Buyability is something every business owner should strive towards, even if you don’t plan on selling your business. If you’re not convinced you need to make your business buyable, check out this article I wrote last week that explains the reasoning behind buyability.
But if you’re ready to dive in and find out what will make your business buyable, read on!
A Buyable Business Is an Asset Like Any Other
Let’s say you own a house and want to sell it. Before you invite potential buyers, you will do all the necessary repairs and spruce up the place. Typically, you can do this over a month and get your ROI soon thereafter.
The same logic applies to business buyability, with one caveat: you can’t really do last-minute renovations. To build a buyable business, you need to think strategically from the get-go.
Maybe your business is already buyable? If you’re not sure, I invite you to take the Buyability Assessment quiz so you can figure out where you are in your journey.
But for now, let’s see what the main characteristics of a buyable business really are.
The Key Factors That Make Your Business Buyable
A buyable business is an enterprise that others would want to own, a business that is worth more than the sum of its parts because it has goodwill value.
Goodwill value accumulates when an entrepreneur increases the value of the assets in the business by applying vision, organization, and energy and by harvesting the ideas and efforts of a group of people working in or for the benefit of the organization.
These are the three main criteria I look at when assessing the buyability:
- Is the business self-managing? Is it based on systems and processes, can it run without an entrepreneur who created it?
- Is it more profitable than its competitors? What are its competitive advantages? Does it generate a healthy profit?
- Does the business attract top talent? Does it have a great culture and dedicated employees?
Chances are, your business right now is lacking in some of these departments. If you want to see how to improve, get my new book Buyable, at a 50% pre-order discount.
And if you notice any of the following factors at play in your business, get the book ASAP!
What Doesn’t Make Your Business Buyable
As an entrepreneur, you’ve probably been focusing on making your product or service live up to your vision. But have you given any thought to the rest of business operations? Have you hired the right people to help you build a well-functioning organization?
In my book, I describe 10+ factors that make a business unbuyable. For now, let’s just list our top 5 offenders:
- Aging Workforce
- Lack of Documented Processes
- No Recurring Revenues or Customers
- Obsolete Technology
- No Internal Sales and Marketing Engine
In the next article, I’ll go into detail on these and more, but if you can’t wait and want to make your business buyable today, pre-order my new book Buyable now!