By Rieva Lesonsky
Are you expecting your small business to be the source of your retirement funds? When it comes time to sell your business, do you expect to get a fair price? If so, you may be in for an unpleasant surprise. Far from getting a fair price, you may not be able to sell your business at any price—even if the company is profitable and successful.
Why not? If your business can’t run without you, John Warrillow explains in Built to Sell, its desirability is limited. Warrillow, who has started and sold four businesses of his own, knows his stuff, and in Built to Sell he explains how you can maximize your business’s value by positioning it to run without you.
Built to Sell tells the story of Alex Stapleton, an ad agency owner who has reached a plateau. His company is profitable, but it’s also a roller-coaster of ups and downs, deadlines that never let up, and clients who all want a piece of him. In his 50s, Alex is tired of working never-ending hours and ready to spend more time with his family. Warrillow says Alex is an amalgam of real business owners he’s worked with, and any entrepreneur is sure to recognize bits of him- or herself in Alex’s situation.
Alex’s friend Ted Gordon, a successful entrepreneur, steps in to show Alex how to make his business “sellable.” Built to Sell uses a service business as its example—a smart move, since service businesses are often dependent on their owners for success. Ted explains how to “product-ize” the business so it’s more appealing to a business buyer. Next, Alex learns how to come up with systems, improve cash flow, find a niche and ultimately enable his business to run without him.
Along the way, Alex has to make some hard choices, like turning down his former dream client, firing his biggest client and dealing with difficult employees. But the hard choices pay off in a business that becomes successful beyond Alex’s imaginings—and even gives him some free time to spend with his family.
Dispelling any notion that selling a company is quick and easy, Warrillow spends nearly a third of the book on the actual sales process, taking the reader through the ins and outs of selecting the right business broker, surviving the due diligence process and choosing the perfect buyer.
I’m not a huge fan of the parable format for business books, but it’s very effective here. Warrillow draws the reader into Alex’s choices, making information that could easily be dull and dry interesting and easy to understand.
An eight-step implementation guide, 16 tips and additional resources round out the book. Whether you’re thinking of selling or simply want to build value in your business, Built to Sell is a practical, useful guide that will change how you think about your business.
If you order a book this week you’ll also get a one-year subscription to Inc. Magazine, an e-book from E-myth, a two-hour conference call with Warrilow and a $25 donation to Kiva in your name.