Why The Best Time to Plan Your Growth is Before You Sell
One of the things we’ve been doing a lot lately here is working with potential buyers of businesses. I used to be primarily focused on being a business broker before I moved into the accounting side of things so it’s a space I know well.
There also seems to be a big push lately into this space, not the least of which may have been caused by our friend Walker Diebel and his book Buy Then Build. There is a theory that now is a great time to buy because a lot of the boomer generation is getting ready to retire and turn over their businesses that they’ve been running for the last thirty years to a new generation.
These are solid, profitable, often “boring” businesses that just need some updates in terms of their tech and their marketing. The buyers are often excited by the idea they can buy these businesses cheaply and then grow them a ton by doing all the things the current owner never did.
And it’s true. What we often see is that these businesses haven’t really done any marketing at all and rely exclusively on their long history and word of mouth to generate new business. Sometimes that’s enough and they continue to show good year-over-year growth.
Check out what else we’ve been up to!
- Matt Reviews: How Did the Stanley Cup Get So Popular? (Short Video)
- Matt Reviews: Is This Advice on How to Buy a Business Accurate? (Short Video)
- Matt Reviews: Are These Businesses The Best Ones to Start to Ensure Success (Short Video)
- Business for Sale, Would I Buy It? | Two Hero SKU Amazon FBA Store (Short Video)
- Bookkeeping for Your Business – with Matt Remuzzi (Podcast)
Other times, however, between the owners being burned out and the no-effort marketing plan the sales are flat or even in decline. This very much hurts the value they can get from the business because a buyer is now thinking of this as a turnaround project rather than buying into a thriving successful business.
The business owners that can sell for a premium and often can even see a bidding war develop are the ones that have had solid growth for the last several years and a well-oiled marketing plan in place that is continuously bringing in new business.
If a buyer can see that the business has a nice upward path in front of it they are going to be much less nervous about the acquisition and much more confident they can continue to simply implement the plan that is already working to stay on the proven growth track.
On the other hand, if there is no marketing plan they are going to have to invent that themselves and it may take several tries before they figure out one that works.
So, if you want to be able to add six or even seven figures to the value of your business, the best thing you can do is focus on developing and implementing a repeatable growth plan and putting it into action. Even if you only do so for six to twelve months before your exit you can substantially increase the amount you walk away with.
And if you aren’t planning to sell soon it’s still not something to skip – why not grow the business now and benefit as the owner instead of handing it off to someone else to benefit from later!
How to Build a Repeatable Growth Plan
- First, assess what you are doing now, if anything, and what is working and what isn’t.
- Determine where your current customers come from and which sources produce the most and best customers
- Figure out what your best customers have in common and build a profile of what that perfect target customer looks like
- Consider the best ways to then reach more of those same types of customers and what the best way is to entice them to do business with you
- Test this outreach enough to see what approaches work best and which ones don’t work or don’t work enough to make them worth continuing
- Once you’ve narrowed it down, then commit to a consistent effort to use this outreach plan to bring in more leads and convert them into customers
- Track the results and continue to expand what works and stop anything that stops producing results
- Continue to experiment with new ways to reach these customers, new offers to present, and new ways to engage them further to spend more with you
This isn’t quick but it also doesn’t take forever. You already know who your best customers are – the extra work is figuring out how to find more people like them and get them to at least consider working with you. Once you have a plan in place then you just continue to let it run.
Most business owners don’t do this because the day-to-day headaches and hassles of running their business take all their time and mental energy. So the pre-step to getting into marketing may be to review where your time goes and delegate away enough of the non-critical admin type of things to someone else so you can spend time focusing on growth.
The payoff is huge. I know it can be difficult to plan for the future when the present appears to be on fire! I struggle with it myself. But if you want to have financial security, time freedom, and a business that does really well for you and your family this is a surefire route to build what you have and then be able to sell it at some future point for a premium value.
I see it happen all the time. I also see missed opportunities just as often. Which one you end up being is entirely up to you!
