Be Prepared – Ensure Your Business is in a Ready State to Advertise For Sale

If you have taken the decision to sell your business, you will no doubt have researched the internet for options on how to advertise your business. There are a large number of paid and free “businesses for sale” portals out there.

However, before you make that ultimate decision to advertise your business for sale, take a moment and ask yourself, is my business really in a ready state to advertise? Is it attractive to a potential buyer? Are my accounts in order? Would I invest in this business? If you have any doubts, no matter how small then take a few moments to consider the following points. They may save you months of heartache, disappointment and money:

1) Talk to the right people – firstly it is good idea to discuss your intentions with your accountant. Not only will this prepare them for any future discussions with potential buyers, they can also help advise on the best way to sell your business. Accountants are in the main very knowledgeable people who have numerous clients from all walks of life – they’ll know the true value of your business and it’s financial strengths and weaknesses. If you do not have an accountant then do yourself a favour – get one! I’ve lost count the number of times I’ve heard the expression “I can’t afford an accountant”. Absolute non-sense – my answer is “you can’t afford not to have one!”

Sadly many small business owners have the distorted impression that accountants cost a lot of money. A good, reputable accountant has one sole aim in mind – to save your business money and ensure you only pay what you have to. If they didn’t, they wouldn’t be in business very long. So many business owners try to take shortcuts by declaring and calculating their own accounts. Invariably, they end up paying far more than necessary. If you are selling a business, you need to ensure you get good financial advice to avoid paying over the odds when it comes to tax, capital gains and the valuation your business and its assets.

So get on the phone and call your accountant and get on the internet and find a good local professional. Most towns and cities have numerous accountants who charge very good rates.

2) Clean your act up – have you kept your business accounting books and tax records in order? If not, why not? A potential buyer wants to buy a business that has been well maintained. How does it look to a buyer if you haven’t looked after the most basic of necessities? It reflects badly on you and it will make any potential buyer nervous and skeptical. So before you even attempt to advertise your business, ensure all of your records are up-to-date, clear and transparent. Even better is to prepare summary figures to show profits and losses for at least three years and show sales patterns. In short, show that you know your business inside and out – it will illustrate a huge level of confidence that you have a complete understanding of your businesses operations, value and profitability.

3) Talk to an agent – by meeting with one or two agents, you get free impartial advice. Whether you decide to use an agent to sell your business is entirely your decision however, by talking to them for an initial consultation, you can get a greater understanding of how a buyer may see your business and it won’t cost you a thing. Agents are very knowledgeable people and have dealt with all kinds of businesses and all sizes of businesses. They will ask the questions that buyers will no doubt ask – if you trip up here, at least you have a second chance to get it right before you lose a potential buyer!

So get on the phone and talk to an agent. Ask them to visit your premises so that they can fully understand your business, what your operation does and why you want to sell. In most cases they will not charge you for an initial meeting and in many cases, will offer an initial valuation and feedback on whether they feel they can sell your business for you. Free advice is good advice so take it if you can.

4) Get the facts together – you’ll be amazed at just how many sellers are ill-prepared to sell their businesses and what little information they have ready for potential buyers. If you have access to a computer with word processing software, you can do yourself no harm by spending a few hours in putting together a business information pack. Inside this document you should include items such as a synopsis of the business, its history and its operations. Also include items such as the reasons for your sale, even if it is a little edited if you do not want to declare the full story. More importantly, you should list the details of the sale and what is included such as the assets, liabilities, property, goodwill and basic customer info (although do not include detailed names or companies).

Also take photographs and include these if they will help illustrate your products or services. Give as much information as you can within reason. Naturally, you need to be diligent and careful in what information you disclose to potential buyers as you do not want to jeopardize the value of your business as it presently stands but by going the extra mile and by preparing this document, you do yourself many favours. For example:

a) you show to any potential buyer that you have done your homework and run your business with efficiency and dedication
b) you’ll weed out the time wasters and prevent meetings or discussions with buyers who are simply window shopping
c) you’ll save yourself hours of discussions covering the same questions and answers, over and over again
d) the document can be used as a download on business for sale websites
e) the document can be used as a handout for meetings and is a great way to break the ice!

