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CompensationMaster Newsletter Article, August 2002 At some point in the life of every company it becomes time to
think about selling the business.
Much like selling a home, you can put it on the market as is or
you can devote some effort fixing it up first to make it more attractive to
potential buyers.
To get the highest possible purchase price when you sell your
business, here are five steps you can take:
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Put policies and procedures in place |
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Strengthen your value proposition |
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Rationalize compensation |
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Build in long-term maintainable income |
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Put yourself in front of buyers |
We'll address the first two items this month; the last three
next month.
Put Policies and Procedures in Place
The first step is to make sure you have solid management team and good
procedures in place. Can your business run without you?
You need a strong manager or managers, with good administrative
and financial support staff. If you're still doing everything yourself, start
delegating to your management team. Make them accountable for results.
Then document policies and procedures to make sure everyone
understands what they are supposed to do.
Strengthen Your Value Proposition
The second step is to strengthen your sales force, and develop ongoing
recruiting campaigns and programs that aid in retention.
Look at your sales force with new eyes. Why do they work for
you? What value proposition do you offer them? Can that value proposition be
transferred to the new owners?
Do you offer extensive lead generation and lots of
administrative support so they can focus on closing? Do you have gorgeous
offices? Both of those will transfer.
But if the main reason they work for you is your sparkling
personality, that's a problem. If the new owners have to be as charismatic as
you are, you are severely limiting the number of people you can sell to.
Take the time now to re-examine your value proposition. Listen
first to what your sales reps want, then rebuild your offering to meet their
needs.
You may be burdening your company with expenses for benefits
and services that your representatives don't want or need. Ask them.
See if they really value working in a building with marble
floors and crystal chandeliers. Maybe you can cut back your space there and
open a satellite office where rents are lower.
Maybe they don't want dental insurance. Maybe they do want
daycare. Or a better retirement plan.
Consider offering your sales force a choice of value
propositions. You can design offerings that appeal to different groups within
your sales force; perhaps one for top producers, one for entry-level reps, one
for reps who want a lot of support, one for reps who want a stable and secure
income.
By designing offerings that meet the needs of different types
of sales associates, you expand the pool from which you can hire, and improve
recruiting and retention.
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