Your Business: Fix It … or Sell It (part 2)

Your Business: Fix It … or Sell It?

Part 2

 OPTION TWO – SELL THE BUSINESS

If a business owner decides that there are too many problems to fix or fixing the business will take more time, effort and money than business owner is willing to invest, then selling the business is an option. Of course, if the business is damaged beyond repair, then closing the business may be the only logical option.

Distressed Sale: Different businesses have different assets. To some extent, all businesses have a variation of assets associated with administration, which often includes office furniture, computers, printer/copier,etc. A manufacturing firm will have production equipment whereas the primary assets of a service business can include its client list and supplier relationships. A distressed sale is often called a “selected asset sale.” When a business has significant existing problems, this type of sale is the best a business owner can hope for.

Optimal Value Sale: This is the type of business sale that all business owners hope for. The seller receives top dollar for the successful business venture. Depending on the structure of the Buy/Sell agreement, the former business owner could receive significant income in the form of seller financing and/or non-compete covenant value payout. Another post-sale income possibility is from being retained as a (post training and transition) full-time or part-time consultant.

The time frame for selling a business can be a few months to one or two years or longer. If a business owner seeks to have an optimal value sale, then it is necessary that business continue to be operated as successfully as possible throughout the time it takes to sell the business.

Conclusion

Making some decisions is never easy. Making business decisions can be much more difficult, given the often life-changing outcomes. The best business leaders seek knowledgeable advice before making certain decisions. When it comes to deciding whether to fix or selling a business, a consultant can provide worthy advice.

Your Business: Fix It or Sell It (Part 1)

Your Business: Fix It … or Sell It?

Part 1

Many business owners are geniuses when it comes to creating a product or establishing a service!

However, other aspects of operating a business can be challenging to those geniuses – since those aspects are outside their area of expertise and core competencies. In some cases, a downward spiral ensues, and the business owner starts to panic … which only worsens the situation. Consequently, key employees quit. Suppliers toughen their conditions. Customers stop being customers.

What is the solution?

OPTION ONE – FIX THE PROBLEM(S)

Step 1 – Accept Reality: The business owner must accept the reality that he or she has certain business strengths as well as certain business weaknesses. This can be tough for some business owners, since they have (justifiable) great confidence regarding their creation of the business’s primary product or service. Frankly, it is tough for anyone to admit to having any weaknesses. However, in order for the business to survive and reverse the downward death spiral, weaknesses realization is a must.

Step 2 – Seek Help: Given the subjective perspective of any business owner regarding self-assessment, receiving an objective perspective from an outside source such as a consultant or business mentor is needed. The business owner needs to be ready to hear the blunt assessment components which are meant to help the business identify and fix the existing problem(s).

Step 3 – Build the Team: With the helpful and knowledgeable guidance from the consultant or mentor, additional subject matter experts (SME) may need to be wisely vetted and then retained. The proper SME mix will create a business management environment where “the total will be greater than the sum of the parts.” An alternative to retaining SMEs is to create a “Mastermind Alliance” which is, essentially, an unpaid Board of Directors. In either case, the SMEs or

The right guidance can help fix the problem and help you achieve success.

Mastermind Alliance can be expected to provide additional assessments and recommendations that are geared to helping the business owner achieve survival and long term success.

Step 4 – Implement the Recommendations: Breaking old business management habits and creating new ones can be easier said than done. Nonetheless, doing so is an absolute must. Guidance from the primary consultant or mentor can help make the transition easier. One key to successful recommendation implementation is to give the new effort a chance to succeed. With that said, there will be certain recommendations that will need to be implement immediately – which the business must be ready to do. In order to fix the existing problem(s), proper and thorough implementation is required.