How many "Boomer" business owners out there wish they would have sold their company a few years before the Great Recession?
This past year I attended, for the first time, a seminar on Mergers and Acquisitions, as I wanted to gain knowledge in the steps/processes of buying and selling businesses.
As with all seminars, Webinars, podcasts and books, you always take away a nugget that will help you in your business and in your life. The nugget I got from the speaker of this seminar was, that he said, "The same day you acquire or start a business, should be the same day you start preparing an EXIT PLAN."
That statement hit me right between the eyes!
Why? Because I never thought I needed an EXIT PLAN. I assumed, when I wanted to sell or pass my business on to family, I would gather the information needed, talk to my lawyer and accountant, and make it happen. It would be just another project.
Well, if I had been planning my eventual "EXIT—Stage RIGHT" I would have given even more thought about intangibles. Thank God, due to our systematic approach to business, we had many intangibles in place; however, I am now more focused on them and I have been diligently working on my EXIT PLAN for when that day comes.
What are "intangibles" for a business?
Simply stated, they’re those things that separate a business from other similar businesses, and those things that some would consider unimportant items, a buyer would be looking for, when acquiring a business. Intangibles are those things that give a company more value than the average, same-size company in the same industry.
During the seminar we were given many examples of intangibles, and the speaker asked the attendees to make a list of our company's intangibles.
The following is a list of a few I came up with for OUR company:
- Great location in the city of Nashville, within blocks of FedEx and UPS.
- Located in a building very suitable for our industry, and one that can easily be expanded due to extra unused acreage.
- Less than five minutes from Nashville International Airport.
- Well-designed company Websites that support instant quotes, and the placing of and paying for product orders online, any time of any day, with little input from CSRs.
- MIS software that has modules for job tracking, estimating, finished goods and inventory control, floor data collecting used for time tracking and productivity benchmarking, also custom reports for job costing, etc.
- A detailed written and online Operations Manual of how our business functions, to which employees have easy access.
- Quality Control Systems with instant benchmarking of waste, which is interfaced and posted instantly on large HD TV monitors located in various departments.
- HR online Systems...i.e. Request for Leave, Absent Tardy, etc.
- Repair and Maintenance Systems.
- Inventory Control Systems.
- Clean and clutter-free environment.
- Top drawer employees with low turnover.
- Customers are not doing business with our company due to MY (owner’s) relationship with them—meaning: a new owner would retain 99 percent of our clients, as long as the new owner maintained the quality and service control systems that are now in place.
I could go on, but I think you get the point. As you can see, due to our systematic approach, we have a great deal to offer someone, IF we were to sell our company. However, just like many companies, we were hurt badly by the Great Recession—but, due to our systems, we maintained quality and service all the way...and we’re moving forward.
So, what is EXIT—Stage LEFT?
Let's put it this way...an "EXIT—Stage LEFT" business is one that functions poorly when the owner is NOT on-site walking the floor ensuring operations are running smoothly—a company that’s quality and service relies strictly on what I call a "System of Apology"—a company with POOR SYSTEMS for operations. This type of company is worth little without the owner being constantly hands-on, and most of its value is determined by how good the economy is doing.
An EXIT—Stage LEFT business was not a pretty site for many Boomers who lost heavily during the Great Recession. The worth of their company bottomed out, with little or no intangibles.
It didn't have to be that way! It still doesn’t! We can help.
Did I mention? Great systems work!
Philip Beyer, founder/president of Ebiz Products LLC and founder of Beyer Printing Inc. in Nashville Tenn., is a chronic entrepreneur, business systems analyst and consultant. Author of "System Busters: How to Stop Them in Your Business" and recipient of an InterTech Technology Award for the design and development of System100 business process management software. Beyer speaks to business owners across the country on how to bring lean, sustainable order to their businesses. Contact him at (615) 425-2652.