Thinking Vs. Doing: The Owner’s Dilemma

There’s a steady breeze from the northwest, which cools the warm Caribbean afternoon. Framed between a palm tree and the turquoise water, you notice a man reading. He appears to be working, which seems strange given his appearance: shaggy blonde hair, linen shirt, surf shorts and flip-flops.

You squint and realize the man is Richard Branson and he just happens to be running Virgin Group Ltd., a multibillion-dollar conglomerate. He is working where he usually does, at Necker Island, a 74-acre retreat he owns in the British Virgin Islands.

Branson, of course, is far from a negligent founder, he has managers running the various businesses that make up the Virgin Group and visits his companies regularly, but he does not manage the day-to-day operations of any of his businesses, which frees up his time to think.

The train conductor vs. the thinker

Your role as a CEO/owner can be divided into two buckets: one for managing and the other for thinking.

The managing bucket is where, metaphorically speaking, you ensure the trains all run on time. In this role, you’re establishing goals for your employees and holding them accountable for achieving their targets. You’re making sure your products and services are of a high quality and that your biggest customers are happy.

When you’re wearing your manager hat, you’re scouring your company looking for small enhancements every day. This obsession with continuous improvement is what big companies call “six-sigma thinking,” but you probably just think of it as building a great company.

The other bucket is reserved for thinking and it’s where you create the future of your company. In this visionary time, you get to design new products, imagine new ways of serving customers, or contemplate where you could take your business in the years ahead. 

Your visionary hours are spent dreaming and imaging what your business could be, instead of worrying about what it is today.

The most valuable companies

The question is, how much of your time should you devote to each role? If your goal is to create a more valuable business—one that someone might like to buy one day—our data reveals that you should start gradually increasing the time you spend on thinking and hire someone else to do the managing.

Studies have shown that companies of owners who know each of their customers by first name (i.e., managers) trade at just 2.9 times their pre-tax profit, whereas the companies of owners who do not know their customers’ first names (i.e., thinkers) trade at closer to 5 times pre-tax profit.

Further, companies that would suffer if their owners were unable to come to work for three months, receive significantly lower offers when compared to companies that would not feel the absence of the owner for a month or two.

Finally, in a recent survey of merger and acquisition (M&A) professionals, we asked who they like to see an owner hire if they can only afford one “C-level” executive. The M&A professionals overwhelmingly identified a general manager/second-in-command as the most important role a founder can fill ahead of a chief revenue, marketing or financial officer.

In short, the owners of the most valuable businesses have found managers to ensure the trains run on time while they spend an increasing amount of their energy thinking about what’s next for their business.

If you are interested in getting a free preliminary business valuation estimate of what your business is worth call our office at 904.739.-0200 or start your free evaluation right away by Clicking Here

Steve Goranson has owned and operated the Northeast Florida of ActionCOACH since 2014. ActionCOACH is the World's #1 Coaching franchise with of 1000 offices in 50 different countries. They coach over 15,000 business each week.

Steve's commitment is to assist small business owners, to spend less time working "in" their business and more time working "on" their business so they can build a more valuable and sellable business. In the end, you’ll be spending less total time working, will be making more money and will have truly created the company and team you always dreamed of. In addition we will help you put the FUN back in your business and your life.


If you would like to learn more about how you too can get an "actionable" business education to improve your business's operations, sales,& bottom line contact ActionCOACH Steve Goranson to schedule a free 1/2 hour Phone Strategy Session  at 904-739-0200. www.actioncoachjax.com

Employee Engagement is the New Leadership

Our 6th President John Quincy Adams once said that if your actions inspire others to dream more, learn more, do more and become more, you are a leader.  

Those are powerful words.  Notice that he didn’t say dream or learn or do, he used the word "and".  Another sign of a good leader is one who can create leaders.  For any business, this is the first step toward creating a more valuable and sellable business.  

