PROFITS MATTER® in Business Marketability!Chia-Li Chien, Ph.D., CFP®, PMP®, CPBC
Chia-Li Chien | Mar. 07, 2014
As I’ve worked with many business owners like you over the years, helping them build value in their businesses, I find myself continuously reminding them—Please don’t sabotage your business’s marketability!
You are probably saying to yourself, maybe under your breath, “Chia-Li, of course I’m not going to sabotage my own business. I’m not stupid, you know.”
I understand that you would never intentionally sabotage your business. Your objective is to build your business in value, then transfer it —profitably—when the time is right for you.
However, that objective can sometimes be difficult when there are so many people, investors and family members to consider. Sometimes those offers, or changes in circumstances come unexpectedly. Sometimes they are good news in the form of a family member or employee approaching you with an amicable plan, or the third party offer you dreamed of but never thought you’d see. Sometimes you’ve planned for investors to maximize your business’s marketability. Sometimes you haven’t.
No matter what stage your business is in or what kind of offers or transfer plans you have or anticipate, it pays to regularly check the marketability of your business.
Joanna (not her real name) owns a niche financial service firm with a very long sales cycle, requiring intensive labor to produce their product. She has her fair share of cash flow issues due to the nature of how she structures her client payment. Sometimes, she misses her monthly or quarterly projections. It may then take a few months just to catch-up to where she planned to be.
Joanna found herself in a predicament. Her office lease was going to expire in 90 days and she was unhappy with her landlord. She found another building nearby, and without giving it enough thought, made a deposit on the new space and started packing.
Meanwhile, her cash flow was about 25% behind projections.
Around the same time, she got a large contract from a very high-profile client and needed to invest in her ecommerce infrastructure to accommodate some new services contracted with this client. With the new space, she would pay 30% more rent than before and now the new business would require an additional 25% cash flow for a necessary ecommerce upgrade. She would have to use her line of credit or her business credit card for this 5-month investment.
(Have you ever found yourself in a business predicament like Joanne’s?)
This further put her in arrears on her available cash position in the business. Joanne found herself reacting to the added pressure and stress. She became very agitated, even at home with her own family. This, of course, caused unwanted friction in her family.
Joanne decided to follow my PROFITS MATTER® process. PROFITS MATTER® is not a quick fix—it’s a process—but within three months time, Joanne was back on track and her cash flow met the expected KPI (Key Performance Indicator) and improved her business’s marketability. She continues to work with many different tools to ensure her business short- and long-term objectives stay on track.
I was able to help Joanne determine —
1) What creates a profitable, marketable business performing above industry benchmarks.
2) Consistent marketing and sales processes that continuously generate profitable customers, products (including services) and makes it attractive to potential buyers.
3) A way to regularly monitor her business marketability, financials and KPI activities while making adjustments in order to realize a return on investment (ROI) in the business.
After 12 months following my PROFITS MATTER® process, Joanna achieved her working capital cash reserve goal. Most importantly, she gained an additional 150% in net profit.
In working with many successful businesses, I’ve noticed each one seems to follow a process similar to these steps below to obtain and maintain maximum business marketability:
1) Select and apply the right combinations of tools.
2) Follow the process that works consistently.
3) Monitor results regularly and make proper adjustments to either tools or process.
We can show you how to improve your business marketability as you move forward. Or, perhaps you want to continue to work with your existing CPA and others you depend on. We can coach you on what to look for and how to work with your existing team. Schedule an appointment today!