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Top 5 Tips to Sell Your Business

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The biggest mistake sellers make is not planning their exit strategy. businessnov2013Think ahead: in order to afford the lifestyle you have always dreamed of, you need to build a business that will be attractive to buyers willing to pay top dollar.

Unfortunately, most business owners don’t think about selling their businesses until doing so becomes a necessity, such as after a catastrophic event. But at that point, the business is usually trending downward. As strange as it may sound, the best time to sell your business is when things are going well.

Below are five ways to create a profitable and salable business that will exceed buyers’ demands when it’s time to sell:

1. Brand yourself and most importantly, your business. Ask yourself:

Is your business based upon brand loyalty or location loyalty?
Do your customers purchase your products/services because you have a convenient location?
If your business is based upon location loyalty, then you must work on building your name recognition and brand awareness. Ninety-five percent of businesses are not branded, and this is one of the top mistakes that business owners make.
Additionally, you need to own the real estate where the business is located and/or have a long-term lease with options to renew, along with favorable terms and conditions. If your clients are going out of their way to purchase your products/services — congratulations! You have built brand loyalty.

2. Create a sustainable business that works for you rather than you working for it.

Do you have a business or a job? Do you have employees? Are you the business? If so, then your business will be very difficult to sell. In many cases, the owner is the business, and when the owner leaves, the clients leave. Most buyers are adamant about purchasing a business, not a job.
Write an employee training/operations manual. You must duplicate yourself, hire employees or independent contractors and create a management team. It’s time to stop working in your business and start working on your business.

3. Create congruent revenue streams and grow your business via acquisitions.

Is your industry a dying breed, or on the cutting edge? Is it desirable to buyers? It is necessary to continue to reinvent your business to keep up with consumer demands. Is your business based upon one profit center? What happens when that profit center is no longer viable?
In today’s economy, multiple sources of income are crucial. One way to add another revenue stream is to become a one-stop shop for your clients’ needs. Many buyers are strategic: they look for businesses that grow by providing products/services to their existing client base. Listen to your clients. What are they asking for? Find out what your clients’ ultimate needs are, and satisfy them. If you don’t, your competitors will.

4. Keep your current customers and increase your client base.

Many buyers will not buy a business without a healthy client base. It is prudent to continue to expand your customer list. Don’t just think outside the box — throw the box away. One of the best ways to obtain more clients is to network. Call five new people every day with whom you can build a mutually beneficial and prosperous relationship. Expand your geographical area to reach more prospects.

It is more cost-effective to keep a customer than to replace one. Continue to provide excellent customer service, and roll out the red carpet for your clients by creating “WOW” experiences for new and existing customers. This will set you apart from your competition. Your clients will brag about the tremendous treatment they received from your company, which will convert your customers to brand advocates. It is always better when someone else sells you, rather than you selling yourself.

Keep in mind that a negative or non-“WOW” experience will have the opposite effect, and could significantly damage your brand. Unfortunately, negative news tends to spread more quickly than positive.

5. Perform financial housekeeping.

Most small business owners live out of their business, paying their personal expenses through business accounts. Keep good financial records and maintain the ability to prove your expenses.

Obviously, this advice is just the tip of the iceberg. It might seem like common sense; however, common sense is not as common as it once was. A PRO is never out of school! The more you learn, the more you earn. In addition to learning, the key factor to success is speed of implementation.

The 5 Levels of Branding

Level 1 Brand Absence: 95% of businesses fall into this category.
Level 2 Brand Awareness: Certainly better than brand absence; at least consumers are aware of your products/services.
Level 3 Brand Preference: Customers prefer doing business with your company.
Level 4 Brand Loyalty: Clients purchase your goods/services exclusively.
Level 5 Brand Advocacy: Aim for a bull’s-eye at this target. When your customers recommend your product/service, money will come to you in droves. Apple and Coke do this better than anyone. How many people have told you to buy an iPhone or iPad? How many times has someone said, “Have a Coke?” Build your brand and have consumers insist on using your company.

Many business owners have done a better job at building their personal brand than their company brand. A personal brand is more difficult to sell than a company brand. You remove the person, and the brand disappears. Great businesses and entrepreneurs brand both. Steve Jobs built his personal brand as the face, innovator and brain of Apple. However, had the company not been so well branded on its own, it wouldn’t still be thriving today.