The AIC Clarity
Series: Build your Business to Sell It – a Workshop
May 27, 2013
Led by:
Cheryl Rankin
&
Heather Freed, CFP, CLU, CHS
These are notes from a workshop given at the Association of Independent Consultants on Monday, May 27, 2013.
What to sell?
If you were to sell your business, what
could you sell? Some businesses are sold
as a complete package and others can only sell specific pieces. Many of these items will also affect the
price that you are able to ask for your business.
-
stock (raw or finished product)
-
machines
-
client list (not the business
cards, a list that is in Excel or some other format)
-
contact list
-
assets (e.g. bouncy tables)
-
property (e.g. land or
buildings)
-
contracts / agreements
-
brand / name / website
-
intellectual property (patents,
trademark, service)
-
revenue (1 year) / goodwill
-
book of business
(financial / insurance industries that
give you customers and residual income / trailers)
-
phone number
-
process (how to get clients,
process, staff – franchise)
-
training program
-
active employees (knowledge)
-
receivables
-
tax losses (special
circumstances)
Who to sell to? (Plan)
Even though you may have an idea / plan of
who you would like to sell your business to – the plan may not come together so
you are best to have other options.
-
children take over
-
children buy it
-
existing management or
employees buy it
-
competitor
-
client / customer
-
supplier / vendor
-
investor
-
sell to someone in transition
(unemployed and just got a buy out)
-
sell and stay in business as
employee or consultant
-
partner buy-out
-
someone buys in as a partner
-
foreign investor
-
immigrant
-
new business owner who does not
want to start a business from scratch
In order to make your business sellable, it
needs to be able to run without you.
Operating the business without you
The majority of small business owners are
the main source of knowledge and work efforts, so if the business owner is not
part of the business any more then the business is not as valuable and may not
be able to run. What do you need to do
in order to have your business survive a week or a month without you?
-
document all procedures
(operations manual / standard operating procedures SOP)
o it’s not tangible if it’s not documented
o critical checklists
o suggestion to systemize everything with post-it notes
-
who can check voicemail and
email?
-
list of contacts in one place
-
trained back-up
-
** passwords** (do not share
passwords but have a way to get someone passwords if it becomes necessary)
-
rotate employees in different
positions
-
financial access – make sure
someone else has access
-
virtual assistant / bookkeeper
-
list of current projects
-
signing authority (with
appropriate restrictions)
-
key dates / key actions
-
assessment of existing
employees and what they can / should be doing
-
communication plan
-
do a test run
-
buy to see the process through
financial records / plans
Next step(s)
What do you plan to do to take your
business a step forward to making it more sellable? Here are some of the steps that AIC attendees
stated that they need to take for their business to move forwards and make it
more sellable.
-
Document client services
procedures
-
Document business procedures
-
E-Myth by Michael Gerber (book)
-
Bring contact list up to date
-
Keep task list up to date
-
Passwords
-
Clone themselves
-
Automate
-
Create systems
-
Document “what I do”
-
Set guidelines / restrictions for
coverage
-
Key list of contacts –
suppliers / partners
-
Get organized
-
Practice running the business
from Florida
(run itself)
-
Power of attorney
-
Signing authority (phone bill
example)
-
Client list
-
Train / hire a consultant
-
Passwords – only if necessary
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