Selling a business - The importance of getting your ducks in a row.
The current business climate is nothing if not one of concern. The COVID pandemic has put a magnifying glass on the short, medium and long term prospects of every business, large and small. Already there have been multiple layoffs, significant numbers of businesses applying for protection and more than a few that have already accepted the inevitable. Those in the latter category deserve to be lauded. It is a heartbreaking decision to close a business, any business and requires a cool head to accept that in most cases, this is the best course of action for staff and creditors.
For others, those who are in the middle of considering their options regarding whether to continue weathering the storm or to look to hand on the business to someone else, this is a particularly interesting time. Because in some ways, this may be a time when options to make a business look particularly appealing to potential purchasers has never been easier.
Yes, the turnover may be below where you had projected it would be 12 months ago, but with modern, cloud based, Saas systems you have the opportunity (and possibly the time) to improve the marketability of your business.
My own company's customers probably fit into the general profile of small to mid sized business folk doing their darnedest to make a buck/rupee/peso/pound. In my experience, these people are quite happy not to be thinking about getting on a plane or other forms of travel, the need for which has been such a big part of growing a business. The cost of being away for some days and often weeks can be significant. Never knowing if the return on investment in this travel will be positive or.....well, the other thing that is a bit like Voldemort. The thing that shall not be named unless your bank specifically asks you why the trading account has more red than normal.
My guess is that the sort of people that make up the vast majority of the SME business owners globally probably have a similar endgame in mind. That endgame is measured by a standard scale. The 'three Bs'. the Bach, the Boat and the BMW. The measurement's details might vary by country but the principal is the same. Turn your hard work into a comfortable retirement by selling the business.
Now in most economies I suspect, building a business is rarely profitable for the owner. Most if not all the profit tends to go back into the operational budget. Just ask any supportive life partner. So the end game becomes absolutely crucial to ensuring a satisfactory return on all the hard work. Our general customer base at Intuto tends to be small to medium businesses and tend to play the longer game. The reward for all the hard work comes for the most part at the end. When the business sells. When the big offer comes in. When you need to be ready for the opportunity.
And so to the point of this rather rambling piece, (essentially a thinly veiled attempt to excite interest in clicking through to an admittedly fabulous online learning platform). To whit, how does online learning help a business maximise the sale price on the day when the owners of said business decide to spend more time worrying about features of a new yacht than the overdraft in the business?
A good place to start is talking to a business broker like LINK Business Brokers, an Intuto customer who assists owners maximise the return on their years of hard work. But as LINK will tell you, ensuring that all the processes, principles and programmes relating to the way your business operates are recorded in one easily accessible location will help add a significant premium to any sales price. That way, when the potential purchaser arrives for the inevitable due diligence, you can point them to a single location that demonstrates the business is well run, that the staff are well trained and that the business will not suffer when the transfer of ownership goes through. And if you are that potential purchaser, particularly in the current climate, you'll be reassured that the business you are about invest in has systems in place that mean you can be up and running almost immediately.
Now clearly, General Electric will be a little more complicated than a regional aluminium forming operation and as such will be following a more 'expansive' approach in terms of setting up for due diligence but the principles are the same.
- Ensure the staff are properly onboarded, their training is continuous, their progress and performance recorded.
- Ensure that processes that the business employs every day are recorded and available to be reviewed by the appropriate staff when needed.
- Ensure that the day to day operational programmes are set out and easily accessible for review and revision.
Of course, an online training platform won't be the best solution to support every operational aspect of the business but it can be the central point that shows staff, contractors and key stakeholders what is expected, where and how to access and use each operational tool.
Online tools like Slack, Xero, Basecamp and so many others such as Intuto give businesses the opportunity to harness multiple specialist solutions that, when linked together, can provide a powerful single solution effectively built around the specific needs of a business. By ensuring that the staff in the business are supported by an online training solution that clearly explains how to make the most of these tools, there can be no excuse for not maximising the benefits that such tools can provide.