Archive for the 'Proven Strategies' Category
As you may know, Margarita and I sold our previous business (Scenario Design) in 2005 and started our new journey with a year off to travel the world and replenish our creative batteries. What a beautiful year that was. I remember it like it was yesterday. As a speaker, I tell that story many times per year and the question that I get every time without fail is: “How did you sell a service business that was so revolved around you and your talent?” And, the answers are below in this blog post. Whether you want to sell your business one day or not, this post helps you build a business that could be sold one day should you choose to.
Now, selling a business is a financial transaction, but more importantly, it is a process of presenting a company as “desirable” and “marketable”. Creating an understanding of the true value of the business to buyers in the market should be your end goal.
Business owners sell their businesses for many different reasons, including retirement, to spend more time with family, or to start a different business. B2B marketer and author John Warrillow claims that the number one reason business owners sell is illness. For many, selling their business is the most important transaction of their lives besides buying or selling their home. Regardless of why they are selling, business owners can take some specific actions to make sure their businesses are attractive to buyers, in order to maximize the financial results from selling.
In his book “The Complete Guide to Selling a Business”, Attorney and author Fred S. Steingold advises business owners to spend some time improving their offerings for sale. He suggests that owners start by improving profitability, changing from a lifestyle model to a wealth-generating model, and getting paperwork in order – and I agree with that 100%.
We decided to sell at the beginning of September 2005 and the deal was done by December 2005. Yes…you heard right, it only took a few months. Having said that, Margarita and I had spent years building systems and procedures to facilitate our processes and efficiency for our own sanity, without knowing that one day…we were going to be grateful for that in more ways than one. Below are 3 important points to consider should you want to build a business that could be sold one day.
1. Improve Profitability
Buyers looking for businesses look for a consistent record of profitability. Steingold recommends that owners who do not have profits year-over-year should wait to try to sell and work on earning at least a year or two of steady profits. Tory Johnson agrees, and cites a client that had difficulty selling because of inconsistent profits, and took 18 months to work on profitability issues, before being able to sell the company for more than double its original sales price.
Steingold cautions owners to not try and hide losses or fake profits. He says to work on improving profitability by actions such as resolving outstanding legal problems and customer disputes, getting accounts receivable in order, and getting rid of unnecessary inventory. Improving profitability is just one way to protect yourself when preparing for a sale. Other things that help potential buyers view businesses as more secure and stable include adding some protections from a company such as Life Lock. You can visit the Life Lock page, which goes into depth on their custom security solutions for business.
Steingold also advises managing receivables with an aging chart that shows 30, 60, and 90 days of outstanding accounts and good collection processes to demonstrate that receivables can be collected. Then collect as many outstanding accounts as quickly as possible. He says having a stock reduction sale produces cash for other business improvements, gets rid of old or stale goods, and cleans up storage or warehouse space.
2. Change the Business Model
Most businesses are not sellable because of inconsistent profits and unattractive business models. There are two types of businesses in my opinion: lifestyle businesses and wealth-generating businesses. Many entrepreneurs and small business owners build lifestyles that pay them salaries and dividends and a boatload of luxury, but otherwise small returns on their investment. Lifestyle businesses rely almost completely on the owners for their value and operations, making them unattractive to buyers and difficult to sell. Wealth-generating businesses are built with solid management teams and financial and operational systems that enable the businesses to operate independently of the owner’s involvement. These types of businesses are attractive to buyers because they won’t lose any operating capacity if the owner is not around and that is precisely what Margarita and I did 8 years ago. We tweaked our lifestyle business into one that was attractive to buy as a result of our team, systems and healthy financials.
3. Prepare Clear Paperwork
Buyers want proof of good business operations and profitability. Financial statements and other important paperwork such as contracts, leases, and inventory counts should present the best possible picture of healthy operations. If they don’t, Steingold advises business owners to work with an attorney and an accountant to clear up any problems in these areas, and improve the paperwork buyers will ask to see. He suggests that a three or five year plan is a good thing to include when cleaning up paperwork, since it gives an overview of business owners’ vision for growth and profitability that will engage buyers.
Leap of the Week
What’s one thing that you could change or elevate right now to help you build a business that gives you more freedom?
I read this post recently by Craig Jarrow, The Time Management Ninja and thought I would share it with you as it struck a cord. We’ve just launched The LeapZone Game - an exponential growth mastermind group - and one of the key factors of the game is “accountability” and the importance of sharing goals with a few trusted peeps.
There has been some debate in recent years about whether you should tell others your goals. In fact, there are camps of thought that you will be less inclined to complete your goals if you talk about them. And others that believe that you shouldn’t have goals at all.
I won’t debate that here, but will re-state that I believe that not having goals is a recipe for mediocrity. I am also a firm believer that it’s not only healthy to talk about your goals…it’s vital.
Here are 5 Reasons You Should Tell Others About Your Goals:
1. Clarify Your Goals: Often, we think we know our goals. However, by telling them, by spelling them out, you find out what they really are. You might find that your goals aren’t exactly what you thought they were.
