Selling a Business or Offering a Job?

The purchaser of a business, in many cases, is not interested in buying a job. They probably already have one – or can easily get one – as an option to buying.

Many business owners, on the other hand, do not pay themselves a wage or salary; rather, they take owners drawings. As a buyer, this is messy. Not only that, it is more difficult to see if the business is a stand-alone investment, offering a Return on Investment, over and above owner’s wages.

If the prospective buyer is going to work full time in the business, (s)he will want to ensure that there will be a return on funds invested over and above what they pay themselves in whatever position it is they have in then business.

The problem is that long-time business owners often have difficulty in seeing the importance of the principle of seeing the business as separate from themselves. They do not see this as a problem and blithely carry on in this manner, being emotionally and personally attached to “their baby”.

However, this attitude results in problems.

When selling the business under these circumstances, it will be heavily reliant on that owner and/ or long-serving staff. The buyer will reasonably ask:

“Will long-term, loyal customers stay with the business or will they take the opportunity to look at what competitors have to offer?”

“Are there documented systems and processes that run the business or is the modus operandi locked inside of the heads of key people?”

“Is it realistic to expect that those key people will stay on once the business is sold?”

This is where the importance of spending set times away from the business, allowing for a greater degree of objectivity is so important. Being IN the business day after day, working IN the business creates the pitfall of continuous subjectivity. We do not see the business for what it is; we don’t see what it is doing wrong and we don’t see the opportunities available.

This is the time when Strategic Thinking leads to change, both in how we deliver our service and in consideration of the opportunities that exist in our market. Without allowing for this objective view, the business owner stays trapped within the frustrating position of the status quo.

On the other hand, regular strategic thinking time opens up all sorts of opportunities for change, improvement and growth. The business is thus given a life that is not tied to the business owner nor to any of the key personnel. They might well remain as important cogs, but not imperative to the future of the business.

And when the time is right to dispose of the business, the prospective buyer can see that it is a business that operates with good people, but not because of those people. As such, it will be a far more attractive purchase proposition.

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What John Matthew believes about small business

That the owner has risked many things that others take for granted;

That there is no guaranteed income or reward for the considerable effort that is required;

That often, the family home is on the line to support the business and its constituents;

That there is a dignity and self-respect that is earned;

That entire communities would be better places if there was an increased appreciation and respect for small business.

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