Good leadership develops an engaged team.  Today employee engagement is the new leadership.  Employee Engagement is the emotional commitment the employee has to the organization and its goals. Without developing engaged employees, you’re trying to move your business forward with an anchor hanging out the back.  

How much is employee disengagement costing your organization?   Here are 5 anchors of poor employee engagement that are costing your business growth, profitability, and your free time.

1. Poor Employee Engagement Creates a “ME” Culture.  Instead of working together towards the company’s common goals each employee is looking out for their own best interest.  You hear “it’s not my job” a lot and you get a lot of finger pointing.  They lose the perspective that when we work together as a team we all can achieve more: Together Everyone Achieves More.
2. Poor Employee Engagement Creates Wasted Time  When employees are not fully engaged they are not helping the company move forward.  They are doing things the way they think is best instead of looking out for what is in the best interest of the organization and what you strategically decided is best.  Without being focused on the company’s common goals, you get a lot of chaos and frustration which causes a lot of wasted time and money.
3. Poor Employee Engagement Creates More Missed Work
   When employees are working in an environment of chaos and frustration it takes toll on one’s personal energy and health.  This additional stress causes us to not get to work on time, to take more breaks, to leave early or just take unplanned days off.  This consistent interruption of work flow causes loss of productivity and profits
4. Poor Employee Engagement Creates Poor Quality of Work  If your employees don’t have their heart into it, they lose focus, they make mistakes and quality of output suffers.  The cost of this is enormous; loss of customers, wasting time doing work over, more overtime to cover the extra work involved, and increases in COGS.  These are the small hidden holes in your business that is sinking your ship and you don’t even realize it.
5. Poor Employee Engagement Creates Higher Employee Turnover  Good employees are looking for worthwhile work.. They want to be part of something big.  It’s hard to get motivated and engaged when you just feel that you are just a clog in a wheel.  The way to keep good employees is not always about the money

You can’t train employee engagement but the first step is to determine how engaged your employees are.  

Take our free employee engagement survey.  We will send an anonymous survey to your employees and provide you with a free employee engagement report.    

To sign up for your free employee engagement survey and report. 

CLICK HERE NOW!

If you would like to learn more about you too can get an "actionable" business education to improve your business's operations, sales,& bottom line contact ActionCOACH Steve Goranson at 904-739-0200. www.actioncoachjax.com

Steve Goranson has owned and operated the Northeast Florida of ActionCOACH since 2014. ActionCOACH is the World's #1 Coaching franchise with of 1000 offices in 50 different countries. They coach over 15,000 business each week.

Steve's commitment is to assist small business owners, to spend less time working "in" their business and more time working "on" their business so they can build a more valuable and sellable business. In the end, you’ll be spending less total time working, will be making more money and will have truly created the company and team you always dreamed of. In addition we will help you put the FUN back in your business and your life.

Call his office to schedule a free 1/2 hour Phone Strategy Session 904-739-0200

Six Power Ratios to Start Tracking Now

Doctors in the developing world measure their progress not by the aggregate number of children who die in childbirth, but by the infant mortality rate – a ratio of the number of births to deaths.

Similarly, baseball’s leadoff batters measure their “on-base percentage” – the number of times they get on base – as a percentage of the number of times they get the chance to try.

Entrepreneurs buying businesses also like tracking ratios, and the more ratios you can provide a potential buyer, the more comfortable they will become with the idea of buying your business.

Better than the blunt measuring stick of an aggregate number, a ratio expresses the relationship between two numbers, which gives them their power.

If you’re planning to sell your company one day, here’s a list of six ratios to track in your business now to use in creating a score card for potential buyers:

1.      Employees per square foot

By calculating the number of square feet of office space you rent and dividing it by the number of employees you have, you can judge how efficiently you have designed your space. Commercial real estate agents use a general rule of 175–250 square feet of usable office space per employee.

2. Ratio of promoters and detractors

Fred Reichheld and his colleagues at Bain & Company and Satmetrix developed the Net Promoter Score^® methodology.  It is based on asking customers a single question that is predictive of both repurchase and referral.

