An old saying in negotiating the sale of a business goes like this: The buyer says to the seller, “You name the price, and I get to name the terms.”
Another saying used to explain the actual value of the term full price: “If we could find you a business that nets you $250,000 a year after debt service, and you could buy it for $100 down, would you really care what the full price was?”
It seems that everyone is concerned only about full price. And yet, full price is just part of the equation. If a seller is willing to accept a relatively small down payment and carry the balance, a higher full price can be achieved. On the other hand, the more cash the seller wants up front, the lower the full price. If the seller demands all cash, barring some form of outside financing, full price lowers – and, in most cases, the chance of selling decreases as well. Even in cases where outside financing is used, such as through SBA, etc., the lender will do everything possible to ensure that the price makes sense.
Sellers should understand that both what they hope to accomplish in the sale of their business and the structure of the actual sale can dramatically influence the asking price. Price is obviously important, but other factors may be even more important. For example, consider a seller with health issues who needs to sell as quickly as possible. In his case, timing becomes more essential than price. Another seller may place more importance on her business remaining in the community. In her case, finding a buyer who will not move the business may supersede price or certainly influence it.
Likewise, the structure of the deal can both influence price and be a more significant factor than price to either the buyer or the seller. The structure can dictate how much cash the seller receives up front, which may be more important than price for some sellers. On the other hand, sellers should also be aware how much the interest on their carry-back can add up to. If cash is not an immediate concern, monthly payments with an above-average interest rate may be enticing.
These examples all demonstrate the importance of the business broker professional sitting down with the seller prior to recommending a go-to-market price. During this meeting, the broker should find out what is really important to the seller, as these issues may have a direct bearing on the price.
Sellers should look at the following factors and rank them according to importance on a scale of one to five, with five being extremely important.
• Buyer Qualifications
• Full Price
• Amount of Cash Involved
• Commission/Selling Fees
• Closing Costs
• Exclusive Listing
• How the Business is Shown
• How a New Owner Continues the Business
By ranking these items and discussing them with a professional Business Broker, a seller can receive helpful advice from the broker on price, terms, and structuring the sale.
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When you are buying or selling a business, you might very well end up making a deal with someone from another generation. Therefore, it only makes sense to take the time to understand that individual’s background and how that might cause behavioral differences. It is important to understand and reflect upon where many of them are coming from and the collective experiences and trends that shaped their identities and perspectives. At the same time, you can identify your own biases, strengths and weaknesses that may be caused by your own upbringing.
The strategies in this article originated from Chuck Underwood who is considered a leading expert in the diversity of communication styles between generations. He is the author of a major book on the subject as well as host of the long-running “America’s Generations with Chuck Underwood” on PBS.
Underwood’s perspective is that people of each generation were molded by their unique formative years. The decisions that buyers and sellers make will be impacted by their generation. Mostly likely, the buyers or sellers you will be coming into contact with will be either Baby Boomers, Generation Xers and Millennials.
Working with Baby Boomers
Baby Boomers (those born between 1946 and 1964) are a major force in the business world. While they often possess a patriotic passion to improve the country, they were also witness to a time of great change via many movements including the civil rights and women’s movement.
When you’re dealing with Baby Boomers, it is important to remember that they will want to build relationships and get to know you. Common courtesy is very important to Baby Boomers. That means they’ll expect you to show up on time and turn your phone off during meetings.
You’ll want to keep in mind that older Baby Boomers may be experiencing hearing and eyesight loss. As a result, you’ll want to keep your type and font size larger, and make text easy to read.
When you’re working with your clients, it only makes sense to pay attention to the generation during which they were raised and adapt your approach accordingly. Understanding generational differences will help you get a leg up on the competition while at the same time helping your clients achieve their goals.
What is Generation X?
Generation X (or Gen X) had a wildly different formative experience than the Baby Boomers. Generation X is generally defined as being born from 1965 to 1980. This generation spent its formative years from the 1970’s through the 1990’s. In stark contrast the relatively more pleasant and optimistic childhoods of the Baby Boomers, Gen X had a rougher ride.
