The following is the thoughts and analysis of Frank Williamson, the CEO of Oaklyn Consulting, a consulting firm that helps closely held businesses and nonprofits with a company’s sale, mergers, acquisitions, capital-raising, investor relations, succession, and other strategic corporate finance decisions.
Anyone who’s built a company from scratch knows that it’s a process of constant learning – but over time, you get better at it. After climbing that mountain, though, entrepreneurs might have the feeling of being back at square one when the time comes to sell their business.
The world of mergers and acquisitions can seem fancier and have higher stakes than what most business owners are used to. But at its heart, M&A is about sales, something every entrepreneur has experience in. So, the first step to selling a company is to change your mindset — to start thinking of your business as the product for sale, rather than whatever it is you do or make.
As an investment banker, I often work with entrepreneurs to sell their businesses and create succession plans. I’ve found that one of the biggest predictors of a smooth and successful sale is when the company owner takes an active, collaborative role in the process. Not only can they be an invaluable source of information about the company’s internal workings and their industry as a whole, but they can also serve as their company’s most effective evangelist to potential prospects.
Here are a few ways in which the owner/CEO can contribute to a successful company sale:
- Being able to talk about the company’s future.
The most important way a CEO can contribute to the sales process is to have a clear, plausible vision about what happens after the sale and be able to communicate that story clearly to potential buyers or investors. A leader is typically experienced in listening to people talk about their needs and in working out a solution. Such a person will also be ready to have a nuanced conversation with prospects about the specific benefits of combining businesses. They’ll be able to describe how the company was built to withstand a change in ownership, as well as how it is expected to weather future changes in its sector. Bringing this level of specific knowledge will go a long way toward helping prospective buyers overcome any hesitations they might have.
- Building a pipeline of realistic prospects.
My belief is that when business owners/CEOs are also good networkers, they win at the game of selling companies. They’re the ones who know their industry – their customers, suppliers, influencers, and competitors. They might even be on friendly terms with some of those competitors or have talked casually about what a combination of their companies might look like.
When an entrepreneur starts thinking in earnest about who they might sell their company to, those years of networking conversations can really pay off. They will have an imaginative view of who their most realistic prospects are, plus they’ll have personal connections established with people that they can start building from.
- Bringing good sales habits to the negotiating table.
A big mistake that business owners tend to make when they’re succession-driven is that they chase a single deal opportunity to the exclusion of everything else. When that prospect doesn’t work out, they find themselves starting from scratch with a new prospect – which also might fall apart at some point. This can be an exhausting process that ultimately leads to desperation.
The reality is that even for serious-minded buyers, a variety of obstacles can keep a deal from making it across the finish line. But luckily, most entrepreneurs have a well-honed skill in their back pocket that they can draw from: They know how to sell things. And the process of selling a business is just like selling anything else. You build a pipeline of prospects, have conversations with several at once, and constantly track the likelihood of a deal with each one.
When it comes to early conversations, be structured enough that you can move to other alternatives if people say no. As your conversations gradually become more serious, continue visiting with those other prospects so that you have clarity on what your options are. Being able to walk away from the negotiating table is the most powerful tool you have to ensure that you end up with the best deal possible.
The limitations of a CEO
Despite the talents that a business owner brings to selling a company, the process usually isn’t something one person handles all alone. There’s simply too much to do, and it can be difficult to carve out time around the normal responsibilities of running a business.
In addition, a business owner might have other reservations about starting the sales process. Some might not know what the future holds for them or whether they want a continued role in the company working for the new owner. Others might not want it to be known that their company is for sale, though this level of secrecy seems peculiar for people who are of retirement age – it would be weirder at that point if an owner didn’t have a plan to sell.
To work through these questions and others related to a company sale, it’s customary to seek out an investment banking professional who’s familiar with the M&A process and can serve as a sounding board. By combining this guidance with their own abilities, company owners can help set the conditions for a sale that allows them the next chapter of their choosing.
4 easy ways to keep track of inventory this holiday season
(BUSINESS ENTREPRENEUR) Feeling overwhelmed by your inventory this year? Use these three simple tips to keep your stock managed for the end of the year.
2021’s retail holiday season is in full swing. With it comes waves of purchases and shipments, both in stores and online. Holiday inventory management is essential to get the best handle on the continuous rushes. Organization, strategy, and automation are the 3 main steps to stay on top of inventory this year. Deliberate use of these will create a better setup for the coming months.
