Whether you want to sell your business now or run your company for years to come, you should always be working on your exit strategy. Savvy planning and careful tracking will add value to your company and help ensure the legacy of your work.
Several years ago, I sold the Maine Freeze— Maine’s first (and only) professional women’s football team—and I did it twice! The first thing I sold was our operations manual. Remember, when you sell your business, your processes have a ton of value for potential buyers.
I had started the Maine Freeze from the ground up, and we were managing to succeed in areas where similar teams were struggling. When I attended our first National Women’s Football League* (NWFL) meeting in Nashville, TN, the founder, Catherine Masters, whom I had talked to on the phone about purchasing the team, stood up and said, “Ms. Bellas, you have a lot of explaining to do!” My heart stopped and my face became red. What had I done? But what Catherine wanted me to talk about is how in just under 9 months we turned the Maine Freeze into a household name in Southern Maine. She wanted to know how it was that we were the first team in the NWFL to have all our players paid, a full staff of 11 coaches and a PR position salaried. I told her we did it through sales and marketing alignment. Of course, I didn’t know what it was called back then, I just knew that I needed to find two verticals: the team and their support staff, and the money (sponsors and fans). So I put together an operations manual that addressed both.
I left that meeting in Nashville with orders from every football team there to buy our manual, complete with their own logos. The next time I sold the Maine Freeze was a few years later, to a buyer who took over the team while I walked away. Here are 10 things I learned along the way about what you need in place in order to sell your business— either a piece of its intellectual property or the whole.Make sure you know your customers. What are your BUYER PROFILES? In the old days, we referred to buyer demographics. Buyer profiles are much more detailed. They tell you who your customer is, her name, her interests, what is important to her and what isn’t, where she hangs out online, where she shops in person, and what route she is likely to take to work. You probably have multiple buyer profiles.
- Know how you got your customers (if you haven’t been tracking this, start today). This information is going to be invaluable for buyers. They will have their own processes, but knowing how you built yours allows them to not have to start from scratch. This has a real financial value for you when assessing the valuation of your company.
- Identify your affiliates. These are the businesses/people/organizations that also target your customers but are not your competition. These are people who send you business. Who are they, what industry are they in, why did they send customers to you? This is also very valuable in valuating your company and allows the buyer to duplicate these affiliates to grow the company with a proven trajectory.
- Have a clear mission. Not just the blurb you wrote back when you started the company, but the living mission that is the heartbeat of the company. It’s why you do what you do, where you are going and how you are going to get there.
- Be certain that your team knows what that mission is and their hearts are beating to the same rhythm. This is vital, because if the whole company is behind that mission and in sync, a buyer won’t need to come in and spend time getting people on board. They will be able to merge their mission with the existing mission and bring the whole company into the future with ease. This may not add to the valuation of your company, but it won’t be an expense the new company needs to consider in their acquisition costs.
- Have your processes for sales flow in order. By this I mean a clean, complete and active CRM that is loaded with all the data to support what works and what doesn’t, a full pipeline and good records on your existing customers. This will add to the valuation of your company.
- Have your customer service process and procedures clearly in place with clean records on how many inquiries, how they were resolved and a point system in place to make sure you are meeting your customer service needs.
- Have your inbound sales and marketing strategy organized in an annual calendar showing who you are targeting, when and how, and what your call to action is. Take it a step further and show the numbers: How many prospects were brought in, how many closed, how you plan to stay top-of-mind for those who didn’t buy, and a clear strategy for staying in touch with new customers.
- Have your outbound sales and marketing strategy aligned with inbound and be sure to show your numbers. Here is an example for Prospect List A:
Create a blog post about the same topic driving them to the website.
Send an email to Prospect List A that will drive them to the website.
Be sure to follow Prospect List A on social media and then post social media language from email driving them to the website.
Sales people outbound call those who opened the email first.
Sales people call or visit the people who visited the website but didn't buy.
- Fix any major problems the data shows. Your data from email, social, and website will tell you where your content is and isn't working. If your links are not being clicked. What time of day to post on social and which platforms. If pictures are helping or hurting your posts. Which keywords were used? Which hashtags have been used - how did they do?
- Be ready to walk away. One of the best lessons and hardest things to actually do is to know when it's time to walk away. You might determine when this time will be based on annual revenue, number of customers, territory covered or offer that needs to be on the table in order to sell - but the key is to know what your milestone is so when it happens you know it's time.
The last one is there because selling a business is a lot like selling a house. You make the decision to sell and do the work to fix it up for the new family, but once you’ve finally done all those projects, you remember the reasons you fell in love with the house to begin with and want to stay! You just might find the same thing to be true with the business you built. Once you have it cleaned up enough for a new owner, you just might want to stick around and enjoy the fruits of your labor.
And that’s okay, as long as you have a good exit strategy.
*This was the name before the NFL sued and forced a name change to Women’s National Football Association.