We have seen in a previous article that the type of business having the least chance of succession related failure, and therefore considered the most valuable to a prospective buyer are culture driven businesses. In this environment, the culture (driven by both people and systems) make the business happen. It is considered as close to a pure “investment” as a business can come. Its culture indoctrinates new hires into an environment of continuous improvement, based on systems completely independent from their owners. The result is what we call, a “Culture of Excellence”.
Find out in the simple test below if your business is ready for your departure. Rate each question from 1 to 10, 1 being the lowest mark:
A score below 50 means that if you leave the business now there is a great chance that it will collapse. 51 to 80 you have room for improvement. Above 80 your business will survive your departure.
Measuring goodwill can be subjective but to be as impartial as possible you should analyse all aspects of your business value
The goal of this exercise is to work toward higher goodwill value to do so you should understand for each driver how much they are dependent on you, your staff or systems
You should then dig down further understanding the general value indicators and how well you perform in each of them
Each business driver should be divided in sub categories
You can now begin to build the goodwill value of your business in a systematic method using some specific tools.
The main tools are:
1) Business Manual: Organizes every aspect of your business including, Operating Manual, Strategies, Organizational structure, Systems, Training programs, Find your lease. If you rent space, you may be required to notify your landlord if you intend to sell your company. Read through the fine print and ensure you’re not scrambling at the last minute to seek permission from your landlord to sell.
2) Employee Manuals: Organizes all of the information necessary for managing, training, and empowering your employees. Employee handbook, Office policies, Job descriptions and so forth…
3) Analysis Manual: Tracks your progress towards your business objectives. KPIs etc. That which is inspected is respected – measure what you want to improve.
4) Business Calendar: Organizes and manages your business development activities according to a schedule eg. Weekly sales forecast, monthly operation reviews, quarterly board meetings…
5) Get your Sellability Score. Take 13 minutes to answer the Sellability questionnaire now. You’ll see how you performed on the eight key drivers of Sellability and you can identify any gaps you need to fill before taking your business to market.
Increasing value should be the business owner’s number one goal. By focusing on value, you get:
If you have a question or disagree with me please leave a comment on this blog. I will respond promptly so we can have a fruitful discussion
If you like this article please share this link with your friends on social media, your Blog or by e-mail
If you envisage to transition out of your business in the near future and would want to explore what you should do please do not hesitate to call Jean-Bertrand de Lartigue on +44 1656 766 363 or e- mail him at JB@macint.co.uk