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Moving From Conversations to Actions

Updated: May 28


Three brothers have done well in business. They are in their 60s and tired. They bring in a young buck to learn the business and buy them out. But he cannot get the financing. Weary, the brothers decide that if they don’t sell the business by the end of the year, they will shut it down and sell the inventory at auction.


But before the end-of-year, one brother dies. There is no one to do the bookkeeping and watch the back office while the other two run the front. In an unexpected lurch, they are facing liquidation.


One of their long-time customers is interested in the business and steps forward. He has an uncle that believes in him and will finance. The uncle has 40 years’ experience as an entrepreneur and investor and he has a few questions. His questions seem brutal but force everyone to view the business differently.


We are involved and advising in this process at the time of this post.


Looking at your business as if you had just bought it can be healthy and eye-opening. It forces you to have a critical eye and address hard questions. These are the questions that a new buyer will want answered before they buy.


If you just bought your business today, there are three areas you would concentrate on: people, customers, and profit.


People

Prospective buyers will want to know about the people you have prepared to make the business successful in your absence. Who will do what you do? Have you given them the opportunity to prove themselves? In your absence, what will not get done? What employees will need to be elevated? What employees might be eliminated?


New buyers will want to meet with every employee in the first thirty days to listen to their ideas. The best ideas can come from them. The new buyer will want to implement a few of these noticeable suggestions. With every employee, new buyers will also want to make their values clear, explaining the way they do business and why.


If you have not done the work of elevating a team to make your business successful in your absence, your business is likely worth only a fraction of its potential. Developed and released people are a valuable asset in your business. Potential buyers will evaluate the leadership assets that come with your business.


Without you at the helm, your business may only be a collection of physical assets. Many entrepreneurs learn this too late.


Customers

The lifeblood of your business is its customers. New buyers will want to meet and listen to the top five customers. They will investigate to fully understand why these customers continually do business with you. What are the reasons that keep them coming back? Buyers will develop a profile of the most valuable customers with what they learn.


After determining the top three things most critical to delighting your customers, buyers will start measuring them. Weekly flash reports will keep the team informed of progress (or the lack of).


In the second thirty days, new business owners will meet with and listen to the top five prospective customers. They will press to find out what it will take to get their business.


Profit

Two of the top reasons that businesses fail is poor accounting systems and lack of capital. Are there systems in place to account for:

  • every dollar (financial audits)

  • excellence in execution

  • sufficient capital

  • insurance coverages

  • the most profitable product/service lines for expansion

Talking about something is easy and inexpensive, but taking action and delivering on promises is more difficult and requires more of you. Moving from conversations to actions requires intentional effort.


It's healthy to treat your existing business as if you just bought it today. Or, if you were selling your business today, what would the prospective buyers want to know in advance?


From those perspectives, what next steps will you take?


Let me know what you learn.


Harry T. Jones



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