Organization takes many forms. In the stockroom, a messy workspace will slow down sales and shipments, making the entire store inefficient. However, with the right classifications, labeling, and management, the stockroom can become the leanest place in the store.
First, stores must have a point-of-sale system that can cleanly organize everything into actionable data, according to Software Advice. When a transaction occurs, the system logs it and, from there, employees can get a better understanding of what inventory is selling fastest.
In the back, employees can change the inventory layout to prioritize items that are selling well. Keeping that area fully staffed at all times may be the best move during the retail holiday season rush. For instance, employees can categorize clothing by material, size, and color.
The store will need to use a full-featured inventory management system. With it, employees can accurately track what goes in and out of the store through scanning barcodes and logging shipments. With a better handle on what consumers need, its location in the stockroom and better tracking, backorders, and sellouts can decrease.
Retailers must have a clear strategy for holiday inventory. Otherwise, the rushes and high demands and orders can easily overwhelm employees and result in lost revenue. We are already seeing orders falling behind due to multiple shortages, including chips and even, employees themselves. Combined with organization, a plan should involve prioritizing customers’ needs and interests and increasing item accessibility.
Just as employees can organize the stockroom based on what consumers will be buying the most, they can also rearrange the store to put those items toward the front. That way, people can get what they’re looking for right away. This strategy will work online as well — where the site advertises the popular items on the main page.
Then, based on what POS and inventory management systems report, managers can order more sought-after items ahead of time. At home or in person, consumers get what they want without frustration, while retailers know the exact numbers in their inventory.
Another crucial area to focus on is in-store pickup. Some consumers don’t want to pay for shipping. Instead, in-store pickup ships their order to the nearest retail location, where they can quickly claim it. Especially during the holiday rush, designating a separate section for these items will be essential for a strategic inventory.
Automation is a broad topic when it comes to holiday inventory. With this wide scope, though, retailers can integrate countless systems to conquer the rushes more effectively. Helpful gadgets and organization equipment include Internet of Things sensors and big data. They will go a long way in monitoring inventory at all times.
IoT sensors are small and practical. While they can attach to any items in the stockroom, they’ll be invaluable for everyone along the supply chain to use. The sensors show merchandise’s exact location and specifications, which an inventory management system will automatically present in actionable ways.
When retailers use the information from sales and inventory, it falls under the category of big data. With the right analytics and prediction software, employees can use this data to understand coming trends and better understand what they’ll need to order and when.
If businesses — retail and warehouses alike — are looking for an efficient way to find stock without wasting time, they can use robots to retrieve it. These autonomous robots cut down on search times when they know the exact location based on IoT sensors or barcode scanning.
4. Make Post-Holiday Changes
The work continues even after the retail holiday season ends. However, businesses can take steps to optimize their setups for months afterward to keep drawing people in through next year’s holiday season.
The first step is to declutter. Get rid of things that will no longer be a priority to most consumers. A sale or clearance section is an efficient way to profit from obsolete inventory.
Then, it’s time to step back and reevaluate the landscape. What has changed for consumers? What new trends are emerging? Social media will be invaluable to track how customers want to spend their money in the coming year. It’s also a critical place to build an e-commerce presence for the future.
A Lasting Central Inventory
Year-round, but especially during the holiday season, inventory must be a critical factor for any retailer or warehouse. With better organization, strategy, and automation, the workplace can run more smoothly. These factors will also improve communication across the supply chain, making the holidays a profitable breeze for all retailers.
Maintenance costs add up: How to decrease expenses to increase revenue
(ENTREPRENEUR) When it comes to managing your business cost-effectively, you have to be mindful of your balance sheet. It’s not all about revenue!
When it comes to managing your business in a cost-effective way, you have to be mindful of your balance sheet. It’s not all about revenue. Sometimes, it’s the expense side of the ledger that needs a little attention. More specifically, you have to think through maintenance costs in order to maintain a lean operation.
6 Ways to Lower Maintenance Costs
Maintenance costs add up quickly. Whether it’s the minor kind (a few hundred dollars here and a couple thousand there) or the major kind (massive five- and six-figure incidents), maintenance is not cheap. Thus, anything you can do to lower these costs will be a huge help. Here are several tips:
- Simplify Procedures
We make maintenance way more complicated than necessary. The first step is to just simplify your procedures. You do this by reviewing all procedures and looking for redundancies and/or tasks that aren’t necessary to the objective. When there are too many steps in a process, people are likely to be overwhelmed or confused (which obviously leads to poor outcomes). In this case, simple is best.