America became more mobile during the time period during which Generation Xers grew up. As a result, many children were uprooted and separated from their friends, family and hometown roots. Growing up, these individuals witnessed a variety of scandals ranging from political and religious figures to sports figures. Gen Xers witnessed the systematic dismantling of the American middle class and with it a general lowering of quality of life, opportunities and confidence in corporations. In the end, Gen X was quite literally left home alone and lived as “latch key kids.” It is no wonder that this neglected generation has some issues.
Individuals growing up during this time learned early on that they had to be ready to fend for themselves. Since Gen Xers have been met with consistent and systematic disappointment and even wide scale institutional betrayal, this generation, on average, is more distrustful of organizations.
Gen Xers are self-reliant and independent and one of their core values is survival of the fittest. In his view, Gen Xers are self-focused, individualistic and want everyone to skip the nonsense and get to the point. They have no real interest in getting to know you or playing a round of golf.
Working with Millennials
Millennials spent their formative years in the 1980s and early 90s. They are a very optimistic and tech savvy generation. They are also the most classroom educated generation in history.
It is also very important to note that Millennials are the most adult supervised generation in history. So-called “helicopter parents” who work to protect their children from setbacks are the norm. Employers find that Millennials are entering adulthood, but are still relying upon their parents to help them make decisions and even career choices.
Where Gen Xers are distrustful of the “wisdom of their elders,” Millennials actively seek out such advice. Likewise, Millennials tend to volunteer a good deal and look for ways to solve the world’s largest problems.
You will find that Millennials will enjoy building a relationship with you. Keep in mind these individuals tend to be quite socially conscious and they may very well expect you to agree with their views. Additionally, there is a chance that they will have their parents involved in their business dealings.
Keep in mind that the de facto tech addiction, or at the very least acute overreliance on technology, has led to issues with Millennials’ soft skills. They can often lack the ability to read another person’s body language and adjust accordingly.
In the end, regardless of what generation you are working with, it is important that you continually adapt. This will greatly increase the odds of cementing a successful deal.
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When you are selling a business, your business broker or M&A Advisor will likely create a Comprehensive Business Review, or CBR. This comprehensive document can then be presented to prospective buyers once they have signed all necessary confidentiality documentation. It is essential that this document builds trust between both parties, as this will go a long way towards achieving a successful deal.
The bottom line is that your CBR will be 95% positive. The majority of the document will be dedicated towards selling and promoting your business. Therefore, it only makes sense to disclose some potential problems. When handled correctly, the disclosure of problems can actually be a strong asset.
For example, current weaknesses of your business could become strengths in the mind of the buyer. For example, a business with a very poor online presence represents a substantial opportunity for a buyer to improve marketing and communications. Summed up another way, don’t be afraid to include negative information, especially if that information represents an opportunity.
It is important that there is an element of trust between the parties. Creating that sense of trust begins with the CBR’s seller section.
Buying a business is radically different from buying a home. When someone buys a home, they usually don’t care too much about the person who they are buying the home from. But buying a business is usually a different experience. Your buyer will want to feel as though they have a fairly clear understanding of who you are and what you are about.
In the seller’s section, the buyer should get a decent idea of who you are. Your broker or M&A Advisor will want to interview you to gain ample information to include in your CBR. Your broker may even want to find out about your family, hobbies, interests and more. You may even want to consider including photos of yourself and your family.
The bottom line is that a potential buyer should be able to pick up the CBR and get a good feel for what you are like. If no level of trust is ever established between the buyer and seller, then it will be much more challenging for the deal to be successful.
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The first face-to-face meeting between a buyer and seller is one of those “make or break” meetings. The best way to prepare for it is to think of this meeting like a first date. The dynamics are very similar. You’ve spoken on the phone and you’ve emailed. Now there is enough interest that you both want to meet. Like a first date, the goal here is to get to know each other but, I recommend you do the following three things to ensure this meeting goes as well as possible.
