Your personal context
- How old are you?
- How much energy do you have left in your tank?
- Have you extracted value out of the business already?
- Have you managed to de-risk yourself by investing in equivalent assets outside of your business?
Only you can answer these questions, but they will go a long way in providing clarity for you and your ability to take the first step to selling your business?
Is your business ready to sell?
If I had R100 for every time someone had said to me that they want to wait another twelve months before they sell, I would have accumulated a substantial amount of money. Despite what the majority of advisors say, there is very often no real need to ‘dress up’ your business for sale.
Don’t get me wrong. You need a going concern that delivers solid returns to catch the eye of the right acquirer. However, who are you dressing your business up for?
If you do this properly, you will have more than one buyer at the table. Chances are, what is attractive to one buyer won’t necessarily be attractive to someone else. It is impossible to be all things to all acquirers.
You say you are just 12 months away….
12 Months is a magical number. Business owners always seem to be 12 months away from being ready to sell their business. Maybe it’s that big contract you are hoping to land. Perhaps you want to put in a new IT system. There will always be something.
Speaking from experience, I had a client that was going to wait, but instead committed to the process. Had they waited 12 months they would have been hit with ‘Nene-gate’, Brexit and Trump all in a 12-month period! There is no way that anyone could have anticipated a trifecta like that. I had another client that put in a new SAP system in those 12 months and the acquirer used Oracle!
You will reach the 12 month point anyway…
With the time that it takes to complete a successful transaction there is a good chance that you will cross that threshold of that big contract that you were hoping to land, putting that succession plan in or whatever the reason was that you wanted to delay the process for.
Something else that generally ruffles a few feathers, is that selling the (proven) potential generally fetches a far greater value than the past. This in itself is a whole other topic, but in the context of when is the right time to go to market, always keep this factor front of mind.
What is happening in the economy and your industry?
We are fortunate to have seen an increased sentiment in, and around, the South African economy in 2018. There is an uptick in international interest, but you know what the reality is, it never really took a major dive. The reason being that irrespective of the economy or your industry, good businesses sell. Some of my best deals happened in 2016 when the economy was under severe pressure.
Remember that when times are tough, acquirers need to buy good businesses to grow, as their own profit and be under pressure. When the economy and your industry is doing well, acquires will buy as they have excess cash to invest and will have a more bullish outlook on taking risk in their investments.
Truth is….there is no perfect time
The one thing that I have learnt over the past few years is that one can theorise for months trying to think of endless ways to increase the value of your business. Without climbing into the market and actually determining what your reality is, you will keep delaying your decision to take your business to market.
There is only one real hurdle that needs to be overcome, and that is you. If it is any consolation you will never be 100% ready. What have you got to lose? If you go to market and, worst case scenario, you don’t sell, you still have a great business to run and grow.
6 Little Things That Make A Big Difference To The Value Of Your Company
Here is a list of six little details to get right before you put your business on the market.
With the Olympic Games just having taken place last month, it is interesting to reflect back on some of the big events of the 2016 Olympic Games in Rio.
In the Men’s 100m final, for example, the winning time of 9.81s was posted by Usain Bolt. The time among medalists was one of the closest in Olympic history, and while Johan Blake of Jamaica posted a respectable time of 9.93 – he finished out of the medals in fourth place.
In the 100m dash, vital milliseconds can be lost in the tiniest of miscalculations. And when it comes to selling your business, markets can be equally cruel. Get everything right, and you can successfully sell your business for a premium. Misjudge a couple of minor details and a buyer can walk, leaving you with nothing.
Related: Here’s How To Value Your Business
1. Find your lease
If you rent space, you may be required to notify your landlord if you intend to sell your company. Read through the fine print and ensure you’re not scrambling at the last minute to seek permission from your landlord to sell.
2. Professionalise your books
Consider having audited financial statements prepared to give a buyer confidence in your bookkeeping.
3. Stop using your company as an ATM
Many business owners run trips and other perks through their business, but if you’re planning to sell, these treats will artificially depress your earnings, which will reduce the value of your company in the eyes of a buyer by much more than the value of the perks.
4. Protect your gross margin
Oftentimes, when leading up to being listed for sale, companies grow by chasing low-margin business. You tell yourself you need top-line growth, but when an acquirer sees your growth has come at the expense of your gross margin, she will question your pricing authority and assume your journey to the bottom of the commoditisation heap has begun.
5. Tighten your agreements
If you’re lucky enough to have formal contracts with your customers, make sure your customer contracts include a “survivor clause” stipulating that the obligations of the contract “survive” the change of ownership of your company.
That way, your customers can’t use the sale of your company to wiggle out of their commitments to your business.
Have a lawyer paper the language to ensure it has teeth in your jurisdiction.
6. Get your Value Builder Score
It will take 13 minutes to answer the Value Builder questionnaire. You’ll see how you performed on the eight key drivers of company value and you can identify any gaps you need to fill before taking your business to market.
Like competing in the Olympics, selling a business can be an all-or-nothing affair. Get it right and you will walk away a winner. Fumble your preparation, and you could end up out of the medals.
7 Tips for Cold-Calling Success
The cold call can be painful. Here are some tips for getting through it successfully.
The aspect of selling that strikes the greatest fear in people’s hearts is usually cold calls. A good way to make cold calls more appealing is to stop thinking of them as “cold” calls. Try thinking of them as “introductory” calls instead. All you’re trying to do is introduce yourself and your business to the prospect.
It’s important to understand the purpose of introductory calls so you have a realistic attitude about this type of business development activity.
Phone prospecting takes longer to pay off than other types of marketing efforts, so go into it knowing you’re exploring a new frontier and it’s going to take some time to get results.
As with any marketing method, you should never make introductory calls without a plan. First, always use a targeted list of prospects when making your calls.
If your product is household cleaning services, why call a random neighbourhood if you have no knowledge of income levels, number of household wage earners, or number of children? If you sell nutritional products to hospitals, why call nurses or doctors if a third-party pharmacy makes all the buying decisions? Get the right list of prospects.
You can obtain information about prospects from the list broker who provides you with the list; if you’re working from your house list, you should already have the information. If for some reason you don’t, try an introductory call like the following: “We provide mobile pet grooming for dogs and cats. Would that be a service your customers would want to know about, Dr. Veterinarian?”
Next, determine the best time frames for calling. If you’re selling financial services to upper-income CEOs or entrepreneurs, wouldn’t it be nice to know when their corporate fiscal years end?
Perhaps most of their investment purchases are made two to four weeks prior to that year-end close-out. That’s when they know how much extra income needs to be sheltered in a pension plan.
Sometimes timing is your ace in the hole. Granted, follow-up calls throughout the year may make that one important sale possible, but knowing when to instigate the first call is a priceless piece of information.
Third, plan by preparing a “sales script.” Write down what you’re going to say, what responses the prospect is likely to have, and how you’ll reply to them. No, you’re not going to follow this word for word, but if you’re nervous about making calls, it helps to have something in front of you. Chances are, after you get beyond the opening sentences, you’ll be able to “wing it” just fine.
If preparation for cold-calling is easy but actually making calls is painful for you, here are seven easy steps to get you on the phone fast:
1. Personalise each call by preparing mentally
Your mind-set needs to be aligned with your language, or the conversation won’t ring true. You need to work on developing a warm but not sugarcoated telephone voice that has that “Don’t I know you?” ring to it.
2. Perfect your phone style alone before making any calls
If you’re self-conscious about calling, you need to feel safe to act uninhibited. Try this: Gather a voice recorder, a mirror, a sales journal of incoming and outgoing phone scripts, a pen, and a legal-sized pad. Either write or select a favourite phone dialogue, then talk to yourself in the mirror. Do you look relaxed, or are your facial expressions rigid? Our exteriors reflect our inner selves. If you look like you’re in knots, your voice will sound strained as well.
Press the “record” button on your recorder, and pretend you’re talking to a new prospect. Play back the recording, and listen to your conversation. Ask yourself how you could improve your delivery.
If your voice seems unnatural and the dialogue contrived, don’t despair. As you practice and participate in real phone experiences, you’ll improve. Mastering the art of cold-calling is no different than improving your golf swing or skiing technique.
3. Create familiarity all around you
Use family photos, framed testimonial letters, motivational quotes, or whatever gets you in a positive, enthusiastic mood. If you like, play some music that inspires you.
4. Use your imagination
Pretend you’re a prospective customer calling a bookstore to see if they have a book in stock. If it helps, record how you sound to get the feel of your inquiring phone voice.
It’s always easier to imagine you’re a customer in need of information than a salesperson trying to force your way into the customer’s time.
The inquiry call is good practice because the tone of the conversation is “Can you help me?” or “I need some information.” Try to convey that same attitude when you use the phone to contact future customers.
5. Watch your tone of voice
You don’t want to sound sheepish and embarrassed, nor do you want to be arrogant. The ideal tone is warm, businesslike, curious, and straight to the point.
A good option is a question or a cut-to-the-chase statement such as “I’ve got a question. We’re offering a two-for-one special during the next 30 days on all our coffee drinks, just to get people into the store. I need to know if you’ve ever stopped in while shopping at the mall, and, if not, why not? We have got the greatest ice-blended mochas in town.”
6. Make your goal a fast “50 in 150” — that is, 50 calls in 150 minutes
Three minutes per call is all you need. With so many voice-mail systems intercepting calls today, this should be easy. Never give people the impression you have time to chat. Chatting isn’t prospecting. You’re on a mission. Get to the point, then move to the next prospect.
7. Take five after 15
After 15 calls, take a five-minute break — stretch, eat, sip a soda, turn on some tunes, and pat yourself on the back because you’re making it happen. Then grab the phone for 15 more calls.
This article was originally posted here on Entrepreneur.com.
9 Tips to make your e-commerce business wildly successful
With these nine tips, you can be well on your way to becoming a successful ecommerce-based entrepreneur.
While the e-commerce economy is poised for significant growth in the coming months and years, you can only expect to see results if you approach it in the right way. That means focusing on the following critical tips for e-commerce success.
1. Don’t rush the launch
One of the biggest mistakes unsuccessful e-commerce entrepreneurs make is forcing or rushing the launch of a website. You only get one shot at launching your website and you can’t mess this up. While it’s okay to purchase your domain name and throw up some sort of “Coming Soon” page, you should avoid the big reveal until you’ve laid some substantial ground work (SEO, content marketing, social media, paid advertising, etc.).
2. Put the focus on the user
It’s no secret that the biggest shortcoming of e-commerce businesses is the inability to let their customers touch, feel, smell, and see (firsthand) products before making a decision. While there’s currently no solution for solving this problem, you can compensate for this deficiency in other areas of the business. Some of the best tips include offering appropriate pricing, giving free shipping and making the checkout process easy with simplified shopping carts.
3. Test absolutely everything
Before, during and after you launch any e-commerce business, you should invest in testing and analytics. Think like the customer and figure out what’s working, what’s not, and the why behind those answers. Here’s a look at some of the best A/B testing tools.
4. Work closely with social
Any e-commerce entrepreneur that tells you he outsources social media or delegates it to other team members is crazy. Social media is the heartbeat of your business, as it gives you an uninterrupted glance into the lives of your customers. While it’s perfectly fine to have a social-media manager, it’s pertinent that you’re involved with it, too.
5. Incorporate social elements
Going along with the previous tip, it’s a great idea to include social elements on your e-commerce sites. Things like product reviews and testimonials follow buttons and even social login options all help the conversion funnel.
6. Go mobile
Bill Siwicki of Internet Retailer references Goldman Sachs, saying, “Tablets will play an increasingly important role as worldwide consumer spending via mobile jumps from $204 billion in 2014 to $626 billion in 2018…” If you aren’t building e-commerce businesses with mobile in mind, you may be irrelevant in three to five years.
7. Stay on top of SEO
As the ecommerce economy experiences rapid growth, more and more businesses will be entering this increasingly crowded space. That means it will be more important than ever to stay on top of SEO in order to stand out from the competition. Connecting with a skilled SEO will help you stay competitive in the long run.
8. Collect information
Unless you plan on launching a single site and stepping away (most entrepreneurs are tempted to keep trying), it’s critical that you collect customer information and build databases to aid future launches.
9. Continue evolving
Finally, never stop evolving. Technology, trends and customer tastes will change, and so must you if you want to succeed in such a variable market.
With these nine tips, you can be well on your way to becoming a successful e-commerce-based entrepreneur.
This article was originally posted here on Entrepreneur.com.
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