This little bit of preparation can go a long way. A few hours of your time could save months of waiting for a buyer.

5) Get a confidentiality agreement prepared – before you meet with anyone, get a non-disclosure agreement (also known as a confidentiality agreement) ready. They can be bought quite cheaply from bookstores in standard legal document packs or online for a few pennies. Potential buyers will ask all kinds of insightful questions regarding sales figure, profits, losses, suppliers and your customer base. Think first about protecting your operation – get a document ready and do not disclose anything to anyone until they sign and complete one.

6) Get a lawyer – just like an accountant, start speaking to lawyers and let them know of your intentions. Selling a business isn’t cheap and lawyers don’t come cheap either! Rates can vary greatly dependent on their level of experience, size of company and location. If you can agree to a fixed or capped fee then you could be onto a good thing. In the legal arena time really does mean money so ensure that you know what you will be expected to pay when you use their services. Very rarely does a business get sold without the use of lawyers or solicitors so if you can strike up a good relationship with one beforehand, it will help you a great deal. Legal costs can be very high so make sure you are prepared for the expense when you calculate the value and price at which you want to advertise your business at.

7) Look Smart – whether you own a shop or store, manufacturing business, a service agency or anything for that matter, make sure you keep your image clean and tidy. When your business goes on the market, you will start to get enquiries. It’s not uncommon for prospective buyers to pay an unscheduled sneaky look at the business so clean the place up and make it look pristine as you never know who may walk through the doors next. A clean business is an attractive business.

If you have now ticked all of the boxes above then great, you’re most likely ready to get advertising your business for sale. Good luck and don’t forget to read my other blogs on ways to buy and sell businesses successfully!

Browsing For Business – How to Run a Business With Web-Based Software

I stayed plenty busy on Saturday, December 19, 2009. Not only was I shuttling my five-year-old around town to his Christmas pageant rehearsal and his birthday party, I also wrote several blog posts and articles (including this one), reviewed my current bank account information, entered receipts into my checkbook register and my budget software, updated my business plan, created a survey form, and responded to about 10 e-mails. I never opened a single application besides my Firefox browser. I accessed all of my software through the Internet. My first all-day experience with web-based computing, also called “cloud” computing was a great success!

Web-based computing simply means that instead of using software programs downloaded to your hard drive, you open your software applications through the Internet. You open your web browser, access the software’s location on the Internet, open the program, and start using your program. Like many computer users over the last 25 years, Microsoft defined my software user experience. If I needed to update a spreadsheet, I opened Microsoft Excel. I created my word processing documents in Word, and I would open Outlook to check my e-mail or calendar. I only used the Internet to look at news sites, shop online, or check my social profiles at LinkedIn or Facebook. Over the last several months, I have completely shifted my focus to use Microsoft products as little as I possibly can. I should have seen this advancement coming. We have watched much of our commerce move inside a web browser. Whether we have purchased books from Amazon.com or downloaded software directly from a website, we entrust an increasing amount of our commerce to web-based activity. Using web-based software for all computing is a very logical next step.

I am by no means anti-Microsoft. For many high-powered spreadsheet activities like I use at work, nothing works better than an Excel spreadsheet. I also need to use Excel in many cases, because Excel’s add-on programs allow greater data analysis and productivity. However, many people are not like me and do not work with 30 megabyte spreadsheets every day. Many people need little more than the basic features of the traditional Microsoft Office package. For these purposes, web-based software like Google Docs is more than enough to fulfill users’ needs.

Major software companies are quickly catching on. Google’s web-based application program is arguably the most popular web-based software, but other companies like Adobe (check out Adobe Buzzword) offer competing products. Even Microsoft is creating a web-based version of its Office software, which is a clear admission that computing is more about the Internet and less about shipping software CDs. Other companies, such as 37 Signals, offer a number of software solutions to handle a wide range of business problems.

In the last two months, I have learned that you can do the following business activities using web-based software.