Preparation means three things. First, have a plan for the meeting. Where will you meet? When will you meet, during business hours or after hours? Who do you want to attend from your side? Do you want to have handouts or a formal presentation? Will you be serving refreshments or snacks? Do you know who the buyer is bringing to the meeting? Will you give the buyer a tour of your business? Does the business show well or do you need to do a little housekeeping before buyers visit? Does it make sense to give buyers samples of what you make or sell?
You should determine these things, not the buyer. Once you have a plan send your plan to your buyer. Buyers need to understand how your sales process works and what is expected of them during each step of the process.
Determine your Desired Outcomes Ahead of Time
The primary goal of this initial meeting is to show the buyer that everything you said about your business in the offering memorandum was accurate so they have enough confidence in you and your business to submit a purchase offer or Letter of Intent (LOI) to buy your business. However, you may also have several other goals as well. Below is a list of some typical secondary goals.
- Confirm the buyer’s financial qualifications by asking questions like how much money he had available to invest, what is the source of these funds, where is the buyer in discussions with potential lenders, what is the buyer’s credit score, etc.
- Confirm the buyer’s business experience by asking questions like, tell me about the other businesses you’ve owned, or tell me about your previous business management experience.
- Confirm the buyer’s interest in your business by asking them what they think about your business, how does it compare to other businesses they’ve looked at, does it fit what they were looking for?
- Assess the buyer’s character. It’s important that you sell your business to someone you like, respect, and admire. Chances are if you like the buyer, so will your employees and customers. Trust your gut. If something doesn’t feel right about the buyer, it probably isn’t
- Determine the buyer’s timeline. Business brokers are fond of saying “Time Kills All Deals” and it’s true. Another important goal is to determine how quickly a buyer is prepared to move and to determine if their timeline and your timeline line up.
Have an Agenda
Preparing an agenda ahead of time will help ensure that you accomplish your goals for the meeting. A sample agenda for a successful buyer meeting might look like this.
- Introductions & Welcomes – 10 minutes
- Buyer Background. Ask Buyer to describe their background, experience and why they are looking to buy a business – 10-15 minutes
- Seller Background. The seller describes how the seller got into the business and why they are exiting – 10-15 minutes
- Business Update. The seller gives the buyer a summary of how the business has performed since the offering memorandum was prepared and provides the buyer with a current year-to-date P&L statement. 10 minutes.
- Q&A. Seller to answer any questions the buyer has. 15-30 minutes
- Tour. Give the buyer a tour of the business and continue to answer questions throughout the tour. 15-30 minutes.
- Buyer Feedback. Return to your office or conference room and ask the buyer what they think. Discuss what they like and what they didn’t like. Get a list of any additional information the buyer would like from you.10-15 minutes.
- Next Steps/Action Items. Tell the buyer what your timeline is and if they are interested, the next step is for them to submit an offer or Letter of Intent. Determine if they plan to submit an LOI and if so, when they plan to do it. 10-15 minutes.
Of course, this is just a suggestion. Feel free to modify it to suit your particular situation. However, please note that the entire meeting is designed to last between 1 1/2 and 2 1/2 hours. Try to keep the meeting to around 2-3 hours, max. Sometimes, the chemistry between a buyer and seller is great and the conversation can continue for four or five hours, but I don’t recommend it. If that’s the case, I recommend scheduling a second meeting rather then let the first meeting go for more than three hours.
Asking and Answering Questions
Now that you have an agenda, the next steps if to prepare a list of questions you want to ask the buyer. Keep this with you during the meeting as a reference so you don’t forget any of your questions.
When responding to a buyer’s questions, try to only answer the question asked. It’s best to keep your answers factual and not share long war stories or go off on tangents about things the buyer didn’t ask about. For example, if a buyer asks what are your Average Days Receivable is, just answer the question. Don’t tell a story about the one customer who refuses to pay within 30 days, and often stretches you out to 190 days, so you told him he now needs to pay in full when he places an order.
