What Story will you Tell?

By Wayne Slavitt

Every business owner has a story to tell about how they got to where they are today and where they are headed in the future. If you are lucky enough to sit across one day from a potential buyer, you will be asked to tell the story of your business. And the story you will be able to tell will have a significant impact on whether that particular buyer will want to move forward with the purchase of your company. Being able to tell your story in as positive a light as possible is a purposeful action you must be aware of in the years leading up to your sale.

The initial part of telling your story involves being able to do an elevator pitch, a very brief explanation of what you do. Can you succinctly describe your business in one sentence? For example, “We manufacture finely-milled aluminum parts for the aerospace industry throughout the United States and Europe” is clear, straightforward, and brief. On the other end of the spectrum, I had a client who told me, “We import office furniture, safes, cutlery, and other items from China and occasionally from Mexico.” I was unable to get a quick visual of his market and what drove his business. If you struggle with your elevator speech, a buyer will struggle with understanding your business. That is not good!

Once you refine your elevator speech, start to craft the story of the life of your business. Start at the beginning and do not leave out any important events—even the unpleasant ones. Who founded your business? Why did they start it? How was the company capitalized? Who were the initial partners? When were new partners, if at all, brought in? What markets did the company initially serve? How did that change over the years? What was the company known for in the early years? What is the company's reputation today and how has that changed over time? How has your labor pool changed over the years? Do you have long-term employees or does your base of staff turnover on a regular basis? What is your sustainable, competitive advantage?

On the negative side (don’t fret, everyone has some negative things), be prepared to honestly explain the pitfalls and shortcomings you faced, such as the loss of a key account, that warehouse fire, a tax audit, having to relocate your business, the computer conversion that shut you down for a week, etc.?

Most buyers will understand that your past hasn’t been all a bed of roses and that periodically you faced troubling times.

Here is the key takeaway: The question is not, “Did you have problems in the past?”, but more importantly, “How did you deal with them when they occurred?” No one could possibly expect a perfect history with any business or with any individual for that matter. Life would be too boring if we didn’t have issues to confront. As you tell your story, explain how you handled those issues as they came up.?

For example, when you lost that key account, how did you replace those revenues? How long did it take? Has that issue recurred? What caused that warehouse fire? What changes did you implement to prevent a subsequent fire? Did you make any adjustments to your insurance coverage? For each negative issue in your company’s life (particularly the more recent ones), be prepared to discuss how you reacted to it, what changes you put in place and what you learned from it.

It’s also important to note that telling your story to a potential buyer doesn’t stop when you get to the present day. Knowing you will be telling your story to the next owner of your successful company, you must be aware of how new decisions and events will affect the continuing story of your company. Are you getting better or continuing to decline??

All major decisions and issues you face must be viewed through the lens of a buyer. Ask yourself, “How will a buyer react to:

• opening a new warehouse?
• hiring a CFO?
• adding a major new products line?
• etc.??

Even though you may not know who your actual buyer will be, you should still evaluate each major issue you are about to make based on how it will be measured by a potential buyer. How will this new decision affect your future? How will it alter my business risk? How will it impact the value of my company?

Most importantly……how will it enhance the story you are about to tell? It’s showtime!

Side note: Tesla's factory in?Fremont, California?is one of the world's most advanced automotive plants, with 5.3 million square feet of manufacturing and office space on 370 acres of land.

About the Author, Wayne Slavitt:

Wayne Slavitt is an expert in maximizing business value. Over the past 40 plus years, Wayne has been involved in numerous and diverse entrepreneurial projects in both principal and advisory capacities. Wayne’s broad involvement on both sides of the aisle ranges from executive positions as CEO, CFO, and corporate controller, to consultative roles as an investment banker, specialized business professional, and company founder.

Wayne has extensive public speaking experience, having been a frequent lecturer for Vistage and its predecessor company, The Executive Committee, as well as the keynote speaker at the ECRM Conference and a featured lecturer at Medtrade. Wayne’s new book, ”Run It Like You’ll Sell It: Adopting the Seller’s Mindset to Maximize the Value of Your Business” instructs business owners and their trusted advisors on how to properly prepare for an eventual sale of a company to achieve peak results.

Through his consulting company, The PrimeMark Group, Wayne provides exit planning consulting services to successful companies with revenues of $10 million to $100 million in a variety of industries.

For media, appearances, and booking Wayne Slavitt to speak at your next event - Contact Luminary Leaders: Direct 909.519.3712 - [email protected] - luminaryspeakers.com