Should Your Business Go or Grow?
When you’re the owner of a successful business, one of the hardest questions to answer is whether it’s time to go or grow. Should you sell the company or should you continue to focus on growth? After years of hard work and success in your professional arena, it’s important to be able to judge what the best next step is for your company. We know that no matter which option you’re leaning towards, it’s not an easy choice.
To help business owners like you, we hosted a Go or Grow seminar at Club E, featuring panelists Chris Jones, Melissa Johnston, and Micah Thor. No worries if you were unable to make it; we’re about to give you the play-by-play breakdown right here.
First—no matter what, don’t view the “go” option as inherently negative. After all, if you don’t wake up every morning excited to be running your business, you won’t be successful (or happy). Second—don’t be afraid of banks. They want to help you, and they aren’t asking any questions a future buyer wouldn’t ask.
Here are 10 questions to help you decide whether you should go or grow:
1. Is your HR in order?
Is your employee paperwork complete, and organized in a way that makes sense? HR is the beginning and end of every employee’s journey with your company, so make sure your department is running well.
2. Are your outward-facing materials up to date?
The first thing an investor or future customer sees is your website. Whether you’re a $50,000 company or a $5,000,000 one, your website should be an ongoing project and a model of current best practices; if it’s obviously outdated, it’s hurting you.
3. Can you offer a unique and differential position?
It’s a dog eat dog world out there! Ask yourself—what do you offer that no one else does? It could be anything from a one-of-a-kind product to unparalleled customer service. Find your niche!
4. What’s your business model?
Does your product or service require a recurring subscription, or are your customers typically making one-time purchases? It’s important to evaluate what your lifetime value to a client is.
5. Do you have any intellectual property?
Are there any trademarks or patents that add extra value to your company? If you’re considering going it’s important to find that “hidden” value that could make you more enticing to a future buyer. If you’re growing then it’s good to examine how you can grow to become a better investment in the future.
6. What is your customer concentration?
Does your revenue come from many customers or do you have one big client? Potential buyers are looking for businesses with mixed revenue as it gives the company a longer life expectancy.
7. How do you stack up against other companies in your industry?
Examine your industry as a whole and try to perceive where the future will take it. What’s happening in your industry and where do you fit in?
8. Is your sales process clear and effective?
You have to be able to demonstrate that your sales process works. The proof is in the pudding and you have to be able to show a potential buyer that your future is bright!
9. Are your financials in order?
This is a big one! Do you fully comprehend your financial situation and are you able to forecast your financial future? Buyers will want to see crystal clear earnings showing that you’re coming out on top.
10. Do you have a good team?
Companies are made up of people. So ask yourself: do you have the right people in the right seats?
It is important to remember that a strategic acquisition should not be the first step for every company looking to add value, in fact, very few companies are truly ready to take such a step. However, there are innumerable ways to add value to your company; for instance, making sure your tech is up to date.
If you are honest with yourself as you answer these questions, your answers will help you determine whether you’re in a position to sell or grow your company. It’s all about timing; we’re here to ensure that you make the best possible decision at this critical stage.