Building a Positive Relationship
It goes without saying that you should do everything possible to keep the meeting polite and respectful and to avoid any discussion about politics or religion, which often can be hot points.
Nothing builds a more positive relationship than truth, so make sure that all of your answers are truthful, accurate, and complete. While you are trying to sell your business, you don’t want to come across as a salesperson. Let y our business sell itself. The best way to do that is to as real and as honest as possible.
For example, if a buyer asks who your competitors are be truthful. Every business has some level of competition. So don’t pretend that your company has no competition. This will simply make the buyer skeptical and make him wonder what else you may be fibbing about.
One last word of advice. Be sure to do your homework on the buyer ahead of time by asking the buyer to send you a copy of the buyer’s resume before your meeting. That way, you can do a Google search on the buyer and the companies he’s owned or worked for so you can assess during your meeting how truthful the buyer is being with you.
If you follow this advice, you will greatly increase the odds that your first meeting with a buyer will accomplish all of your objectives.Read More
If you are thinking of selling your business, one of the important issues to think about is whether or not to provide seller financing. Seller financing is an essential component in the sale of most small to medium-sized businesses for several reasons. First, many potential buyers don’t have the necessary cash to bridge the gap between your asking price and the amount of money they can borrow from a bank. Second, even if they do, buyers are often hesitant to invest every dollar they have into a business that to them is a new and untried venture. Third, most buyers (and their lenders) feel the best way to ensure a smooth and successful transition from one owner to the next, is for the seller to have some “skin in the game” after the deal closes. That way you, as the seller, will have a financial incentive to help the new owner should he or she run into any hiccups during the transition period after the sale closes. On the flip side, if you insist on an “all-cash deal”, many buyers will interpret that as a sign that you are not confident that the buyer or the business will continue to be successful.
In fact, that is often the reason sellers insist on an all-cash deal and are reluctant to provide any type of seller financing. They are afraid the buyer will not be successful and they will never get paid the amount they financed. While that is certainly possible, you should also consider the significant benefits that providing seller financing can provide. Statistics show that sellers are much more likely to receive a full price offer if they provide seller financing. On average, a seller who demands an all-cash deal will only get offers of 70-80% of the asking price. Why is this? It’s because a demand for an all-cash deal signals to buyers that you don’t have confidence in them or the business, to that makes the investment feel risky. As a result, they discount the price to account for that risk. So, for example, if your business is listed at $500,000, not providing seller financing could end up costing you $100,000 to $150,000 in lost sale proceeds. That is a “guaranteed” loss. On the other hand, if you provide $100,000 in seller financing in the form of a seller note that is repaid over 2-years, you may receive some or all of that money over time. So if you consider the discounted selling price as a guaranteed loss, then any money received through seller financing is money you wouldn’t have had before.
Even with this compelling reason to provide seller financing, you might still be hesitant. If that’s the case, it’s important to note that seller financing has advantages in addition to simply increasing the proceeds you receive. These include:
- Providing seller financing greatly increases the chance that your business will sell.
- The interest you receive on a seller-note is in addition to the selling price. For example, a $100,000 seller note at eight percent paid over three years, provides you with an extra $12,000 in interest payments.
- With interest rates at their lowest level in years, you can get a much higher interest rate from a buyer than you can by putting the money in a CD or bank account.
- The taxes due on the principal amount of the note are deferred until you receive the principal payment. That means that it is taxed in future years when your tax bracket is likely to be lower than it is the year you sell your business. This can save you a lot of money in taxes.
- Financing the sale helps ensure the future success of your business, which your buyer and employees will greatly appreciate.
- Providing seller financing allows you to play a passive or inactive role in your business until the note is repaid.
Obviously, there are no guarantees that the buyer will be successful in operating the business. However, it is important to keep in mind that, in most transactions, buyers have a lot more at risk than you do. They have likely invested all of their liquid capital, provided a second lien on their home, and personally guaranteed the bank loan. As a result, they are highly invented to do whatever is necessary to ensure that the business succeeds. Although this investment doesn’t ensure the business will be a success, it means your buyer will work very hard to make it so.