Here’s how it works: survey your customers and ask them the question, “On a scale of 0 to 10, how likely are you to recommend <insert your company name> to a friend or colleague?”

Figure out what percentage of the people surveyed give you a 9 or 10, and label that your ratio of “promoters.” Calculate your ratio of detractors by figuring out the percentage of people surveyed who gave you a score of 0 to 6. Then calculate your Net Promoter Score

The average company in the United States has a NPS of between 10 and 15 percent.  Reichheld found companies with an above-average NPS grow faster than average-scoring businesses. 

3. Sales per square foot

By measuring your annual sales per square foot, you can get a sense of how efficiently you are translating your real estate into sales. Most industry associations have a benchmark. For example, annual sales per square foot for a respectable retailer might be $300. With real estate usually ranking just behind payroll as a business’s largest expenses, the more sales you can generate per square foot of real estate, the more profitable you are likely to be.

4. Revenue per employee

Payroll is the number one expense for most businesses, which explains why maximizing your revenue per employee, can translate quickly to the bottom line. Google, for example, enjoyed a revenue per employee of more than one million dollars in 2015, whereas a more traditional people-dependent company may struggle to surpass $100,000 per employee.   

5. Customers per account manager

How many customers do you ask your account managers to manage? Finding a balance can be tricky. Some bankers are forced to juggle more than 400 accounts, and therefore do not know each of their customers, whereas some high-end wealth managers may have just 50 clients to stay in contact with. It’s hard to say what the right ratio is because it is so highly dependent on your industry. Slowly increase your ratio of customers per account manager until you see the first signs of deterioration (slowing sales, drop in customer satisfaction). That’s when you know you have probably pushed it a little too far.

6. Prospects per visitor

What proportion of your website’s visitors “opt-in” by giving you permission to e-mail them in the future? Dr. Karl Blanks and Ben Jesson are the cofounders of Conversion Rate Experts, which advises companies like Google, Apple and Sony on how to convert more of their website traffic into customers. Dr. Blanks and Mr. Jesson state that there is no such thing as a typical opt-in rate, because so much depends on the source of traffic. They recommend that rather than benchmarking yourself against a competitor, you benchmark against yourself by carrying out tests to beat your site’s current opt-in rate.

Entrepreneurs looking to purchase a business have a healthy appetite for data. The more data you can give them – in the ratio format they’re used to examining – the more attractive your business will be in their eyes.

Interested in learning how to create a score card in your business that will help you to predict not only the direction your business is going but how valuable it is to potential buyers? 

Contact ActionCOACH Steve Goranson to schedule a free 1/2 hour Phone Strategy Session at 904-739-0200.

Steve Goranson has owned and operated the Northeast Florida of ActionCOACH since 2004.  ActionCOACH is the World's #1 Coaching franchise with over 1000 offices in 50 different countries. They coach over 15,000 business each week worldwide.

Steve's commitment is to help small business owners to develop actionable ideas that will allow them to spend less time working "in" their business and more time working "on" their business so they can build a more valuable and sellable business. In the end, you’ll be spending less total time working, will be making more money and will have truly created the company and team you always dreamed of. In addition we will help you put the FUN back in your business and your life.

Call his office to schedule a free 1/2 hour Phone Strategy Session 904-739-0200 www.actioncoachsteve.com

90 Days That Will Define Your Business Forever

You've done the hard work of winning a new customer, but it's what you do in the next 90 days that determines if it'll stick around.

The first 90 days of any new relationship are critical:

• A president has about three months to inspire the electorate and gain the political capital he needs to govern.
• A young team prospect has but a few months to impress his coach before being sent down to the minors.
• A new CEO has 90 days to learn her job before the rank and file start expecting tangible leadership.

The Onboarding Window: The First 90 Days
For a young company, the first 90 days of a customer relationship are equally important. Research into the subscription business model shows that getting a customer to effectively start using your product in the first 90 days leads to an increase in lifetime value of up to 300 percent for some companies.

