How to Increase Business Value

The Ultimate Guide To Selling Your Business One Day

The Essential Guide to Selling Your Business One Day And Walking Away Wealthy.

 

Nearly every entrepreneur dreams of one day selling their business for big bucks, but far too many aren’t aware of exactly what it takes to do so.

The sobering truth is that it’s very easy for business owners who don’t know what they’re doing to walk away from a sale without the financial freedom they hoped for.

  • Only about 20% of businesses for sale will successfully transfer to another owner – leaving the other 80% forced to close their doors broke and in debt.

We can show you how to build a strong exit plan, an absolute requirement if you hope to get the full value from a sale.

Selling the business you worked so hard to build can be a confusing and intimidating proposition.  Our proven system reveals and debunks myths and we deliver practical advise while we work with you through the process of planning your exit.

Whether you’re decades, years or months away from selling your business, you need to focus on an exit plan and develop a strategy.

When you do this, many things will begin to happen:

  • Your business will run smoother
  • You will gain time for yourself
  • You will have happier employees
  • Better cash flow
  • Higher efficiency
  • Happier customers
  • Business Will be more profitable
  • It will sell for more money
  • New owner will have a much higher probability of success
  • Your legacy will live on after you are gone

Building your business with an exit in mind is the smartest way to guarantee your businesses future, and your own financial health.

By working with me, you will not only guarantee a more profitable sale of your business in the future, it will also set the groundwork for a more efficient, successful and intentional present.

  1. Create your exit plan before you need it
  2. Know the value of your business
  3. Value is about more than cash flow
  4. Make yourself Expendable
  5. Selling is your best exit option
  6. Option 2 consider an internal transfer
  7. Never sell your business yourself
  8. There is more to a good deal than the sale price

How does your business stack up?

Is it sellable?

Take the Business Salability Score today and see how you stack up.

www.OurBizScore.com

Are you curious about how sellable your company is and what you would need to tweak to sell it when you’re ready?

Then it’s time to get your Value Builder Score via the questionnaire on our website.

It only takes about twelve minutes and your responses are kept confidential. You can complete the questionnaire here: www.OurBizScore.com.

 

 

 

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Business GPA

Business GPA Score

Simple Test Reveals Your Business GPA Score in 12 Minutes or Less.

Do You Know Your Business GPA Score?

The time when final exams rule the school yard and students across the country are nervously awaiting their final transcripts in order to determine whether or not they can get into the college of their dreams.

Readers might be wondering just what a GPA or “Grade Point Average” has to do with your business…right? Let me explain it to you.

Think of these eight areas as your business’s high school classes, and these classes are what you must pass in order to get the most money when you sell!

Just like a high school student must get passing grades in their subjects like Math, English, Science etc., to get a high GPA, and in turn go to a great college.

The higher the business score (GPA), the higher the value of the business.

The test gets into 8 key subject areas of your business, and you will receive your very own business ‘Report Card’ and the average of those scores will be like your own GPA. The higher the GPA- the better your business looks to potential buyers…and in turn the more value your business is worth!

You might be wondering how the score is calculated – so let me briefly explain:

Your Value Builder score is calculated through an analysis of your businesses’ performance on eight key attributes proven to be important to buyers when evaluating a business as a potential acquisition.

Your individual business score is derived from the sum of these eight Key Value Drivers using a proprietary weighting model, designed using a quantitative survey of business owners and the professionals who serve them.

This score is compared to a students’ GPA!
Again:

  • The higher the GPA a student has the better college they get into-and in the long run, the better the job they’ll get.
  • In relation to your business, the higher your Business GPA scores on this ‘test’ the more value your business is worth and the more potential buyers will think of it as an acquisition target! It’s a WIN-WIN!

Along with your overall score, you’ll receive a result on all eight attributes that drive your score.

You will also see the average Business GPA score for each attribute among companies in your industry.
Why is that important? Well, that can really help you in determining if your business is ready to be sold, and what areas you’ll need to improve to match or exceed the industry you’re in.

After grading your business you’ll receive your own Business GPA Score from me detailing your exact score (or your GPA). This can then help you to determine what you need to focus on and what you can let slide. That way when you’re finally ready to list your business you can be secure in knowing that your business is going to be sold for the most money! The information you’re provided aims to guide you in increasing the value of your business, and again, everyone wants their business to be worth more than their competitors…right?