  • Maintain your accounting books
  • Prepare business plan information
  • Share documents in a common team location
  • Prepare presentation graphics
  • Maintain your Customer Relationship Management (CRM) software
  • Pay your bills by scanning invoices

Here are five reasons why web-based software is quickly becoming a key part of business computing.

  • Mobile computing – When we look back at this period, Apple will be best known for creating a truly mobile computing environment. While BlackBerries were important as communication tools, the iPhone made a leap of several levels to a true handheld computer. Since smartphones have limited memory, any usable software needs to be based on a web-based platform.
  • Increased collaboration – the rise of the free agent workforce, the never-ending expansion of global commerce, and increasing numbers of virtual teams are creating demand for easier collaboration. In the past, we would have to e-mail documents or upload documents to the Internet using complicated procedures. We would never know if the version we were editing was the “live” or the “official” copy. Web-based software allows people around the world to access the same document at the same time. Editing and collaboration is becoming much simpler and more productive for a connected workforce.
  • Data security – Your first response may be, “How can using a web-based program be safer than accessing my hard drive?” What would happen if a technology company like Intuit (QuickBooks’ parent) or 37 Signals lost a significant customer data? The answer is the equivalent of Enron. These companies would collapse because the market would lose trust in their ability to secure confidential data. These companies maintain security levels far above what we can maintain on our home computers or small business networks.
  • Mac vs. PC switching – Darren Root, executive editor of the CPA Technology Advisor magazine, wrote a September 2009 blog post about how he lives a “double life” using Macs at home and PCs in his office. If your only need a web browser to access your programs, then the physical computer may not be as important in the future. You may not need an expensive computer if you only need to access a browser. The sudden popularity of netbook computers is somewhat related to the increased popularity of web-based software. If you can access your business software through the web, then a $300 netbook could support your business as well as a laptop that is two or three times as expensive.
  • Less need for IT support – Instead of hiring a full-time IT support staff for your unique hardware and software needs, you can rely on the software providers to monitor upgrades, solicit user feedback, and handle any software issues. Your reduced need for support personnel gives you more resources to improve your business.

So what software did I use on December 19? I used a variety of software that substitutes for much of the software we have downloaded to our computers for many years.

  • Gmail – E-mail, calendar, task, and contacts (free), which replaced Microsoft Outlook.
  • Google Apps – Anything MS Office can do (also called Google Docs, free).
  • PlanHQ – Business planning software. The version I use costs $9/month, but larger business will spend closer to $30/month. Palo Alto Software, the maker of Business Plan Pro, told me last week that they are planning web-based introductions of their very popular Business Plan Pro software. I use Business Plan Pro for my clients’ formal business plans, but I maintain my own business plan on PlanHQ.
  • Highrise – 37 Signals product for customer relationship management (about $30/month). o QuickBooks Online – Online version of the accounting software leader ($9.95/month).
  • Dave Ramsey’s My Total Money Makeover personal finance site – For about $6/month, my wife and I use Dave Ramsey’s on-line personal budgeting software instead of a program like Quicken or an Excel spreadsheet.

I pay approximately $25 per month for my firm’s information technology costs. Not only can I save the cost of a full-time IT support person, but I also access my work from my laptop, netbook, smartphone, or a computer halfway around the world and have the exact same data and format in front of me. I am convinced that we will only see increased activity in this type of technology to reduce costs and increase flexibility. As demands for employee flexibility and employer mobility become more prevalent, operating our businesses inside of a browser will become more natural and more necessary.

Flexibility and value are key success factors in today’s business environment By utilizing web-based software to run your business, you are able to run your business from any location and on any computer. Instead of working in the technology maze of traditional business, you will have more time and resources to work on your business and achieve your goals.

How Success Can Hurt Your Business

By the time you start looking for more work, it is often too late. Here’s a solution to this challenge…

Feast or Famine: The Challenges of Keeping a Business Forward-Focused

Most businesses, especially ones that concentrate on Business-to-Business services, tend to operate in a feast-or-famine mindset. This happens in good times and bad, although it can get worse in times such as these, when economic indicators are worsening on just about every front on which they can be measured.

