Every business has multiple legal relationships that allow the business to operate. The most important of these legal relationships are reflected in important agreements such as leases, franchise agreements, bank notes, insurance policies and so on.
Do your best to make sure that each of these agreements is current. Make sure the provisions are reasonable. Most important, for things like leases, make sure that you have adequate time remaining and that it is reasonably transferable. If your business is location dependent you may not have a business to sell without three to five years left on your lease.
In a related issue if you have any pending lawsuits against you, try to settle them. Lawsuits spell uncertainly and disruption and carry a perceived risk far greater than the actual risk. If you can settle them that risk and the reduction in your sales price is gone.
Tuesday, September 26, 2006
Tuesday, September 12, 2006
Maintain Employee Moral
Anyone who thinks emotion is not a part of sales has forgotten about the last time they bought a new car. Were you “thrilled”, “upset”, “mistreated”, or what? This is emotion.
The final transaction has to make sense from an accounting standpoint in order to get financed. Yet emotion provides the drive so everyone in the process solves the problems and gets to closing.
Your people are your most important asset. If they are enthusiastic and motivated they are worth more than if they are lifeless and depressed. While we understand the importance of confidentiality we like to do plant tours when people are working. Businesses are more impressive when they are alive with people.
Your employees attitude will be felt by a buyer (whether they know it or not) and will translate into a higher or lower offer.
We are big believers in having employees work in their areas of strength. No one thinks anything of the fact that athletes spend 100% of their time in a very narrow specialty that they excel in, yet the common logic with business employees is that everyone should be cross trained. Certainly a few people need to be cross trained but encourage everyone to do the work they excel at.
Our last thought on employees is cut your staff down to fighting size. Too many employees reduce profitability and often reduce motivation. If your business has slowed down or you have installed labor saving technology, yet the staff is the same, they are all worrying about who is going to be let go. They are creating work and worrying that they will get caught. Solve the worry. If you don’t the buyer will. You can do it humanely and in all likelihood increase the value of your business.
The final transaction has to make sense from an accounting standpoint in order to get financed. Yet emotion provides the drive so everyone in the process solves the problems and gets to closing.
Your people are your most important asset. If they are enthusiastic and motivated they are worth more than if they are lifeless and depressed. While we understand the importance of confidentiality we like to do plant tours when people are working. Businesses are more impressive when they are alive with people.
Your employees attitude will be felt by a buyer (whether they know it or not) and will translate into a higher or lower offer.
We are big believers in having employees work in their areas of strength. No one thinks anything of the fact that athletes spend 100% of their time in a very narrow specialty that they excel in, yet the common logic with business employees is that everyone should be cross trained. Certainly a few people need to be cross trained but encourage everyone to do the work they excel at.
Our last thought on employees is cut your staff down to fighting size. Too many employees reduce profitability and often reduce motivation. If your business has slowed down or you have installed labor saving technology, yet the staff is the same, they are all worrying about who is going to be let go. They are creating work and worrying that they will get caught. Solve the worry. If you don’t the buyer will. You can do it humanely and in all likelihood increase the value of your business.
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