How To Build A Business That’s Ready To Sell From Day 1
Often, when discussing exit strategies, a lot of ink is spilled going over all the things that can be adapted or updated to make the business more appealing to potential buyers: practices and processes that might have fallen by the wayside over the years or may have never been implemented at all. This can incur a lot of costs or result in substantial lost value when you’re down the home stretch of the selling process. Wouldn’t it be great if your business already had a rock-solid foundation from day 1?
So, when creating a business, when first sitting down and turning that unique business opportunity over and over in your mind, imagining all the potential, what if you began by approaching it from the perspective of a potential buyer at that very moment? Though there are famous caveats to this when it comes to most successful businesses the value isn’t in the brilliance of the idea, it’s in the execution of it.
Driven by Data:
An analogy we often use is that data is the fuel that your business runs on. You could build a Ferrari of a business: a great product, great web design and stellar ads. But if you’re not collecting, analyzing and acting on data you’re probably not going to get anywhere, or even worse, you’re not going to know where you’re going. Building robust analytics tools into your business from day 1 is like having an entire history – a crystal clear picture – that you can hand a prospective owner: there’s enormous value in that.
Though Google Analytics is undoubtedly the most common, Ahrefs and SEMrush both have robust data management platforms that should be deployed right from the start. Once you have all this beautiful data coming in, you can start outlining Key Performance Indicators with tools like Geckoboard, Salesforce, Grow or Tableau. And the benefits aren’t just for a buyer down the road, with good, clean data coming in you can better assess where your business stands each and every day, and better position it for the future (and its future sale).
Create Standard Operating Procedures for Everything:
Much like good bookkeeping, standard operating procedures, (SOP’s) are the unglamorous foundation of any successful business. They can seem tedious, require a certain amount of vigilance and updating, and don’t immediately provide a windfall or benefit. But any entrepreneur should know that they avoid them at their own peril.
Think of it this way, if you were buying a car, how would you feel about it if it didn’t come with an owner’s manual, if an owner’s manual didn’t even exist. The current owner is standing there telling you that you might have to ‘jiggle this’ or ‘tap on that’ to get the car going. That doesn’t sound too appealing, does it?
Many entrepreneurs avoid creating SOP’s because they themselves want to be in control of each and everything pertaining to their business. But SOP’s are the best way to maintain that control, it allows owners of businesses big and small to be able to dictate down to the letter how each and every part of their business should be run. The results are innumerable, including:
Consistency: SOP’s create consistency from person to person, creating a sense of balance across the business.
Reduction of Errors: When you have documents that point individuals or teams to exactly how something should be done, you have a foundation that not only limits errors from the get-go but also gives a framework for finding and fixing them quickly and efficiently.
Increased Efficiency & Communication: SOP’s give a framework that streamlines processes big and small, reducing second-guessing and inconsistent of erroneous work. It also gives an essential framework for discussing how things get done and if there are advances or efficiencies that can be employed as the business and the market it serves inevitably evolve.
Keywords Are Key:
Just like with woodworking, when it comes to Keywords and good SEO, the old adage holds true: “measure twice, cut once”. Creating a business with a strong SEO strategy and with a well-considered ecosystem of keywords and terms out of the gate is essential to success. Having to go back and retool a business for SEO optimization or to shift keywords strategies will undoubtedly cost you time, business and money.
Another benefit of starting with a high-quality SEO and Keyword strategy is that it requires you to really dig into the nature of the market you’re about to enter. Your concept might seem great in a vacuum, but faced with the realities of the industry, maybe it doesn’t seem to be ripe for profit, and maybe you discover a different or overlooked avenue to success.
Keep Stellar Books:
Telling entrepreneurs the importance of bookkeeping may seem like beating a dead horse, but the fact of the matter is that it’s probably the most important business practice that owners avoid or mismanage.
Particularly when starting a business, there’s a tendency to think that in its infancy, a business simply isn’t big enough to warrant a dedicated bookkeeping effort, resulting in lost receipts, mixed accounts (personal and business), and a lack of a clear financial picture. While you may not need an in-house accountant from day 1, software like Quickbooks, Xero, or Freshbooks are inexpensive and allow you to start creating a clear financial history of your business that prospective owners will undoubtedly appreciate.
So while you’re probably not going to start a business, and 24 hours later list it for sale (unless you happen upon an absolutely stellar DOMAIN), the fact of the matter is that if you approach your business with an exit in mind and consider a future buyer’s mindset, you will start building value right out of the gate. So instead of rushing to build up a business and then being forced to do a bunch of housekeeping when it comes time to sell, build a business that’s ready to be handed over to a new owner at a moment’s notice, and of course for a handsome price.