As a long-time consultant for companies big and small, this feast-or-famine mindset is something I’ve noticed more and more. The interesting thing is that companies actually operate more proactively in times of famine then in times of feast. The problems can start when business is booming, not when business is bad.

It works like this: you get a landslide of business rolling in, which sets your whole company into motion. From your administrators to your people in the field doing the work, your whole company is entirely focused on getting projects completed well and on time. There may even be numerous new jobs lined up, enough to keep you and your staff working overtime for months to come. The ability to grow and adapt to a swelling workload is, of course, the bedrock of any solid business. Not losing your focus, your cool, or the quality of your deliverables keeps your clients happy and your bottom line strong. I’ve seen this sort of adaptation in just about every kind of business, from construction companies to creative agencies to retail-oriented giants to pharmaceuticals. But hidden in this kind of approach are the seeds of a potential problem, one large enough to cause some companies to crumble when the workload begins to dry up. The result can be plunging morale, layoffs, pay cuts, or even bankruptcy.

The reality is that too often, when the workload begins to dry up and the owners and senior managers finally have some time to breathe, they realize there is little to no new work coming in. Suddenly next quarter earnings are in serious doubt. Another scramble must begin – contacts must be made, relationships developed, needs identified, but often the next few big projects can be far off in the future, leaving your company without active work for weeks or even months. This has an obvious impact on your bottom line, but it also affects companies in other ways as well. The sudden lack of work can be toxic to your staff, which can grow bored, develop poor work habits, or lose confidence in senior management. Worries about job security can leak in, and create a rumor mill that might cause some of your best employees to look elsewhere for a more fertile – and stable – company.

There’s an old adage in business: if your business isn’t growing, it’s dying. What I’ve found especially interesting is how truly successful companies take this adage to heart. It is something that is at once obvious and intuitive, and at the same time far more difficult to pull off than most of us realize.

The Role of Business Development in Successful Businesses

The obvious question is how: how do you keep your business growing when you are so busy that you hope for only a 60 hour workweek? One very effective solution is to have Business Development as an integral part of your business model. In many small-to-medium sized companies, the owner/CEO is responsible for this task. The only trouble is when that person gets too busy to focus on new business, and instead has to manage their current workload.

The solution is to hire someone whose only job is to do just that – find, create, and sustain new relationships that, when the time is right, the owner/CEO can help to mature. The job of a Business Development Executive is to go out and make new contacts for the company, especially when times are incredibly busy and the staff overworked.

The Role of the Business Development Executive

Business Development Executives have a reputation as the men and women who “wine and dine” potential clients. Hospitality is certainly part of what they do, but more than that a Business Development Executive needs to know your business inside and out. Just as importantly, they need to be able to self-generate contacts and leads in your industry. A good Business Development Executive will help to “sell” your company to more than clients who need your services in the short-term. The idea is to build enough relationships that as your potential clients grow and come across their own problems, the first company they will contact for help is yours.

This forward-looking approach is the most sure-fire way to keep your business growing, especially when you are too busy to put much energy into it yourself.

Solutions for the Small Company

Fortune 50 companies usually have the bottom line luxury of hiring a six-figure Business Development Executive to help grow the business at all times and in all economic conditions. But many small companies cannot afford that kind of salary output. One possible solution I have seen successfully implemented is to outsource this role to a freelance professional who knows your industry. This person can help you to continue to grow when times are good and your workload is too heavy to wine and dine every potential client yourself. A base salary can be attached to bonuses for any future contracts, which can help to keep things both fair and honest. A freelance Business Development Executive can help your company to continue to add clients even when you’re too busy to worry about it yourself.

“If your business isn’t growing, it’s dying.” My experience says this is true, which is why I’ve always worked with a Business Development Executive. Keep in mind that by the time it occurs to you to start looking for more work, it is often too late. A healthy business stays healthy by always challenging itself to grow and take on new projects. My last blog mentions some ways you can grow your business in busy times without having to hire new employees.