- Invest in the Right Software
Consider what percentage of your maintenance processes are performed manually versus automatically. While there are certain tasks that require manual input from a skilled technician, there are countless tasks that can be offloaded and streamlined.
The key to automating is to pick the right software. These programs integrate with your equipment and use data analytics and machine learning to predict when certain parts or systems will need repairs. This allows maintenance teams to move quickly.
- Choose Quality Equipment
You can reduce many maintenance issues by simply investing in quality equipment on the front end. It might cost you more initially, but it’ll save you money over the long haul.
Consider, for example, two pieces of equipment: Machine A ($10,000) and Machine B ($15,000). Machine A costs significantly less, but it requires $1,000 in maintenance costs per year. Machine B costs more upfront, but only requires $300 in maintenance costs per year. That means Machine B costs $700 less per year to maintain. Over a 10-year span, that results in $7,000 in savings (which obviously outpaces the $5,000 more that was spent upfront). On top of that, there’s less downtime and greater reliability. It’s just an example, but you get the idea!
- Emphasize Preventive Maintenance
Most businesses have a reactionary approach to maintenance. They wait until there’s an issue and then they address it. And though this can work, it’s usually more expensive. Not only does it lead to more serious issues, but there’s typically downtime associated with the repair. Preventative maintenance is the better approach.
The key to a good preventative maintenance program is to structure it appropriately. This means basing your preventative maintenance on operating hours rather than the calendar.
“The problem with servicing a machine every so many months is that the amount of time you use it can vary,” Onsite Installer explains. “Servicing an item every 30 days, for example, may mean you’re over-or-under-servicing it based on actual hours.”
The best way to stay on track with your preventative maintenance is to use a SaaS-based maintenance system that collects and analyzes data in real-time so that you know precisely when to address something.
- Hire the Right People
It’s easy to get so focused on equipment, software, and processes that we forget about the importance of people. However, at the end of the day, your business is built on the backs of people. As they go, so the company goes. The best piece of advice is to hire people who are meticulous, diligent, and proactive.
- Train People Well
Hiring good people is just the start. You also need to train these people so they embrace your goals and processes. Help them understand the importance of maintenance and give them the knowledge, skills, and tools needed to carry out their responsibilities in a timely and cost-effective manner.
Putting it All Together
There’s nothing easy about maintenance. It’s gritty, expensive work that doesn’t always look good on paper. But do you know what does look good on paper? Being able to point to thousands of dollars in savings because of smart, proactive decision-making. Use these tips to get ahead!
Entrepreneurs and freelancers are ditching Calendly for the all new zcal
(ENTREPRENEUR) Sure, Calendly can be efficient and organized, but it can sometimes feel cold and transactional. For a more personal experience, try zcal.
Have you ever been emailing back and forth with someone trying to set up a time for a call or a coffee and they send you a link to their Calendly? Sure, it’s efficient and organized, but it can sometimes feel cold and transactional. This is why Saurabh Chandarana and, co-founder, Eric Yieh designed zcal, a scheduling alternative that makes the process more personal and human.
First, the creators have designed a booking page that provides a delightful, on-brand experience for anyone booking a meeting with you. Self-expression has been put front and center, letting organizers showcase themselves with a cover photo, welcome video, and personal intro.
These elements both inform and entertain guests, helping them answer the two most important questions before every meeting: “Who exactly am I meeting?” and “Why should I be excited to meet them?”
Second, they’ve made it easy to create personalized links so you never have to worry about insulting anyone with a generic booking link. Simply select from your contact list to instantly personalize a link in seconds with your recipient’s name, email, and profile picture.
Best of all? This tool is free forever.
The creators believe that calendar scheduling, like email, is an essential utility that should be accessible to absolutely everyone. So, we’ve decided to make zcal completely free (forever!) for personal use. The free plan includes many of the premium features you pay for elsewhere including unlimited links and calendar accounts, and we have plenty more in the pipeline.
Now, for the unique features.
You can get instant context on the people you meet with a personal intro and brand your page with a cover photo – upload your own or select from 1M+ Unsplash photos.
The platform also allows you to showcase yourself with a welcome video that gets people excited to meet you. You can even share your link as an animated gif or formatted email text. Finally, you can coordinate large group meetings with meeting polls (see ya, Doodle!)
Want to fit zcal into your schedule? Check it out here.
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