The last thing to consider is that there are lots of different ways to structure any seller-financing you provide. Talk with Sport Club Advisors about the different solutions we have to that can minimize your risk and, in many cases, mean the difference between a successful transaction and one that fails.
Because of the benefits to the buyer, the buyer’s lender, the business, and the seller, approximately 80% of the deals closed last year included some type of seller financing. So, if you are serious about selling your business, consider the pros and cons of offering seller financing and talk with Sports Club Advisors about the best way to structure that financing to ensure your deal closes and you minimize your risk.
Sellers generally desire all-cash transactions; however, oftentimes partial seller financing is necessary in typical middle market company transactions. Furthermore, sellers who demand all-cash deals typically receive a lower purchase price than they would have if the deal were structured differently.
Although buyers may be able to pay all-cash at closing, they often want to structure a deal where the seller has left some portion of the price on the table, either in the form of a note or an earnout. Deferring some of the owner’s remuneration from the transaction will provide leverage in the event that the owner has misrepresented the business. An earnout is a mechanism to provide payment based on future performance. Acquirers like to suggest that, if the business is as it is represented, there should be no problem with this type of payout. The owner’s retort is that he or she knows the business is sound under his or her management but does not know whether the buyer will be as successful in operating the business.
Moreover, the owner has taken the business risk while owning the business; why would he or she continue to be at risk with someone else at the helm? Nevertheless, there are circumstances in which an earnout can be quite useful in recognizing full value and consummating a transaction. For example, suppose that a company had spent three years and vast sums developing a new product and had just launched the product at the time of a sale. A certain value could be arrived at for the current business, and an earnout could be structured to compensate the owner for the effort and expense of developing the new product if and when the sales of the new product materialize. Under this scenario, everyone wins.
The terms of the deal are extremely important to both parties involved in the transaction. Many times the buyers and sellers, and their advisors, are in agreement with all the terms of the transaction, except for the price. Although the variance on price may seem to be a “deal killer,” the price gap can often be resolved so that both parties can move forward to complete the transaction.
Listed below are some suggestions on how to bridge the price gap:
- If the real estate was originally included in the deal, the seller may choose to rent the premise to the acquirer rather than sell it outright. This will decrease the price of the transaction by the value of the real estate. The buyer might also choose to pay higher rent in order to decrease the “goodwill” portion of the sale. The seller may choose to retain the title to certain machinery and equipment and lease it back to the buyer.
- The purchaser can acquire less than 100% of the company initially and have the option to buy the remaining interest in the future. For example, a buyer could purchase 70% of the seller’s stock with an option to acquire an additional 10% a year for three years based on a predetermined formula. The seller will enjoy 30% of the profits plus a multiple of the earnings at the end of the period. The buyer will be able to complete the transaction in a two-step process, making the purchase easier to accomplish. The seller may also have a “put” which will force the buyer to purchase the remaining 30% at some future date.
- A subsidiary can be created for the fastest growing portion of the business being acquired. The buyer and seller can then share 50/50 in the part of the business that was “spun-off” until the original transaction is paid off.
- A royalty can be structured based on revenue, gross margins, EBIT, or EBITDA. This is usually easier to structure than an earnout.
- Certain assets, such as automobiles or non-business-related real estate, can be carved out of the sale to reduce the actual purchase price.
Although the above suggestions will not solve all of the pricing gap problems, they may lead the participants in the necessary direction to resolve them. The ability to structure successful transactions that satisfy both buyer and seller requires an immense amount of time, skill, experience, and most of all – imagination.
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Historians have long known the historical relevance and impact of epidemics and pandemics. Despite our various technological advances and the complexity of our society, disease can instantly change the course of history. Not having a robust global system for dealing with disease and pandemics comes with a hefty price tag. In the case of the COVID-19 economic crisis, the price tag will no doubt be in the trillions.
