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Sell Your Business - Create an Exit Strategy or Exit Plan

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Sell Your Business - Create an Exit Strategy or Exit Plan

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Most business owners don't have a succession plan, exit strategy or exit plan. They don't know the value of their business or what their business is worth or how to get the most money from their business when they are ready to sell it. Business and executive coaches and consultants can easily find more clients when they learn to be sellability advisors and can show business owners where the gaps are in their business and help them learn how to drive up the worth of their business.

Most business owners don't have a succession plan, exit strategy or exit plan. They don't know the value of their business or what their business is worth or how to get the most money from their business when they are ready to sell it. Business and executive coaches and consultants can easily find more clients when they learn to be sellability advisors and can show business owners where the gaps are in their business and help them learn how to drive up the worth of their business.

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Sell Your Business - Create an Exit Strategy or Exit Plan

  1. 1. Bbest Pr8 Areas for Driving Business Value: Attract & Retain Clients on These Principles
  2. 2. Why Sellability Matters “Those with a Sellability Score of 80 or more get offers that are 71% higher than the average business” Its all about Value and Running a Business that is Valuable to a Third Party – Not about the act of Selling: • Passing a valuable asset onto Family • Planning for the unforseen exit (Health or Financial)
  3. 3. The Opportunity • 76% of business owners do not have a succession plan, of which many are planning to retire over the next 10 years • Business owners should create a formal BSP 5-10 years prior to retirement • Succession planning is complex and small business owners need help As many as 70% of business owners plan to exit their business in the next 10 years, and the most common exit plan is selling the business to another company
  4. 4. Benefits • Better First Meetings & Conversations • Opportunity to asses their business – give it a Health Check • Higher Quality Workshops and Presentations • Better event Attendance & Engagement – Summary Review • Expanding Referral Network • Increase in Client Engagement • Additional client touch point • Providing access to additional tools and consulting • It measures Accountability – Estimate of Value feature • Prove your worth over the duration of your consulting
  5. 5. 5 Output Report Report details the business’ measure on eight key drivers, with an explanation of why each attribute is important and suggestions for improving performance on each metric
  6. 6. 6 • Overall Score driven by a weighted algorithm made up of 40 questions in a total of 8 categories: 1. Financial Performance 2. Growth Potential 3. The Switzerland Structure 4. The Valuation Teeter Totter (i.e. See Saw) 5. The Hierarchy of Recurring Revenue 6. The Monopoly Control 7. Customer Satisfaction 8. Hub & Spoke Copyright, 2013. Built to Sell Inc
  7. 7. 7 How to interpret the report • Score of less than 50: business owner must improve score or opt for an internal transition to a family member or employee(s) over time • Score of 50-80: the business will likely sell for an industry average multiple* • Score of 80-100: the business will likely fetch a premium over industry average multiples *consult a database like “Pratts Stats” for average multiples by industry Only 6% Score 80 or above
  8. 8. 8 Copyright, 2013. Built to Sell Inc Revenue & Quality of Accounting Risk & Reliability of Future Earnings • Score of less than 50: a business with modest revenue that is either losing money or generating a small profit • Score of 50-80: a profitable business • Score of 80-100: a large profitable business
  9. 9. 9 Copyright, 2013. Built to Sell Inc New Opportunities Geography New Products • Score of less than 50: low future growth potential • Score of 50-80: modest future growth potential • Score of 80-100: lots of future growth opportunity
  10. 10. 10 Copyright, 2013. Built to Sell Inc Independence •From Employees •From Customers •From Suppliers • Score of less than 50: heavily reliant on one customer, employee and/or supplier • Score of 50-80: somewhat reliant on one customer, employee and/or supplier • Score of 80-100: not reliant on one customer, employee and/or supplier
  11. 11. 11 Copyright, 2013. Built to Sell Inc Cash Flow vs. Value of the Business (P&L) • Score of less than 50: a business with a negative cash flow cycle constantly in need of cash • Score of 50-80: a business with a neutral cash flow cycle – they pay out expenses at about the same time as they take cash in • Score of 80-100: a business with a positive cash flow cycle that takes in cash at a faster rate than it pays it out
  12. 12. 12 Copyright, 2013. Built to Sell Inc How reliable the future stream of profits • Score of less than 50: a business with little or no recurring revenue • Score of 50-80: a business with a moderate amount of recurring revenue • Score of 80-100: a business with a high proportion of recurring revenue
  13. 13. 13 Copyright, 2013. Built to Sell Inc Differentiation • Score of less than 50: a business with commodity products and/or services with little or no control over pricing • Score of 50-80: a business that has somewhat differentiated products and/or services yet occasionally must compete exclusively on price • Score of 80-100: a business with highly differentiated products and/or services that rarely competes exclusively on price
  14. 14. 14 Copyright, 2013. Built to Sell Inc Survey Net Promoter Score • Score of less than 50: a business with no consistent methodology for measuring customer satisfaction and/or dissatisfied customers • Score of 50-80: a business with satisfied customers • Score of 80-100: a business with both very satisfied customers and a consistent methodology for measuring customer satisfaction
  15. 15. 15 Copyright, 2013. Built to Sell Inc Owner Dependence • Score of less than 50: a business that is heavily reliant on its owner(s) • Score of 50-80: a business that is somewhat reliant on its owner(s) • Score of 80-100: a business that is not reliant on its owner(s)
  16. 16. The Hard Wired Process • Standardized Process • Before every Initial Consult or Meeting • Its About Me – Not You • Better Prepared for First Meeting • Comparison to Physician: Health History
  17. 17. Success Indicators  Proactively inviting business owners  Presentations/Webinars  Consistently writing/promoting  Partnering  Using as Lead Qualifier
  18. 18. Conversion Rates  Proactively inviting business owners  8 out of 10 will fill out survey  Presentations/Webinars  1/3 fill out survey  122 reports, 1 in 3 turned into consults  Partnering  Referrals – 9 reports, 4 new clients
  19. 19. The Sellability Score LinkedIN: Sellability Score Advisors Group For marketing consult contact: Jeni Cantley, Practice Development Manager Jeni.cantley@sellabilityscore.com 360.450.5557 or Skype jenicantley.sellability Join Us on LinkedIN

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