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A business is defined as “an organization or enterprising entity engaged in commercial, industrial, or professional activities” (Investopedia.com) or “any activity or enterprise entered into for profit” (Wikipedia) but is also an amalgam of dynamic, intangible, fluid human interactions and activities that celebrate the human spirit through enterprise and meaning.
A business broker’s role is to synthesise these elements into a whole and convert them into cash.
That cash amount can be the top value of the business or not! How can a business owner assist in the process of ensuring that their business has maximised its value?
Start with an exit plan! This will provide the framework and be the analysis tool for ensuring all the elements that comprise the business are performing in unison to ensure optimal value. An exit plan is a comprehensive plan that will enable an owner to exit their business on their terms and at their price. The Covid pandemic has changed the focus within the plan for many businesses, particularly when it comes to people. With unemployment sitting at 3.5% the availability of both skilled and unskilled workers has become critical and a threat to the exit strategy of many businesses.
Enact a strategy to attract and retain staff. Seeing people as the most important element within your business may be critical to attracting key people. People play a key role in deciding workplace culture, in the words of the great Peter Drucker, “recruitment is a life and death decision”.
Drucker also said that "organizational culture eats strategy for breakfast, lunch, and dinner and shouldn't be left unattended." As a business owner looking to exit your business ensure that the people culture within your business is the glue that holds it together and is part of the magic that creates excellence. It is important to see knowledge and skills development as an investment and a way of doing business and not a cost. A business owner with a strong people culture and plan that has been used to attract and retain staff gives a business added value.
The corollary being excellence in customer service that has both an internal and external focus that follows from such a focus.
A successful people investment strategy will enable an owner to focus on working on the business and not in it. A buyer is more likely to pay a premium if you can demonstrate that your business can be run independently.
There are many elements to an exit plan and I have highlighted just one very important one, people.
Be adventurous, see how you can ensure that you can get the top dollar for your business in 2023 by being an employer of choice, in the words of the Bard, “our doubts are traitors and make us lose the good we oft might win by fearing to attempt”.
All the best for 2023!