One of the key indicators of a successful business is if it can run without the owner around or involved in the operations.  In the small business world, that might only be the case for a day or maybe a week, but rarely more.  Most owners are key players in the business and is the reason why selling them is very difficult.   Personally, it took me 10 years of running my company before I took two straight weeks off and it was hard as hell to leave. What I did learn is that my company performed better when I was gone for that longer period of time.  Not better in the sense that I don’t need to come back but better in the sense that the operations ran smoother without me around to ask questions to.   Usually when I took a week off I had to work 80 hours before I left and 80 hours when I returned and it never seemed worth the effort.  On the contrary, when I was gone for two weeks, issues… came up that could not wait for me to return and so they had to be handled without me around.  I actually came back to less issues after being gone for so long than when I was out for only one week.  Amazing.  My staff figured out how to handle issues on their own because without me around they couldn’t come to me for answers.  If I was gone for a week most people would wait until I got back but two weeks was too long to wait.   Without me there, they just did it themselves and they did a great job.

Now how this relates to selling your business is that your company is worth more, much more, if you are not required to be involved in the day to day operations.  If you want to sell your business then your operations have to get cleaned up and structured.  My suggestion is that you start with your employees and make sure you have key people in place to handle each of the key elements of your business.  You will need a good controller, and sales and operations managers who understand you and the Company goals.  It is your job to mentor them and help them become key employees with all your trust.  This gives the buyer a great starting team and comfort, thus a willingness to pay more.

The second step is to build your systems to support the employees.  This requires policies and procedures documented so everyone understands the rules of the Company.  They should be written down, agreed upon, and enforced consistently.  The process, routine, and consistnecy will allow you to be able to manage the process and make changes as required.

The final step is equipment and that includes hardware, software, tools, trucks, and everything that helps makes the operations go faster.  I always hate business owners who try to cut corners and then slow, poor running machines completely kill the momentum and any cost savings vanish.  Check out all the equipment and make sure it supports the employees and processes with the best technology available.  There should be no reason to use a dust covered 286 “just because it still works.”  Speed, efficiency, and accuracy should always be upgraded in order to maximize the value of your company.

If you can accomplish these few tasks and clean up your organization you will be happier working there and your success rate in selling the business has expontentially improved.

This entry was posted on Friday, July 31st, 2009 at 10:46 am and is filed under Sell Your Business, Exit and Answers. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.