Head to www.BizGpaScore.com and get your Business GPA Score Today!

We grade your business in 8 key areas in order to let you know what your business excels at and what you definitely need to work on. In order for your business to be more profitable and intrigue potential buyers with your business’s salability, you need to take the steps and receive your own personalized report. You can contact me Paul@CorpInvestInt.com and we can get things going so you can be ready to sell your business at any given moment!

Visit www.BizGpaScore.com and get your Score Today!

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Are You Thinking of Selling Your Business This Year?

Are You Thinking of Selling Your Business This Year?

Whether you are ready or not, now you can feel confident with my pre-sale to do list for selling your business!

Whether you are ready to sell your business now, or sometime this year,  you can feel confident with my pre-sale to do list!

It will help make the necessary improvements to overcome your businesses’ weaknesses.

You can always find more helpful information on preparing your business for sale: click here.

The following list is a good start to preparing your business for sale in an organized and more efficient manner!

  1. Flag concern areas for improvement:Make a list of all the areas and rate them in three categories. Good, average, or poor. That way you can narrow your focus and improve the areas that need the most work. There are some main aspects potential buyers will look for, these include: Business image, legal condition, operations and organization, products and clientele, and transferability.

Buyers are attracted to business with a believable and predictable future with low risk and a reasonable reward. So consider improving these aspects of your business to appeal to potential buyers!

  1. Evaluate the list:Now that you’ve made the list, it’s time to evaluate the areas and decide if making changes are necessary to the sale of your business. It’s time to ask yourself a few more questions.

Answer either yes or no:

  • Is there a weakness in a vital area to ensure business success?
  • Is the weakness likely to lessen a buyer’s interest?
  • Will it affect the price a buyer is likely to offer?
  • Is the cost of improvement likely to be less than the price concession said weakness is likely to force?
  • Can these improvements be made within the time-frame of the sales goal?
  1. Create your improvement plan and get to work: Now that you’ve answered the questions above, you know which areas are worth improving and those that are not.

All that’s left to do is to actually do the work. Making a list and checking it twice might be a jingle for a Christmas Carol, but it won’t do a thing for making business improvements.

Your plan should include the necessary steps you’ve committed to take, the time-frame you’ll follow, all the resources you’ll commit to the effort, and how you’ll assign tasks in order to complete the improvements, etc. Once you’ve got the plan now it’s time to actually get to work.  This will not only improve your business and its chances of a successful sale, but it also ensures you’ll get as close to your asking price! Win-Win!

It’s also necessary to keep your sale’s plans on the down-low. The hush-hush, if you will. If word happens to leak out, it could spell disaster!
It will create a negative reaction, interfering with your business operations and even its value.

It’s best to keep the sales knowledge to key staff and outside consultants- but only if they’ve all signed a non-disclosure or confidentiality agreement.

Whether you’re selling your business “As-Is” or make the improvements to increase its value and attract more buyers with deeper pockets, you need to know how your business rates against other’s in its category.

Head to this webpage (www.TheBizGrade.com) and learn how to massively improve the value of your business without increasing sales or working any harder than you already do.

It will allow you to assess your business by a survey and compares it against others in your business category. This can be beneficial to know, that way (as this article states: You can make the necessary improvements to increase value and attract more potential buyers). It’s really up to you though!

Either way, now you’re ready. Be sure to click the links within this article for more helpful information on selling your business!

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Useful Tips To Selecting a Florida Business Broker

11 Quick Tips To Selecting a Florida Business Broker

Not All Florida Business Brokers Are Created Equal …..

Selling a Business Is Not Childs Play –
Done Right, You Can Retire in Grace, Style and Comfort.

Done Wrong, Dreams Get Shattered, Families Get Destroyed And Everything You Have Ever Worked Hard For Gets Lost ….

If you’re anything like most business owners, you started or purchased a business because you thought it would give you freedom to do what you want, make the amount of money you deserve, and eventually retire with grace, style and comfort one day.

Unfortunately, most business owners never realize that dream because they find that stepping out of the picture is nearly impossible.

