Strategic Planning Kit For Dummies®, 2nd Edition

Creating a Sellable Business

Building value is essential to having a successful company as well as a successful exit. Jeff Clavier, founder and managing partner of SoftTech VC, shares his outlook that “good things happen to good companies.” As such, entrepreneurs should worry about only one thing: building great products that users or clients care about. Then, eventually, a good (to great) outcome will materialize. With that in mind, whether you do or don't eventually want to sell your business, applying the key principles of what makes a company valuable makes great business sense.

In the next two sections, I cover what creates value in a business and how to value yours. I also provide additional resources for this exercise.

Understanding what creates value

Many businesses are never bought or sold because founders fail to focus on what creates true market value. Often owners get sucked into working in the business instead of on the business, which results in the business becoming too reliant on the owner. The owner becomes the subject matter expert that everyone, including customers, relies on.

To prevent growing a non-sellable business, try following a few of these value-creating activities:

• Creating a repeatable, consistent product or service offering that doesn't rely on you
• Generating recurring revenue, positive cash flow, and strong, improving profit margins
• Systemizing your sales process and deal flow to ensure reliable sales funnel
• Developing coveted intellectual property, ...