You can’t control what has happened, but you can focus on what to do when the pandemic is over and life begins to slowly return to normal. In his recent article, “How to Hit the Ground Running After the Pandemic,” author Geoffrey James explores what businesses need to do to jumpstart their operations once the pandemic is in the history books.
James wants his readers to understand that the pandemic will end and that business owners need to be ready to charge back in when the pandemic is over and the economy rebounds. As James points out, if history is any indicator, the economy will eventually rebound.
Almost everything about this economic downturn is unique. Take, for example, the fact that the U.S. has just seen its largest-ever economic expansion. The gears and wheels of the economy were spinning along quite quickly before the pandemic hit. This could help restart the economy faster than in past severe economic downturns. In short, many experts feel that this particular economic downturn could be short, but of course, this is speculation. There is no way to know for sure until COVID-19 is in the rearview mirror.
James correctly asserts that businesses need to put together a plan for how they will get up and running as soon as the pandemic is over. His recommendation is to divide your plan and thinking into four distinct categories: Facilities, Personnel, Manufacturing, and Marketing.
Each of these categories has three key questions that business owners should be asking themselves so that their businesses are ready to hit the ground running when COVID-19 is over. Below are a few of the key questions James recommends asking.
- How can we create the most sanitary and disease-free workplace possible?
- Which employees will continue to work from home?
- When there’s a spike in demand, how will we ramp-up?
- What will be our “We’re Back!” marketing message?
The pandemic caught everyone except the experts off guard. Moving forward, business leaders, think tanks, and politicians alike need to work to develop and implement robust plans to minimize the damage caused by pandemics. Humanity, and business, has been “lucky” several times in recent years, as we dodged bullets ranging from Ebola to SARS.
As James points out in his article, “Failing to plan is planning to fail.” Businesses need to plan for the recovery and they need to plan for another pandemic because another one is quite possible especially if better planning and decision making are not firmly entrenched in place.
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Clearly, some industries are taking a bigger hit from COVID-19 than others. Any industry that requires a great deal of interaction with the public, or where people gather in large groups, are obviously having very tough times. Movie theaters and restaurants, for example, have essentially gone dark. Some restaurants are easing the bloodletting a bit by providing delivery, but in the vast majority of cases, revenue pales in comparison to what it was prior to the pandemic.
While there is no doubt that the hospitality industry is suffering right now, business owners should understand that there are concrete steps they can take now to improve their odds of surviving the pandemic. In this article, we’ll explore a few of these key ideas.
One of the areas every decision maker and business owner in the hospitality industry should be thinking about right now is staff. During a recent industry roundtable discussion, John Howe, chairman of the International Association of Business Intermediaries, pointed out that staffing problems will continue long after the pandemic has paused or is over. He believes that hospitality businesses will have a tough time getting the staff they need, especially in the short run.
His key piece of advice is to work to have a line on people for key positions. This will allow you to at least get back up and running with basic operations. While it may be a while before hospitality businesses are at “full steam,” it is critical that they are able to open up in some fashion, as this will translate into much needed revenue. Hospitality businesses looking to survive the pandemic should focus on making certain that key positions have been filled. In this way, the post-pandemic relaunch can be as smooth as possible.
Founder and President of Cornerstone Business Services, Scott Bushkie, explained that there are a lot of hospitality industry people out of work right now, and this represents a real opportunity. Now, is the perfect time to potentially upgrade staff. There are plenty of experienced and proven hospitality people looking for positions. The new people you bring may come with extra benefits such as bringing their customers, suppliers, and other relationships with them. For those in the hospitality industry who may have always wanted to upgrade their team, now is perhaps the best time in history to do so.
Employees are a foundational element of your business. Improving your staff means you’ve improved your business and boosted your odds of survival. Bringing in new team members can help you prepare for the post-pandemic business environment. It also offers up the potential for you to upgrade an important element within your business.
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There are many things that you should be doing to deal with the COVID-19 pandemic. At the top of the list is to be proactive. Now is the time to be thinking about how best to position your business after the economy has returned to something near normal. Now is not the time for self-pity. In fact, not preparing for the relaunch of the economy will cost you.