Here are 11 Quick Tips to Selecting a Florida Business Broker to Help You Sell Your Business.Florida Business Broker image

1. Know up front what your expectations are in a Florida Business Broker who will be selling your business.
Make sure you discuss and convey those expectations to the business broker you select. Direct and open communications about expectations and other issues with your Florida Business Broker is critical in selling your business.

2. Ask the Florida Business Broker how they are going to advertise and get the word out about your business for sale.
Make sure they allocate an adequate budget for advertising and marketing to sell your business. It takes approximately a budget of $800-$2000 in advertising and marketing costs to get successful exposure in the marketplace and reach the best qualified business buyers.

3. Have the Florida Business Broker determine the valuation of your business before you sign a listing agreement.
Ask them about a cash price vs. a price with terms involved. This is very important since over 70% of all small businesses never sell, usually due to the price being too high, or unrealistic terms and conditions on selling the business. There are many ways to structure a deal—you need a business broker who knows how to structure a transaction and can explain it to you these variances you can expect to come with an offer.

4. If the sale of your business is confidential, you need to know how the Florida Business Broker is going to keep the sale of your business quiet while still marketing it.
Make sure the business broker is using a professional Confidentiality Agreement form for your protection and keeps these on file at all times.

5. Make sure the Florida Business Broker you select has prepared your business for marketplace—are all the financials and tax returns in good order and understandable?
Do you have all documents ready for review like your lease agreement, equipment leases, and contracts with vendors, etc.? Time kills deals and if your business broker doesn’t have it together and business buyers will leave fast for another business for sale.

6. Make sure the Florida Business Broker you select to sell your business is comfortable with selling your type, location, and size of business.
It amazes me to see how many owners pick a business broker quickly out of the yellow pages without doing much homework on them. This is probably one of the most important decisions you will make for your business—make sure you pick the right Florida Business Broker to sell your business.

7. Returning phone calls in a timely manner is critical. Make sure the Florida Business Broker you select is good about getting back promptly to potential buyers.
You would be surprised how many business brokers delay calling back buyers—remember the sale of your business is in “competition” with the sale of thousands of other businesses so you want to make sure your business broker is responsive in getting back to potential buyers.

8. Time kills deals.
Make sure the business broker you select is responsive in getting things accomplished and moving things along. Deals tend to go south when parties aren’t moving forward on a deal at all times.

9. Constant and continuous communication with your Florida Business Broker is important.
Make sure you let your business broker know what your expectations are for letting you know how things are progressing (i.e., once a week updates, only call when something is going on, etc.) It’s up to you; however, it is important that sellers and business brokers have at least weekly dialogues to see how things are moving forward. Find out how many buyers have responded, and any feedback on all buyers who have expressed an interest in your business for sale.

10. Make sure you pick a Florida Business Broker who spends the needed time on your business for sale.
Some business brokers take on too many listings knowing that some may not sell—it’s a numbers game to them. You need someone who understands your business, what your expectations are, and who can properly get your business sold.

11. Businesses on average typically take 6 months to 2 years to sell.
If your Florida Business Broker does his job correctly,  your business should easily sell within 6 months.

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Special Announcement for 2016

I hope your holidays were enjoyable!

2016 is going to be a spectacular year for anyone who takes advantage of what I am about to reveal in this Special Announcement.

What this is all about…

If you¹ve been reading my emails over the past couple months, you know I¹ve been working on something HUGE.

When my wife and I bought this Corporation, we made a promise and commitment to each other that we were going to do whatever it takes to make our business the best in the industry.

Everything we¹ve done has been done with an ³Uncompromising Commitment² to become the ³Best of the Best² in our field, and so far, we¹ve been doing just that.

What I’m going to tell you about in this message is so powerful because it has just given us an ³Unmatched Ability² over all the other business consultants, coaches, and brokers out there.

This is a ³Game-Changer² for Entrepreneurs we are SUPER EXCITED To Be Sharing This With You.

*******************************************
Go Here To Watch The 8 Part Video Series

Visit www.TheBizScore.com

You’ll receive one video per day for the next 8 days.
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Three weeks ago, (after over 9 months of ³Top Secret²- ³Back-Door² Negotiations), we obtained an exclusive license to a tool that is so insightful & powerful that it can help entrepreneurs make Billions of Dollars in additional business value without increasing business sales one iota. 