Take a look at marketing software provider Constant Contact, which used to struggle with the first 90 days of a new customer relationship.

In the old days, Constant Contact took a "who, what, when" approach to onboarding new customers. Who stood for who a customer wanted to send an email campaign to; what stood for what the customer wanted to send; and when described the timing of the campaign.

After users signed up for its service, Constant Contact would ask customers to upload their email database (the who in the three-step onboarding process). This required the new user to upload a customer list--which is the trickiest part of the onboarding experience. It required the customer to leave Constant Contact's site and struggle with how to export a contact list--often from a jury-rigged database kept in Excel or Outlook.

The process was awkward, and many new customers stopped using Constant Contact because they hit a barrier before they had a chance to fall in love with the Constant Contact software.

What, Who, When
Wanting to stem new customer churn, Constant Contact changed its on boarding to focus first on the what. Immediately after signing up, new users were encouraged to create their first email campaign. Suddenly customers were seeing their campaign come to life in front of their eyes.

Constant Contact offered customers a library of stock images that looked more beautiful than anything a business owner had used in the past. Customers could see firsthand how professional their company was going to look.

Only after the customer had completed the what stage and earned the emotional reward of seeing its first campaign come to life, did Constant Contact switch to the who part of creating a campaign.

The difference was, by this point, Constant Contact had enough relationship equity with the customer to get it over the hump of uploading its database. This minor reordering of the onboarding flow led to a dramatic reduction in customer churn--which is the death knell of any subscription business.

Whether you’re in a subscription business, or still using a transaction business model, how you treat a customer in the first 90 days will go a long way in determining their overall satisfaction.

If you would like to learn more about team building contact ActionCOACH Steve Goranson at 904-739-0200. www.actioncoachsteve.com

Steve Goranson has owned and operated the Northeast Florida of ActionCOACH since 2014.  ActionCOACH is the World's #1 Coaching franchise with of 1000 offices in 50 different countries. They coach over 15,000 business each week.

Steve's commitment is to assist small business owners, to spend less time working "in" their business and more time working "on" their business so they can build a more valuable and sellable business. In the end, you’ll be spending less total time working, will be making more money and will have truly created the company and team you always dreamed of. In addition we will help you put the FUN back in your business and your life

Call his office to schedule a free 1/2 hour Phone Strategy Session 904-739-0200

How to Get Rich in 3 (Really Difficult) Steps

Becoming wealthy may not be your primary goal, but if it is, there is a reasonably predictable way to get rich in America.

Step 1: Ignore Your Parents

Parents around the world typically encourage their kids to get educated so they can get a ‘good job.’ This may mean becoming a doctor or lawyer, although neither tends to be a path to significant wealth. High-paying professions provide an excellent income stream, but two insidious forces undermine the professional's ability to create significant wealth: tax and spending.

Tax

It is difficult to become wealthy on the basis of a salary alone. Since income is taxed at the highest possible rate, you're left with not much more than 50 cents on the dollar.

Spending

The other problem with having a high income is that it creates a ‘wealth effect’ that triggers spending. Thomas J. Stanley, the famous author of the research-driven classic The Millionaire Next Door, points out that some professionals—in particular, lawyers—spend a large portion of their income to give the impression that they are successful, in part because they do not enjoy much social status from their job. In other words, when you earn $500,000 a year, you buy a Range Rover or send your kids to an elite private school at least in part because you want people to think you are wealthy.

Step 2: Start Something

Most wealth in America is created through owning a business. Recently, Mass Mutual looked at the proportion of business owners that make up a number of wealth cohorts. They found that 17 percent of people with between $100,000 and $500,000 to invest were business owners.

Keep in mind that there are about 8 million employer-based companies in the United States, meaning that the incidence rate of business ownership (the natural rate at which you find business owners in the general population) is about three percent. Said another way, if you grabbed 100 people walking down the street, on average three of them would be business owners. On the other hand, if you took a random sample of 100 people with investable assets of between $100,000 and $500,000, 17 of them would be business owners, meaning you're over five times more likely to find a business owner in the $100,000 to $500,000 wealth segment than you are to find an employee in the same segment.

