[We’re starting a weekly series on selling a business in a small town, with John Warrillow, the author of Built To Sell: Turn Your Business Into One You Can Sell. John did extra research to really understand the small town perspective, and the result is an outstanding series for you. -Becky]
If you have ever sold a home, you can sell your business
Owning a business in a small town has many benefits, but one of the drawbacks is the difficulty of finding a buyer for your business when you decide it is time to move on. The pool of potential acquirers is smaller and capital for buyers is harder to find. But if you understand the process of selling a business, then you can take steps to minimize the barriers to selling your company.
Selling a home and selling a business are remarkably similar tasks. If you’ve ever felt intimidated or confused about the process of selling your company, just think of the transaction in the same way you would if you were selling your home.
Step 1: Staging
When you decide to sell a home, the first thing you do is make sure it shows well. You de-clutter cupboards, replace light bulbs, paint and perhaps rearrange some furniture to project the look or feel you think buyers want.
Staging your business is much the same:
Organize: Arrange your customer records so a prospective buyer has a sense of who your customers are, how often they buy and how much they like what you sell. If you have contracts, standardize and organize them into a neat binder or easy-to-search electronic file.
Fix what’s broken: Take an “outside in” look at your business and fix whatever is obviously broken. If your receptionist uses a phone with duct tape holding the cord into the receiver, buy a new phone. If a key piece of machinery needs maintenance, have it refurbished.
De-clutter: If you rarely offer certain products or services, get them out of sight. Remove them from customer-facing communications and eliminate any signs of stuff you no longer sell. The extra clutter will dilute buyers’ attention and distract them from the core of what makes you successful.
Put on a fresh coat of paint: Take a look at your external communications—your signage, website, logo and brochure—and make sure it is all consistently branded. A buyer will likely want to tour your office/shop/plant, so make sure your physical location is smart and tidy. Give employees a half-day away from their regular tasks to de-clutter their work area.
As you’re “staging” your business, remember the old saying: people buy with emotion and justify with logic. Staging your business is about seducing as many prospective buyers as possible to fall enough in love with your business to engage in a negotiation.
Next Wednesday, we’ll look at step 2 in selling a house or a business: finding an agent.
John Warrillow is the author of Built To Sell: Turn Your Business Into One You Can Sell. Find out if you have a sellable business – and what you could get for it – by taking the 10 question Sellability Index Quiz at www.BuiltToSell.com.