I’m talking about “Business Value” – which has nothing to do with selling more and working harder.

I’m Talking About A
“Statistically Proven Way”
To Increase The Value Of A Company
By As Much As 71%.

Up until now, this program has not been available or affordable for the little guy.

It’s been a tightly held “secret tool used by only a few of the biggest and most successful Mergers and Acquisitions (M&A) guys.

Anyway – Now I Have It, and it’s going to be a ³Game-Changer² for business owners, sellers, and buyers.

Let me explain:

  • For Business Owners, this tool creates a roadmap of things they need to do and accomplish before putting their business on the market, so they can sell their business for more money then they ever thought possible. 
  • For Business Buyers, this tool will drill down before you buy a business, and point out exactly what needs to be done to increase its value.
    By identifying downside issues ahead of time, not only will you be in an advantageous negotiation position, but you will know ahead of time what you will need to do so you can begin increasing the business value immediately.

It goes without saying, that by utilizing the tool, it will also automatically and seamlessly increase sales, which will have a massive compounding effect on the business¹s bottom line profits and resale value.  

In the past, only the big-boys like Apple and Dell Computers, Harley Davidson Motorcycles had access to information like this and it cost them millions of dollars per year in salaries to make it happen.

Now I Have It
And You Can Use It
FOR FREE!

No doubt, you’ve heard the “Story-Book” … almost insane prices some business have sold for on TV, on the internet, in the newspapers, etc.

The tool I¹m willing to share with you has been a major key to producing the ³Story-Book² prices we read about. Wouldn’t you like to write your own storybook like that?

Is That Exciting Or What!

So here is the deal ­ for anyone who does business with me, or anyone else within Corporate Business Brokers. or any of our subordinate companies, you will have access to this tool and the information it provides. 

To put it another way:
If you own a business, someday you¹re going to want to sell it,
and this tool can help you increase the value of it up to 71% without growing sales. If you grow sales, (which will happen almost automatically) the business value will increase significantly and buyers will come out of the woodwork waving huge checks.

(If your business is currently worth say, $500,000 and you increase the value 71%, your business will be worth $855,000 – a $355,000 increase).

If you want to buy a business, this little gem will pretty much lead you by the hand to do the same thing because you will be the business owner. The best part is, you will know EXACTLY what the business needs BEFORE you buy it, and you will have an enormous negotiation advantage because of it.

Imagine buying a business for $500,000, pull a salary out of it while you now it, and 12-18 months later you can sell it for $855,000 and pocket a quick $355,000 – not bad … especially if you get 75% financing on the business.

  • Let me do the math. 25% of $500,000 = $125,000.
  • $125,000 investment, $355,000 profit = 184% return on your investment. 

Not Too Shabby – How’s your IRA doing by the way????

As you can tell, we are really excited to break the news to you.

Want to learn more? 

*******************************************

Get The 8 Part Video Series

Visit www.TheBizScore.com

You’ll Receive One Video Per Day For The Next 8 Days. 

*******************************************

2016 is going to be a VERY GOOD YEAR!

Let’s Make 2016 One of Our Best Years Ever!

 

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Why The Best Are Free

The Best Are Free Because They Save, or Make You More Than They Cost

You might be wondering what all that gibberish means, so I’ve outlined three scenarios for you, each detailing why the best are really free.

First you might need a re-education of what ‘free’ really means. Sure it relates to your personal freedoms. And yeah, you’re right; freeing slaves or a person who is oppressed is also a definition. So what does free mean?

Free can be one of three things:

  1. an adjective,
  2. an adverb, or
  3. a verb.

It all really just depends on the way you’re using the word, or interpret its true meaning.

It seems like everyone these days is taking advantage of poor helpless victims. Taking away their ‘free’ and charging ridiculous rates for something you could have done on your own! I’d like to show you a couple of examples of why the best are free. I challenge you to choose which is the best in each example…then we’ll see how well you do!

The first example is pretty easy, you ready?

There are two accountants to choose from. Accountant A charges $4,000 to do your taxes while accountant B charges only $1,000.