2. Drive Accountabilty: It’s easy to let yourself down. And we are quick to forgive our inner selves. But, it’s not so easy to let others down. Telling others about your goals brings a new level of accountability.
3. Make Them Visible: Telling others about your goals makes them visible. It gets them out of you and into the public realm. Whether you share with just close friends or with the world, you have gotten your goals out of your head.
4. Set a Deadline: Goals without a deadline are just dreams or wishes. They are just thoughts. Tell others about what you intend to accomplish and by when.
5. Empower Yourself: Telling your goals to others gives you a sense of permission. In a way, you are officially giving yourself permission to pursue. Talking about your goals can give you the green light to move forward.
Now, I can’t know if I will successfully achieve all my goals. But, one thing is for sure…I will set myself up for success from the start with:
1. Weekly actions that align with my goals.
2. A daily ritual that allows me to be at my best.
3. A business architecture that does not allow me to drift from what’s important and/or non-negotiable.
And by stating my important goals to others, I feel much more empowered and accountable to do what is needed to reach them.
LEAP OF THE WEEK: I invite you to share at least one of your big juicy goals with someone or better yet, if you want some public encouragement, tweet me @LeapZone. Then the whole world will know your goals. (now, if that’s not accountability…I don’t know what is!)
Cheers to kicking some serious butt together!
Thank you to Craig Jarrow from Time Management Ninja for this great reminder….and for inspiring me on a weekly basis with his valuable content.
“I was planning on going to the gym tonight, but a client called…”
“I was going to go for a run, but I’m too busy today…”
Sound familiar? Given that entrepreneurs usually have incredibly packed schedules, it can be challenging to create room for a fitness routine. I’ve already discussed 4 ways you can sneak exercise into your workday with next to no scheduling adjustments. Here I’ll focus on creating room specifically for fitness. That means getting more work done in less time, so you have more time left over for fitness (and other things you enjoy)!
Here are 4 ways you can get your work done more quickly, creating space for health and fitness. (Remember that a healthy body is an important business investment! Good health means good productivity, creativity, and energy.)
1. Delete distractions.
Getting rid of things that decrease your productivity is just as important as learning skills to increase productivity. Learn to say “no”, don’t multitask, turn off your e-mail when you need to concentrate on other projects, and use a notebook to record ideas so they don’t take up valuable real estate in your head. Try to minimize anything that will distract you from the task at hand.
2. Optimize your mind for ultimate performance.
Your mind is one of the most effective weapons against procrastination, stress, distractions, and time wasting. Hone your mental superpowers and increase productivity by practicing meditation – simply sit comfortably and focus on your breath for 5 minutes. You could also create a vision board to keep yourself on track for achieving longer-term goals.
3. Optimize your workspace for ultimate performance.
Our surroundings affect our mental state, which means a cluttered workspace can lead to a cluttered mind (and thus, lowered productivity). Foster productivity and inspiration at your workspace by letting in lots of natural light and fresh air, having a “home” for all your office supplies and desktop items, creating an effective filing system, and giving your workspace an overhaul clean-up every 2 or 3 weeks.
4. Use your secret weapons: productivity-boosting apps.
Getting more done in less time isn’t about stockpiling as many secret weapons as possible. Rather, it’s about finding a select few that work for you in boosting productivity. Some examples are Evernote (keep all your notes and interesting tidbits in one searchable database), Freedom (block access to the internet when you need to get work done), Menubar Countdown (keep yourself on schedule and on track), and Remember the Milk (To Do list and task management).
Bonus tip: Remember to schedule, schedule, schedule! I’ve mentioned the importance of scheduling before, but it bears repeating. As Isabelle always says, treat yourself as your own best client. Schedule time for your fitness, and treat those times as you would any other business commitment.
LEAP OF THE WEEK:
Choose one of the above tips to implement this week, and use your extra time for a quick walk outdoors, a 20-minute yoga session at home, or any other revitalizing fitness activity you enjoy. Which tip will you start with?
P.S. For more info on getting more done in less time, check out my brand new e-book, Productivity Gems.
As an entrepreneur, you are part visionary genius, part manager, part salesperson, and sometimes, part errand runner. With all these hats to wear, not only are you challenged to keep yourself on track, but in many cases you also need to keep others in line, including your staff, clients and associates. In order to keep your variety of roles from overwhelming you – which renders you less effective and thus less profitable – you need to harness your focus.
Here are 7 tips to help you do just that, based on nearly eight years of teaching yoga and meditating, and more than a decade as a serial entrepreneur.
1) Turn the sound off.
Noise is distracting. That’s partly why many yoga rooms are silent. If you’re in focused work mode, put your phone on silent, and turn off all the little beeps from Facebook, email and their counterparts. This gives you the control to check your messages when it works for you, and allows your mind to get into a rhythm without interruption. Simply calming the bleeps and pings will do wonders to help you focus.
2) If you work from home, set boundaries around work time and other time.
When working, keep your other tasks, such as housework, family time, and social calls separate – as much as possible. By setting up containers of time for focused work, your clients get the attention they deserve, and so do the rest of your duties when you’re done. The timer on your phone is a great tool to set time-specific work goals, as the alarm will usually go off even when the phone is on silent. A simple kitchen timer will also do.
