If your plan is to sell your business some time in the future, what is going to make your business stand out from the crowd?
Many business owners, when starting out, write a plan to get funding from the bank and let that document collect dust as a relic of little relevance. It’s easy to understand why, the focus of the bank is purely financial, they’re not interested in whether you inspire your team, build a strong culture or have a strong Unique Selling Proposition (USP), so you write a plan to suit what they’re interested in; PROFIT!
Over time everyone’s plan changes as the business responds to the challenges and opportunities that it deals with, but what will you get when you finally try to sell?
Will you be repaid for your journey through the school of hard knocks, the blood, sweat and tears that you’ve endured? The statistics say that you’ve survived against the odds if your business has made it to 5 years old, but surviving doesn’t mean it’s attractive to a buyer and when 80% of businesses don’t sell, you need to be telling a story that is different to everyone else. A story that will inspire a potential buyer to take notice and understand where they can take the business to in the future.
As crazy as it sounds, I think that one of the best times to write a new business plan is in preparation to sell the business, but we call it an Information Memorandum (IM) and it tells a potential buyer a bit about the history, vision, culture, the team, organisational chart, and a SWOT analysis that shows Strengths, Weaknesses, Opportunities and Threats.
Remember, no one knows your business better than you! Being brutally honest with yourself in the SWOT may mean that you need to deal with some of the weaknesses and threats before you put the business on the market, but better to do this early rather than have potential buyers work them out for themselves and you not being prepared to deal with their objections!
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This blog is brought to you by Nigel Letty.