Do you already know who the best is? Probably not – keep reading.

Now, let’s suppose you made $125,000 last year and end up with a $15,000 tax bill- no biggie right? It can be scary to some people, but for others, depending on how you look at it, might be grateful for making $125,000 in the first place.

So let’s get back on track here:
Accountant A finds legal loopholes and strategies, and sets you up with a defined benefit program where you can deposit a sizable amount of cash into, and you end up with a final tax bill of $2,500. (and $10,000 in your defined benefit retirement plan)

Long story short, you end up paying the Accountant $4,000, pay the IRS $2,500, costing you $6,500. (but you also got $10,000 in retirement tucked away)

Go accountant A!!

Now lets take a look at Accountant B, he does the minimal amount of work and you pay him $1,000 for doing the work and write a check to the IRS for $10,000. Costing you $11,000, (And nothing in your retirement).

Wrapping it up,

Accountant A: Total cost $6,500

Accountant B: Total Cost $11,000

Basic Math:
Accountant A SAVED You $4,500 (Plus another 10 Grand in your retirement)

Looking at this example, which one cost you less money? Obviously, Accountant A.
He was the best because he made or saved you a heck of a lot more than he cost!

Now Lets Take a Look At This From A Business Brokerage Side of Things:

You have a business you want to sell.

The gross sales are $1,000,000. Net profit (EBITDA) is at $150,000.
A reasonable ‘For Sale’ asking price is normally 2.5 times the net profit, (EBITDA) or in this case about $375,000.

  • Business Broker A charges 15% commission on the sale. That equals $56,250.
  • Business Broker B charges only 8% commission on the sale, or $30,000.

Business Broker B takes the information provided and plunks the business in the MLS system and waits for a buyer to come along. (Statistically, this type of business listing has a 24% chance of selling within a year, and will sell for approximately 75% of your asking price.

8 months go by, no action and the broker talks you into lowering the price to $350,000.
Three more months go by and finally – you have an offer for 75% of the asking price. You counter the offer and settle at a 20% discount, or a final sales price of $ $280,000.

Now you need to pay Broker 8% commission, ($22,400) and end up walking with $257.600.
A bit disappointing, but your out of the business after 12 months, and you can move on to other things.

Now Let’s just jump onto Broker A:

He does things completely differently.
He has you take an online business scoring survey (www.OurBizScore.com) and get a Sellability Score of 64.

You send him copies of your past 3 years Tax Returns, P&L Statements and Balance Sheets.

About a week later, he then has you come into his office for a private and confidential meeting (Confidentiality is of utmost importance so you go to his office because the “Walls don’t have ears” in his office).

At the office, you go over the Business Score and he points out a few things you can do immediately to begin increasing your score and by the end of the meeting you decide to hire his firm for $1,200 per month.

He assures you he and his team can help you increase your Sellability Score and increase the sales price of your business.

You and his team are going to work on “Staging” the business before put it on the market.

You find is a bit hard to swallow, but everything he had to say made sense and he has the statistics to back up his claims. So you bite the bullet and go along.
After-all ….. no other Business Broker you have ever talked with has given you this much information. All the wanted to do was get you to sign a listing agreement!

FAST FORWARD 4 MONTHS:

  • Your books are clean as a whistle and you are showing higher profits on paper.
  • You’ve developed a couple operating procedures and the employees are doing more work without you actually being there.
  • Because you have more time on your hands, you have gotten your suppliers to lower their fees and terms.
  • You fired a few bad customers and this has made it possible for you to add a few new ones.
  • Because you’re not needed every minute in the business, you begin attending more functions and actually begin enjoying it.

All in all, the business has a positive story and bright future because of the work you did together and it I on track to be running itself within the next couple months.

Instead of listing the business for sale at the previous revenue, you have built up the value of the business and have increased the actual EBITDA to $175,000 with a multiple of 3, and have a higher “projected and predictable” future earnings of an additional $25,000, so you now list the business at a price of $600,000 ($200,000 times 3) which give you a new listing price of $600,000.

Remember- during these past four months you’ve been paying Broker 1 monthly, resulting in $4,800 in ‘staging’ fees, but at the same time, profits have increased by $9,000 over the same timeframe, leaving you with an additional profit of $5,200 or about $1,300 per month.

