John Warrillow’s book ‘Built to Sell’ is a good book for private business owners. It’s a straightforward, fast-paced read that reinforces some simple, yet powerful messages about private business:
- From start-up, every business should be built to sell. Two thoughts:
- Starting at the beginning makes entrenching value easier
- Even if selling isn’t on an owner’s radar, private businesses are valuable assets and need to be treated that way. Who knows how an owner’s needs will change and when monetizing the asset may become an important priority.
- There are a few simple keys to building a business to sell:
- A sustainable market – one that isn’t in serious decline and/or won’t be around in a few years
- A standard product – one that can be sold at a standard price and produced to fulfill demand efficiently
- Replicable sales processes – that a sales team can learn and execute with success
- Repeatable fulfillment processes – from manufacturing to delivery
The book’s key point is that private business owners need to work on, not in the business. Businesses that depend on their owners are much less valuable when it comes time to sell.
From experience, I know it’s not easy for owners to pull themselves away from the day to day. Here’s some thoughts on how:
- Recognize that being the owner is different from being the CEO – or any other role you may have taken on. The owner’s role is to ensure value is being built into the business. The CEO’s role is to execute. Learn to be a better owner. Hire a CEO.
- Get someone to help you stand back from the business on a regular basis. A respected mentor, coach, ally, even an advisory Board or Board of Directors. Their job is to get you thinking like an owner – thinking about what value is being created and how to do it, not about the latest fire.
- Look at everything your business does and assess how easy it is to teach others to do it. If it’s impossible or very difficult to teach others – then there’s a problem – you’ll have difficulty pulling back, and the business will be less valuable to new owners.
Even if selling your business isn’t on your radar screen, thinking like an owner is a good idea. Your business will be stronger – and if you do decide to sell or transfer your business – you will be ready.
Here’s how Boardroom Metrics helps private business owners: