Preparing your Business for Sale – Lessons to Learn from John Warrillow

John Warrillow is a Canadian entrepreneur, author and speaker focused on the field of exit planning and the sale of small and middle market businesses. John initially failed the first time when trying to sell his own business. His business was extremely depending on him and was very difficult to transfer. Most his potential buyers were worried that they could not maintain the business’ profitability if they were to acquire it. After radically transforming his business to a sell-able one, John was able to sell it at a price he was satisfied with. He then decided to use his learning experience to help other business owners sell their companies. John was recognized in 2008 by BtoB Magazine’s “Who’s Who” list as one of America’s most influential business-to-business marketers.

Buyers are concerned that the business is only profitable because of it’s current owner’s skills and attitudes. For example, the business is highly relying on continuous sales efforts and the owner is very talented in selling and deals directly with customers. In his new book “built To Sell“, John suggests a model that would make the sale o f business much easier.

John’s model urges business owners to focus their business exclusively on standardized services and/or services that are easy to teach to employees with no exceptional talents.  Customized project oriented companies are difficult to sell because product manufacturing or service delivery keep changing and need constant judgment that requires talent and hard-to-find skills. Such skills and talents are not necessarily teachable to a new buyer willing to take over the business.

Another suggestion made by John in his book is hiring a team of successful salespeople so that the business owner is exclusively focused on managing the business rather than constantly selling. While there is a large availability of business buyers who have good management skills learned through extended management experience with small businesses and large corporations, and from reputable business schools, sales skills are generally considered a talent and are more difficult to teach.  It’s much easier to find a qualified business buyer with management skills than with salesmanship talent.

Finally, John stresses the importance of finding a good business broker to manage the sale process to sell the business at a desired price and with a smooth transition. John insists that the broker needs to understand all the efforts made by the seller to prepare his/her business for the sale, which efforts should be rewarded by a higher price for the business.

 

 

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