3) Establish rituals.
When I was running my yoga studio, I would start each work day by checking in with my to-do list, prioritizing what needed to get done, and establishing a loose plan for the day based on what meetings and obligations I had. No matter what was going on, this always got done. It grounded me and helped prevent overwhelm. Business and personal coaches often recommend rituals because they are good for your internal rhythm and help you establish good habits. Establishing rituals will also help you optimize your most creative times of the day. When you’re working, be aware of when you feel most inspired, and create a ritual around it to encourage your genius to flow.
4) Eat whole, low glycemic foods.
Some foods are beneficial to eat before yoga, and some will make your class a frazzled mess, resulting in poor balance, irregular breathing, and a thumping heart rate. The same principle applies to work. Sugar, excessive coffee, and processed foods, although convenient and quick in their energy boost, will result in crashes, depression, increased anxiety and overall stunted focus and creativity. Whole foods are a great alternative.
5) Use technology to stay more present.
Teaching and practicing yoga effectively requires presence of mind. This is partly why a yoga studio is usually clutter free and clear of distractions. Work focus also benefits from less clutter. I use ‘full screen’ and ‘mute’ mode on my MacBook to eliminate visual and auditory clutter. I also use the ‘read later’ option in my browser when I come across an article while researching. Smart mailboxes and alphabetized folders will help you organize your email and documents efficiently, and specific junk filters help prevent an overflowing inbox.
In yoga, ‘Savassana’, or ‘dead body pose’ is a posture that requires conscious relaxation. Athletes use this principle to optimize their performance in sports, and you can use it to increase your focus at work. Even the New York Times is buzzing with the benefits of relaxation. In order to be in top form with your business, restoration is key.
7) Come back to your breath.
I know, now I really sound like a yoga teacher. But trust me when I say that yoga and focus go hand in hand. Yoga means ‘union’, the marriage between your body and your mind, and your breath is the connection between the two. If you want to channel the entrepreneurial brilliance from your mind into action, you need to get in the zone, and your breath can help you do that. Next time you’re noticing your anxiety or distraction levels rising, stop. Regardless of your deadline, close your laptop or step outside.
Take a slow, deep breath in through your nose. No need to visualize, chant or repeat a mantra. Just feel your breath going in through your nose. Exhale slowly, and bring your full awareness to the act. Repeat five times.
When you can bring your full awareness into your moment by moment reality, the focus that ensues will not only increase your productivity, but will set an example for your staff and clients.
Even your errand-running abilities will improve…I promise you that!
Leap of the Week: This week, take your focus to the next level by using these yoga and meditation inspired tips. They will help you improve communication, productivity and profits…and leave more time for YOU to enjoy!
By Craig Jarrow of Time Management Ninja
This week I want to talk about Evernote. I have used Evernote since 2008 and absolutely love it. It is a great tool for collecting all of your notes, information, and clippings into one place. Better yet, you can access your personal “brain database” from anywhere… your computer, laptop, phone, even the web. If you don’t use Evernote, I recommend that you check it out by reading my previous post about it.
Recently, I have found myself using Evernote more and more.
I wanted to share just a few of the tasks that I use it for and invite you to share your own.
Here are 5 Tasks That Evernote Helps Me With…
1. Notes Across Platforms:
One of my favorite uses for Evernote is taking notes across all of my platforms. Whether I am at work on my laptop, at home on my desktop, or mobile on my phone… all of my notes end up in one place.
2. White Boards:
Do you ever take photos of whiteboards at work? Where do those pics end up, in your photo roll? Inevitably, they get lost among the photos of your friends, family, etc. I take meeting whiteboard pics straight into Evernote. When I need to go look for a meeting pic, I can search for it from within Evernote.
3. Solutions to Problems:
When I solve a problem, I save the solution to Evernote. If I encounter that issue again, I have the answer at my fingertips. I recently needed some computer settings that I had solved long ago, and I was able to find my note from 2009 in just a few seconds. Can you find your notes from 4 years ago? (No matter where you are?)
4. Reference Docs:
I keep my main document library at home and backed up to the cloud. However, for documents that I may need to reference on the go, I send them straight to Evernote. (You can even do this via email.) A recent example is my son’s baseball schedule. I have it right in Evernote for handy reference.
5. Web Clippings:
If I see something on the web that I might want to use in the future, I clip it right to Evernote. No cutting and pasting, simply use Evernote’s browser extension. Makes it easy to save those great ideas that you see on the web.
Getting Started With Evernote
If you are new to Evernote, or just want better tips on using it, I highly recommend Brett Kelly’s book, Evernote Essentials.
Brett wrote the book on using Evernote and he has just updated it for the latest features.
(Great back story, Evernote liked Brett’s book so much that they hired him!)
So, check out Evernote Essentials.
How Do You Use Evernote?
Craig and I would love to hear how you use Evernote.
Let us know by commenting below or by tweeting us at @TMNinja and @LeapZone