She asked . . .
How does it work in the real-world? There are so many technicalities and complexities with this topic. I just don’t know where to spend the little time that I have for this. What do I need to know, or do, to be able to sell my small business someday? What’s the practical answer?
Great question. Let’s set the technical fog aside and look at the real-world information every small business owner needs to know if they want to sell their business someday . . .
The Odds Are Against You
This might seem like a discouraging place to start, but success begins with understanding the landscape, and the environment here is working against you. Less than 20% of small businesses will sell successfully. In contrast, most owners assume they will be able to sell their business. This gap between reality and expectation destroys more sales than anything else.
You can make a sale happen, but you need to know it is an uphill journey requiring focused commitment. Misplaced optimism will kill your chance to sell.
It’s time to put on your climbing gear.
You Increase Your Odds by Acting Intentionally
To sell a business, you need to have a business that a buyer is able to, and wants to, buy. Knowing if you have that requires a change in perspective from an owner’s view to a buyer’s view. This viewpoint change is not easy or natural for an owner. It forces us to think differently about our business. This does not happen accidentally. It requires intention. You must stop on a regular basis, realign your thinking, and ask:
How would a buyer view my business?
You Need to Get Ahead of Yourself
Your business needs to be “ready for sale” before you are personally “ready to sell.” This might be the hardest part.
We think we can wait until we want to sell before we have to consider this topic. That simply doesn’t work. If you wait until you are ready to sell to engage this process, it’s almost certain you will fail to sell.
Simply put, you need to get ahead of yourself.
As soon as your business is financially self-sustaining you need to prioritize getting the business sale ready. That doesn’t mean you’re going to sell it. It means you are creating the core, long-term elements that make it attractive to a potential buyer. This provides a double reward. First it prepares the business for the day you decide you want to move-on (that day usually sneaks up on an owner). Secondly, a business that is “ready for sale” is the best kind of business to own – even if you never decide to sell it.
You win either way, but only if you get ahead of yourself.
“How to Sell” Doesn’t Matter
Professionals in the “sell a business” industry make money as masters of the “how to sell” process, so it’s understandable that they highlight the importance of “how to sell.” Because of that, you’ll be tempted to think that learning “how to sell” matters. It doesn’t. Don’t waste your time. Especially right now.
Ignore “how to sell” and focus entirely on creating a business that can be sold.
- If you have a sell-able business, the professionals will happily line up and bring the “how to sell” expertise to you whenever you’re ready.
- If you have an un-sell-able business, all your “how to sell” knowledge is wasted.
Success in selling is almost entirely about the business being sold, and not the process that is used to sell it.
Focus on the business.
You Sell Your Results
We’ve referred to the sell-able business above. So, what makes a business sell-able? For most small business owners, being able to sell a business comes down to one thing: the actual results the business generates.
If you can answer yes to these three questions about your results you are well on your way to owning a business you can sell. If you can’t, you probably don’t have a sell-able business. Don’t get lost in secret formulas that you are told determine the value of your business.
It’s about the actual results – focus there.
Start Now and Do Anything
Some advocate exclusively for their own programs and systems, and that’s understandable. Certainly, there are a lot of legitimate ways to improve your odds of selling your business – and really only one wrong way.
Waiting is the wrong way.
Unfortunately, that’s what most owners do. We wait and then we fail.
Don’t wait. Start now.
Do something. Do anything. Don’t know where to start? Just set aside 30 minutes this month to start learning. Then do it again next month, and the next. You will learn. You will find resources. You will start your way up the mountain and towards a successful sale.
You Can Beat the Odds
You can create a business that you can sell. It takes effort and intention.
That’s how it works in the real-world.