Now the business is listed at $600,000. A buyer comes along within the next four months offering you 90% of your asking price, or $540,000 Cash, Close in 30 days. You accept the offer. (which is $225,000 HIGHER Than Broker B).

Broker A’s breakdown goes a little something like this:

  • $540,000 sale price minus 15% commission (of $,81,000) = $459,000.
  • $1,300 additional profit per month, over 8 months = $10,400.
  • Your ‘Net” after 8 months proceeds = $469,400.

Comparing apples to apples;

  • With Broker A you walk with $469,400…and that’s pretty dang good!
  • With Broker B, you walk with only $257,600.
  • The difference is a whopping $211,800.

It’s easy to understand why the best are free because they save or make you more money than they cost!

As you can see by this second scenario, just because Broker A charged more upfront, asking for a higher commission rate- he also did twice the amount of work that Broker B and made you a whole lot more money!

Moral of the Story:
The Best Are Free Because The Save,
or Make You More Than They Cost.

At Corporate Business Brokers, we do the same thing other Business Brokers Do, and We Also Do More Because We Offer Business Staging and Business Value Builder Services.

To learn more about Corporate Business Brokers and what we do, feel free to contact us.

 

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Merry Christmas!

Merry Christmas from all of us at Corporate Business Brokers!

We wish you a Very Merry Christmas and Happy New Year!

2015 has turned out to be a very good year for many of us in the Business Brokerage Business, and by the looks of things, 2016 will be even better!

We will be revealing a new product and service in 2016 that will probably revolutionize the industry because of the value it will bring to both business buyers and sellers.

Baby Boomers are finally retiring and moving to the warmer climate, so the population is growing and with it, demand for products and services from local businesses, making for a “Ripe” environment for entrepreneurs.

  • Businesses are making more money
  • Businesses Sellers are more confident about the future, so they are now beginning to put their business up for sale with upward trending financials.
  • Business Buyers are out there looking for deals
  • SBA lending is a lot easier to get than it has been for the past 5 years, so Business Buyers can borrow money!
  • The Fed just raised interest rates up, which will trigger local banks to begin lending again!

All Positive News For Business Buyers, Sellers, and Brokers!

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How to Increase Business Value

Video How to Increase Business Value By 71% Or More

Video How to Increase Business Value By 71% Or More

If you’re like most business owners, you would like to learn how to How to Increase Business Value because the majority of your wealth is tied up in your company.

By increasing the value of your company, you increase your net worth significantly.

I’d like to introduce you to a statistically proven way to increase business value by 71% or more.

Through a quantitative analysis of over 18,000 businesses, we’ve discovered that companies that achieve a Value Builder Score of 80+ out of a possible 100 receive offers to buy their business that are 71% higher than what the average company receives.

… And this can be done in as little as 12- 18 months with little effort on your part.

Get Your Value Builder Score Now:
http://corpbizbroker.com/score/ 

Announcing the Business Value Builder Score – For a limited time, you can get your Value Builder Score completely FREE and without any obligation on your part whatsoever.

Once you have your score, you’ll be able to compare it to eight key drivers to company value.
Like a pilot working his instrument panel, you can quickly zero in on which of the eight drivers is dragging down your value the most and then take corrective action.

Your overall Value Builder Score is derived from your performance on the eight attributes that drive the value of your company:

  1. Financial Performance:
  2. Growth Potential:
  3. The Switzerland Structure:
  4. The Valuation Teeter Totter:
  5. The Hierarchy of Recurring Revenue:
  6. The Monopoly Control:
  7. Customer Satisfaction:
  8. Hub & Spoke:

To find out how you’re performing on the eight key drivers of company value and start your journey to increasing the value of your largest asset.

To Learn more about How to Increase Business Value:

Get Your Value Builder Score Now:
http://corpbizbroker.com/score/ 

Copyright How to Increase Business Value

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Business Vision – How to Survive In Todays Business Climate

No Matter How Good or Bad the Economy is, BUSINESS VISION is Very Important For The Small business Owner.

Business Vision

NOW is A Terrific Time of Opportunity For Small and Businesses Owners who have Leadership, Business Vision and a Bit of Chutzpah.

