Shelves: business-books Amazing book. I was recommended to read this because it help shapes your head around what you are building in your business. Really great lessons learned and makes the impossible seem possible. Well worth the time. If you specialize, you can hire specialists and improve the quality of your work. You need to build a business where the majority of your proceeds get paid up front.
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Shelves: business-books Amazing book. I was recommended to read this because it help shapes your head around what you are building in your business. Really great lessons learned and makes the impossible seem possible.
Well worth the time. If you specialize, you can hire specialists and improve the quality of your work. You need to build a business where the majority of your proceeds get paid up front. Stop taking projects that fall outside of your Standard Service Offering. Make your cash flow statement your most important day-to-day management report in the year you make the switch. Consider alternative forms of long-term incentive plans. Make sure they know your industry.
You want to ensure there is competition for your business and avoid being used as a pawn for your advisor to curry favor with his or her best client. Think big; remember that the company that acquires you will have more resources for you to accelerate your growth. Change words like clients to customers and firm to business. Rid your website and customer-facing communications of any references that reveal you used to be a generic service business.
Instead, use a simple stay bonus that offers the members of your management team a cash reward if you sell your company.
Pay the reward in two or more installments only to those who stay so that you ensure your key staff stays on through the transition. To transform a service firm into a sellable company, follow this 8-step process. Before you start the process, engage a good accountant with experience in helping entrepreneurs with succession planning.
Depending on your tax jurisdiction, there will be tax planning strategies your accountant can put into place now that will minimize your tax bill when you sell your business. Do not wait until you have an offer to see an accountant. Timing is critical; get an accountant to devise a tax minimization strategy before you start the 8 steps. Step 1: Create a Standard Service Offering The first step in building a sellable company is to find a service your clients find valuable that you can teach someone else to perform.
Brainstorm all of the services that you provide today and plot them on a simple diagram with "Teachable" on one axis and "Client Value" on the other. Work through all of the services you offer and eliminate services that a client needs to buy only once. Of the remaining services, pick the one that is plotted closest to the top right corner of the diagram above, which means that clients both value it as a service and you can teach it to someone to execute.
This becomes the Standard Service Offering. Experiment with bundling a few services together to stake out the top right corner of the diagram. Define each of the steps so that you can repeat the model in the same way each time. Once you have a Standard Service Offering, write an instruction manual to deliver it. Make sure your instructions are specific enough for someone to follow independently by using examples and fill-in-the-blank templates where possible.
Test your instructions by asking someone or a team to deliver that service without your involvement. Getting the instruction manual done right will take time. Expect it to go through many drafts. Be patient. Next, name your Standard Service Offering. Naming your offering gives you ownership of it and helps you differentiate from potential competitors.
Once you are the owner of something unique, you move from offering a commoditized service to one where you decide the terms of its use. Instead, name your offering and each of the steps you take to deliver it to differentiate the service so that you can set the price and payment terms.
Once you have the steps to your process and the corresponding copy, revamp all of your customer communications e. This will be possible if you branded your offering properly. Depending on your service, you may not be able to charge for the entire amount in advance, but you can try. If you charge up front, you will create a positive cash flow cycle, which will give you the cash you need to operate without diluting yourself with other shareholders.
Acquiring companies will also give you a higher valuation when you sell your company because they will not have to commit as much of their own capital to your company. Step 3: Hire a Sales Team Once you have created, packaged, and started to charge for a Standard Service Offering, you need to remove yourself from selling it. Instead, you need to hire salespeople. If you have done a good job packaging a consistent service, the best salespeople will be those used to selling a product.
Look for salespeople like Angie Thacker who enjoy selling first and the product second. Avoid salespeople who come from professional services companies, as they will want to re-invent your service for every client.
If at all possible, hire at least two salespeople not just one. Salespeople are competitive and an acquirer will want to see that you have a product that can be sold by salespeople in general and not just one superstar salesperson.
Step 4: Stop Accepting Other Projects.
FOR BUSINESS OWNERS
Start free Blinkist trial Upgrade to Premium Read or listen now Synopsis Built to Sell details key strategies for growing a small service company and preparing the business for a future sale. These blinks illustrate these insights by telling the story of Alex Stapleton, owner of a marketing agency, and his advice-giving friend Ted Gordon, who is a successful entrepreneur. Key idea 1 of 9 Business success lies in specialization in a single service. How can you make it successful? Some people would accept every offer. As a result, people will come to you with specific problems that you can solve better than anyone else. Furthermore, when the results are good, clients will recommend you.
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