friend about selling his business. With his friends advice, Alex transforms his relatively small, rather run-of-the-mill, advertising agency into a scalable business that was attractive to potential buyers. At 153 pages, the story is easy to read and offers plenty of personal insights. It also includes an implementation guide for the concepts he introduces in the narrative.
You may have some trouble with some of the ideas that he recommends for service business owners, such as adopting the language of products versus services. For example, he suggests referring to “customers” as opposed to “clients.” He even suggests that many service businesses would be well-advised to employ sales people with experience in product sales as opposed to selling services. He theorizes that such sales people will be better able to explain to potential customers how your business’s product meets the customer’s needs as opposed to how you can customize your service to meet the customer’s needs. He views that as an important issue in reaching the goal of scalability.
All-in-all though, Warrillow is right on with his recommendations, including that you set the goal that every product or service should meet three criteria. It should teachable, valuable and repeatable.
We sometimes have to tell business owners, just like Alex is told, that their business is practically worthless. The good news we try to share is that there is something you can do about it.
The other good news from this story is that the same steps that make your business more sellable and valuable to a buyer, will likely make it a stronger, growing and more profitable business for you as the owner, even if you don’t plan to sell it for many years.
John Warrillow is a columnist for Inc. Magazine and The Globe and Mail. His blog can be found at www.builtosell.com.
You can order a copy of Built to Sell from Amazon.com and other online book retailers.