How to Find a New Business Agency

It is important to keep a good stream of customers and clients. It is very easy to get complacent when you have enough clients – but if one of those clients disappeared would your business feel the effect? Or worse would it crumble?? Working with a New Business Agency can help you win clients and grow your business. There is no denying that new business / lead generation can be time consuming, hard work and expensive but overall it can be worthwhile and cost effective.

Many Creative and Marketing Agencies work with New Business Agencies; it is an effective way to get your work in front of companies you want to work with. I wrote this article after to speaking to the Directors of Creative Agencies and other Business Development Managers. This article is for small Creative and Marketing Agencies new to new business and looking to work with a New Business Agency for the first time.

I think it fair to say in the world of new business you do get what you pay for. You can get a telesales person to call thousands of companies and pay a minimal fee, or you can choose an agency that approach new business intelligently. The second will be costly but can you afford not to?

New Business Agencies specialise in finding you clients in order to grow your business. Although agencies work in different ways, the long and short of it is that, they will phone companies on your behalf with the view of setting up a meeting between you and the potential client. Sounds simple enough, but the new business process is more than simply cold calling.

Before you jump in at the deep end there are a few factors to bear in mind when choosing a New Business Agency. They are all different and will all have diverse ideas about the way new business should be conducted. Here are a few questions to ask your new business agency before you work with them?

Question 1 -Results or Numbers?

If a New Business Agency promises to target 500 companies a week and guarantees you five meetings, be aware. This can be a potential time waster for some agencies. If a New Business Manager is pressured to get you in front of x amount of clients, they will. Whether the meeting is worthwhile or not, is not their problem they just have to reach their targets.

If the person handling your new business account is a really good sales person with a hard sales technique they may be able to force a potential client to have a meeting with you whether they have work, or you are suitable. These are good sales people, but they may not be producing qualified leads.

For example, if you are a design agency who specialises in content managed websites for small businesses, you do not want to end up at a meeting to rebrand Kellogs. Yes, this would be a fantastic opportunity, but in competition with top branding agencies do you stand a chance? If you only work for big brands similarly you may not want to show up to a meeting to discuss a £300 website.

A good New Business Manager should be keen and results driven but also able to evaluate a qualified lead. By giving too many targets you are ultimately pushing them into a corner to produce meetings. You do not want to attend any old meeting. A perfect meeting is a potential client who is looking for an agency for a particular project or looking to change their roster of agencies. A good meeting is also a simple credentials meeting with one of your wish list companies, who you plan to impress with solid ideas.

Rather than an agency driven by numbers, consider an agency driven by results. Unfortunately, but realistically, new business is not always about getting work now. It is about creating a pipeline and raising your profile. If your Account Handler has a good conversation with a Decision Maker about a suitable project which will be commissioned later that year, this is better than a credentials meeting. You can then keep in regular contact with the decision maker until that project comes up. By the time you have the meeting you will be talking about a particular project rather than running through a portfolio.

Look at the pipeline as much as the amount of meetings.

Question 2 – How Targeted is their New Business Approach?
Are you trying to reach as many companies as possible to offer your services to? For some businesses this may work but I doubt if this works for many. A New Business Agency which suggests a highly targeted approach will more than likely receive better results. For example a design agency looking to build up a client list does not want to target ‘any’ business with “we do design” it really is not going to stand out, and it simply becomes a game of chance.

A web design agency who mainly works with restaurants producing content managed websites could contact other restaurants with a similar offer. However, you don’t need to limit yourself to restaurants, always look to expand your market but do it with careful consideration. If you work with restaurants you could then aim at hotels, pubs, bars and clubs. Of course, you can always expand your market but showing a potential client experience in your field is going to be beneficial. (My next article will go further into this subject).

Look at the size of the business – if you have only ever worked with SMEs build this up gently don’t suddenly aim for Coke. Look at the location of businesses, do you have the time and money to travel from London to Glasgow for a meeting or do you need to stay local. A good New Business Agency will create a database tailored to your business capabilities. In order to tailor a database it is advisable to initially work with your New Business Agency, they should be able to give advice to you. But you need to know which direction you are heading with your business, and where you sit, and would like to sit in the market place.

