What Business Owners Should Consider Now When Selling Their Business in 2014, Lakes Business Group, Inc. Can Help Advice Owners on Actions That Will Help Get an Offer

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Now that it's the end of 2013, business owners may be considering selling next year; so now is the time to ensure that the business isn’t all about the owner.

Key Factors for Owners when Selling their Business.
The transition from manager to coach is a gradual evolution where the goal is to ask more questions, spend more time listening, and spend less time talking and directing

From the latest Sellability Score* research involving 2300 companies from around the globe, here are two key factors that are linked to the probability of owners getting an offer for their business when it’s time to sell.

#1: Owners are almost twice as likely to get an offer if their business can survive the “hit-by-a-bus” test.
If the owner was out of action for three months and unable to work, would their business keep running smoothly? The more the owner's staff and customers need the owner, the less valuable their company will be to a potential acquirer. One good way to start making their business more independent is to begin spending less time at the office. Start by not working evenings or weekends, and don’t reply if employees call. Once they get the picture, the best ones will start making more decisions independently. The shift will also expose your weakest employees, the ones that need training or that need to find another job. As for the owner, it might come as a shock to find out how much their business has become such an essential part of him or her; but if the owner is going to sell the business one day, they will need to look at it as an inanimate economic engine, not as something that defines who they are.

#2: Companies with a management team (as opposed to a sole manager) are getting offers at almost twice the rate.
If owner's don’t have a management team, hiring a 2iC is a good first move. A second-in-command can help the owner balance the demands of running their company and advance their targeted exit time.

Here’s a four-step plan for hiring a 2iC, thanks to advice from Silicon-Valley-based Bob Sutton, author of Good Boss, Bad Boss.

1: Identify someone internally. "The research is clear," says Sutton. "Unless things are totally screwed up, internal candidates have a strong tendency to outperform external leaders."

2: Give your 2iC prospect(s) a special project, one that allows them to demonstrate their leadership skills to the owner's team. If owner's candidate excels, it will be clear to owner's team why he or she was selected.

3: If owner picks a 2iC from an internal pool, explain the choice to the rest of owner's team. At the same time, owner should wrap their arms around those who were passed over and make it clear how much their contribution is valued.

4: Shift from manager to coach. "The transition from manager to coach is a gradual evolution where the goal is to ask more questions, spend more time listening, and spend less time talking and directing," says Sutton.

*The Sellability Score is a cloud-based software tool that allows a business owner to assess the “sellability” of their company. The researchers at The Sellability Score analyze the data from 2300 companies in a variety of countries to understand trends in the business market, with a special focus on the liquidity of privately held businesses.

Free Tool Tells Owner If Their Business Is Ready to Sell

For more questions about buying, selling, or raising private capital for a business, please contact Lakes Business Group, Inc. at 262.347.2083 or Nicole White at nicole(at)vrbizlakes(dot)com

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