In David Finkel’s recent Inc. article entitled, “10 Things Every Small-Business Owner Needs to Do to Deal with the Impact of COVID-19 on Their Business,” Finkel outlines the 10 key steps business owners should take immediately. Finkel is the author of 12 business books and CEO of Maui Mastermind business coaching company.
There is no way of knowing how long the COVID-19 fueled economic downturn will last, and that means time is of the essence. Business owners, regardless of their particular sector, need to prepare as though the economy could relaunch tomorrow.
Finkel’s 10 Things:
- Take steps to protect your staff and customers from getting sick.
- Tell your customers what safety steps you’re taking.
- Educate your staff on how to stay healthy at work and at home.
- Engage in scenarios planning to deal with how markets could change.
- Enlist vendors and suppliers for help. You should ask them to negotiate payment terms.
- Take steps to plan out your cash flow.
- Open a dialogue with your management team.
- Go on the offensive and look for opportunities.
- Get your team together and brainstorm.
- Be sure your key leaders communicate in a united fashion.
There are definitely some commonalities amongst these 10 important steps. You’ll notice that communication and education are at the heart of most of these points.
There is a lot of fear and uncertainty out there. More than almost any time in modern history now is the time to communicate. All business owners should be advised to communicate with their customers, clients, suppliers, staff, and management team in a clear fashion. Effective communication based around a consistent and logical message can help to reduce fear. The fear sections of the brain are driven by our primordial ancestors’ dread of the unknown lurking in the darkness. Part of being a good leader is to reduce those fears whenever possible.
Another common thread is planning, which includes looking for new opportunities. Whenever there is chaos and fear, there are also opportunities. You should be looking for those opportunities, whether it is improving your own business practices or looking for other companies to buy.
Good communication and planning can help you navigate these choppy waters. Planning for the recovery from COVID-19 pandemic could be the difference between staying in business and going out of business.
Developing Your 90-Day Plan
Those who want to make sure their businesses survive this pandemic will want to achieve a laser-like focus. It is important to realize that the forced downtime triggered by the pandemic affords you the opportunity to work on potentially neglected aspects of your business.
Summed up another way, now is the time for dynamic and focused action. In this article, we’ll address what you can do to help your business survive this unusual time period.
Reevaluating Your Business
It’s time to step back and look at every aspect of your business, including your processes. You should be encouraged to find new ways of doing things. In short, now should be viewed as a time of opportunity to reboot your business. That way when the pandemic has subsided, and your business picks up once more, it is more efficient, more effective, and more competitive.
Scott Bushkie, Founder and President of Cornerstone Business Services, recommended that business owners create 90-day plans where they look for ways to innovate. This strategic plan should focus on what they are going to do and what they want to accomplish. It is critical that there is an actual plan that achieves tangible results and not simply a list of things that should be accomplished. Listed below are a few questions you should be pondering.
- How can I outperform the competition?
- How can I innovate?
- How can I increase my use of technology?
- How can I deliver my products and services in a different way?
- How can I reduce my operational costs?
- Have I reached out to my suppliers and creditors for assistance?
- Have I applied to applicable SBA COVID-19 focused programs?
- What do I want to accomplish in the next 90-days?
It’s Time to Reboot
The main point is that businesses should not look at this pandemic situation as some sort of “miserable and stressful vacation,” but instead as an opportunity to reboot what is not working, and look for ways to make improvements in every aspect of your business. This process begins by asking the right questions and striving to find the answers.
In answering these questions and finding ways to help boost your rates of survival, you should turn to every asset at your disposal. Why not ask your management team as well as all of your employees for ideas that could help their business? Everyone should understand that owners are looking for ways to keep their business healthy while navigating the pandemic.
Now is the time for reflection, short-term and long-term planning, and tangible actions. Business owners should also consult with a range of business professionals, including, of course, business brokers and M&A Advisors. Brokers are uniquely positioned to help business owners through this crisis.
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