Although this may sound as if I am stating the obvious, a few of the new business managers I spoke to told me stories of how their clients took little interest in the strategy and simply left to them to get meetings with no direction. These clients then refused to leave London to attend meetings and refused any project under £5000 (although they had never completed a project for this much money).

Question 3 – How do they find the Decision Maker?
When your New Business Agency is going to send your information to the company, how are they going to find the right person? There is plenty of information available on the internet these days on Marketing Directors of companies. Although it would be wonderful to gain a meeting with someone so high up in the company how likely is this?

The Marketing Director of Nike is not generally going to interview agencies for a microsite. In most cases it would be a waste of time and money trying to reach them on the phone to set up a meeting. Aim lower. Nike is a huge corporation and it will take patience and careful research to find the person in charge of commissioning microsites and it won’t be the Marketing Director.

Especially in recent years more and more new roles are appearing in companies, new media managers, advertising managers, mobile managers, interactive managers, account directors, creative directors – who are you looking to work with? Aim for less companies as research can be time consuming, but ensure your representative is talking to the right person. Letters simply addressed to the Marketing Director are hard to follow up with a phone call. Find out how and who your New Business Manager will be trying to contact.

Question 4 – Who else is the agency working with?

It is great to work with an agency that has skills in selling what you are offering, even better to get a New Business Manager with these exact skills. But if your New Business Manager is working with three Mobile Marketing Agencies is your account being kept separate? What is your agencies ethics of sharing potential clients?

Your new business account should be, if at all possible, separate to any other companies. You do not want to paying for someone else’s new business. It can be all too easy for a New Business Manager to find details of a company looking to rebrand all their marketing collateral… and keep two design agencies happy.

Question 5 – Who is your Account Handler?

Always ask to meet the person handling your account. It is your business, and they are representing you, be sure you like the way they come across. Your New Business Manager should not really read from a script and should be confident and knowledgeable enough to hold an in-depth conversation. If you are a New Media Agency does your New Business Manager know their augmented reality from their rfId barcodes, and how far can they carry on with this conversation?

In order to find common ground with a potential client it is good to know about their business before having a conversation with them. This means your New Business Manager has to be knowledgeable about the sectors they are targeting.

New Business Mangers should be versatile. They should be good researchers, communicators and able to pick up information quickly. Providing a New Business Manager has had experience in marketing or creative agencies they will understand the processes and jargon and can generally adapt to other industries that have specialist interests. Someone on the other hand, who has no background in design, marketing or creative industries in general will probably find it harder to learn everything from scratch and find out about niche markets.

If your New Business Manager has built a relationship with a Decision Maker it could be an idea to take them along to the meeting as a part of your company. Does your New Business Agency allow this? In an ideal world your Account Handler should feel they are a part of your team.

It is important for you to go to meetings prepared and know what is expected from you at the meeting. It is down to you to give your New Business Manager all the information they need. You know your market and it never does any harm to keep them updated with your knowledge of industry events. When you launch a new project let your New Business Manager know, keep them involved.

Question 6 – How do you prepare to work with an New Business Agency?

Be prepared to be involved. Most New Business Managers spoken to for this article said, “The closer they have worked with clients the more likely they are to achieve results.” Do not expect a New Business Agency to start work and come back to you a week later with lots of new work – it rarely happens like that. If your New Business Agency is starting conversations with the right people make sure you have the supporting materials. Many potential clients will ask for an email with links to your projects, PDFs, show reels or brochures – it is down to you to provide these. When attending the meetings, that you have essentially paid a lot of money to get, make sure you are prepared for the presentation. Your New Business Agency can only take you so far. Remember that if you run your business you should really be the best person to undertake your new business as you know your business inside out, your capabilities, strengths and weaknesses. If you cannot get yourself a £500,000 contract don’t expect a new business agency to. Be realistic

Many creative agencies I spoke to had worked with at least a couple of New Business Agencies before finding the one they felt they could work with, hence the reason for this article. There are obviously many questions to ask before undertaking the expense of a New Business Agency but I hope this article covers a few! Please see more advice on handling your own new business on my website http://www.kerinewman.com.