Creating a Business that can thrive without you
Microsoft acquired LinkedIn for $26 Billion!! Why do you think Microsoft acquired LinkedIn? Apart from the reasons that numerous portals have written about, it is because Microsoft wants to keep growing as a Company.
What then are the ideal characteristics of the company that makes it an attractive target for acquisition?
- First and foremost, it must be cash-flow positive. i.e it makes profits
- Has a significant runway for growth ahead
- Its business is not dependent on a few large customers
- Its owners are not its business
Now lets switch perspectives.
You are the owner of a small business.
Why would you want to sell your business?
What actions would you take for the weeks, months or years prior to selling your business?
Why would you sell your business?
- You have worked very hard to build your business and would now like to cash on it to take little profits.
- By selling it to a larger Business, you want to have the firepower of the larger Business (market reach, customer base, resources) to further participate in its growth.
What actions would you take for the weeks, months or years prior to selling your business?
- Don’t be a bottleneck! — Build a company that can thrive without you!
How do you build a company that thrives without you?
Build a Product or Service that is scalable.
A scalable Product or Service has three attributes. They are:
* It is teachable — Employees can be taught to perform this service or it can be delivered through technology
* It is repeatable — Customers come back to buy it over and over again, thus creating recurring revenues
* It is valuable — Customers love this service and value it.
Now lets get down to work!
- List down all the products and services you provide and plot them on a diagram with Teachable on one axis and Valuable on the other
- Eliminate those products and services that a customer needs to buy only once.
- Of all the three qualities (Teachable, Valuable and Repeatable), its best if a product or service is repeatable, i.e customers buy from you over and over again for that particular service or product thus creating recurring revenue.
- Document the process for delivering this type (Teachable, Valuable, Repeatable) of service.
- Hire Salespeople to sell your products and services.
A (polarizing) quote: “ Your Job as a Founder is to Hire Salespeople to sell your products and services so that you can spend your time selling your company”
A great book! A must read for all founders, one that you would keep coming back to refer it whenever you set to build your own business!