We are coming out of a very challenging time in the business cycle and entrepreneurs with “Business Vision” are perfectly positioned to make major advances in their companies if they have their eyes open and ears to the ground.

Business Vision is probably single most important thing a business owner can have because it give the business owner with the ability “see” things others can’t, so they can strategize, reposition and capitalize on the current situation knowing full well the next economic cycle that is right around the corner.

Business owners who have Business Vision are well aware of economic cycles and adjust accordingly.

Small and mid-size businesses have distinct advantages over big businesses when it comes to this type of repositioning because:

  • They are more agile and flexible than larger organizations.
  • They can act faster and respond to change immediately.
  • They are more nimble and less wedded to the status quo.
  • Smaller companies normally carry less inventory and lower overhead costs.
  • They have fewer legacy systems.
  • They are not as encumbered with lethargic assumptions, policies, procedures and methods.

So how does a savvy business owner go about repositioning for a rapidly changing future?

Begin by assessing the market for your line of business as it is now, and as it might be in two, five or ten years. Identify the shifts and changes on the horizon. Analyze what they will mean for your company, your suppliers, your clients, your competitors and the overall industry.

View it as a big chess game and plan your strategy.

For many business owners, now is a very good time to plan for an exit because money is beginning to loosen up and buyers are beginning to look around.

Listed below are 9 items you want to consider whether you are thinking of expanding or exiting.

  1. Cash flow. Now more than ever it is crucial to manage your cash flow and keep your balance sheet strong. In addition to maintaining liquidity for ongoing operations, staying within your financial constraints and ensuring your bond or credit rating. It is vital for you keep your powder dry to be able to take advantage of opportunities as they arise.
  2. Inventory. Adjustments to inventory will be critical, as a surplus of goods can tie up cash reserves. In todays world of overnight deliveries, it is not necessary to carry large quantities of anything. Slash inventory and stack cash so you have it available when you need it.
  3. Products and Services. The time is right to make those tough choices about shedding low-margin or legacy products. Focus on products and services where you have special expertise, a defined value proposition, and a competitive advantage. R&D is more important than ever.
  4. Personnel. People are a company’s most valuable. It might be tempting to slash payroll as way to cut expenses quickly, but layoffs can also have costs and hassles such as severance, loss of talent and leadership, and then you also have the expense of finding, hiring and training new employees when the economy returns. The key is to keep employee expenses in line with revenue.
  5. M&A. As the recession plays out, there will be some choice opportunities to take over competitors, expand into new areas and acquire other capabilities. Consider adding small add-ons to increase capacity, buying out larger competitors to enhance market share, etc. Also think about buying real estate while prices and interest rates are still favorable. It might be a good time for you to buy prime locations and move into a new market.
  6. Sales and Marketing. Use technology to target your audience precisely and monitor your ROI on marketing and advertising. Fully capitalize on Social Media. Focus hard on sales to build your brand, increase market share, and penetrate underserved markets.
  7. Pricing and Margin. The proper balance between growing market share and holding onto profit margins calls for a never-ending focus on profitability and cash generation.
    Your value proposition should rely on quality and service as well as price. Avoid price undercutting to gain market share. Do the opposite and deliver value. Let the competition play the price war game. It will come back to bite them in the future.
  8. Cost control. Cut costs in ways that doesn’t affect customer service or product quality. Ask creditors to extend payables from 30 to 60 days if you can. Negotiate discounts from suppliers and possibly your landlord. Pay down debt, re-negotiate loans and contract terms. Be opportunistic about financing and sourcing opportunities.
  9. Customer Service. Build stronger relationships with existing clients, especially loyal, long-term clients. Helping your customers get through this difficult time will pay off. Offer loyalty and referral rewards. Remember the 80% – 20% rule.
    80% of business comes from people who have done business with you in the past, and only 20% of business comes in the form of new business. Take care of your customers – and they will take care of you.

 

If your Business Vision is to expand, the above mentioned list will position you to take immediate action when an opportunity comes along.

If your Business Vision is to sell, a buyer will be looking at the same 9 items to determine the value of your company.

Buyers Buy a Documented Believable Future of a business – so the better you have things documented, the better the price you can expect.

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