The trend becomes more pronounced the higher up the wealth ladder you go. If you look at wealthy investors with between $500,000 and $1,000,000 in investable assets, you'll see that the proportion of business owners in this segment goes up dramatically—to27 percent.

The Very Rich

Among investors with between $1 million and $10 million in investable assets, the proportion of business owners jumps to 52 percent. As for those investors with $10 million to $50 million sloshing around in their bank account, 67 percent are business owners; and for investors with $50 million dollars or more in investable assets, 86 percent are business owners.

Simply put, if you meet someone who is very rich, it's highly likely they are (or were) a business owner.

Step 3: Get Liquid

The next step for you as a business owner is to focus on improving the value of your business so that you can sell it for a premium. Just being a successful entrepreneur is typically not enough to become rich. You have to find a way to take the equity you have locked up in your business and turn it into liquid assets. When it comes to selling your business, the three most common options are:

·         Acquisition: This is the headline-popping way some entrepreneurs choose to trade their shares for cash. When Facebook acquired WhatsApp for $19 billion, founders Brian Action and Jan Koum got very rich.

·         Re-capitalization: A minority or majority "re-cap" occurs when you sell a stake in your company (often to a private equity firm) yet continue to run your business as both a manager and part owner, with a chunk of your wealth in liquid assets outside of your business.

·         Management Buyout: In an MBO, you invite your management team (or a family member) to buy you out over time, usually with a mixture of some cash from the profits of your business as well as debt that the managers take on. There are other, less common ways to turn your equity into cash (e.g., an IPO), but the key is turning the illiquid wealth in your business into diversified liquid wealth. The best part about selling a business is that the wealth created is taxed at a very low rate compared to employment income, so you get to keep most of what you make.

You might argue it is better to keep all of your wealth tied up in your business as it grows, but that can be a risky proposition—just ask Lululemon's Chip Wilson or BlackBerry's cofounder Mike Lazaridis. If you keep your money locked up in your business, it also means you may not be able to enjoy the benefits of wealth. You can't use illiquid stock in a private company to buy an around-the-world plane ticket or a ski chalet in Aspen. You actually have to get liquid first.

There are many good reasons to build a business; and for you, wealth creation may not be as important as making an amazing product or leading a great team. But if money is what you're after, there is no better way to get rich than to start and sell a successful business.

In creating a more valuable business, it is always the little things that get the big results. Our Business Health Check will give you invaluable insights into the many areas of your business that if tweaked will increase the value of your business.  By completing the Business Health Check, you will receive a Free Report based on your answers, prepared by our team of highly skilled Business Coaches.  CLICK HERE to take your Business Health Check Now

Steve Goranson has owned and operated the Northeast Florida of ActionCOACH since 2014. ActionCOACH is the World's #1 Coaching franchise with of 1000 offices in 50 different countries.  They coach over 15,000 business each week.

ActionCOACH Steve Goranson's commitment is to assist small business owners, to spend less time working "in" their business and more time working "on" their business so they can build a more valuable and sellable business. In the end, you’ll be spending less total time working, will be making more money and will have truly created the company and team you always dreamed of. In addition we will help you put the FUN back in your business and your life.

Steve's clients are feeling happy because they are focused on their goals, they're feeling more successful because they are reaching their goals, and they are feeling more free because their businesses are starting to work harder than do. 

4 Keys to Increased Profits & Cash Flow

Every business I speak with wants to increase sales in their business.  Who wouldn’t?  

But increased sales is not necessary for the goal.  We don’t really want more sales, what we really want is more profit, right?  Well not necessarily, because you can’t really do anything with profit.  Profit is just a theory.  The question is how we turn profits into cash. 

To help us understand how to increase our profits and cash flow we must first understand the 4 M’s; Management, Money, Marketing, & Merchandise.

Management:  Properly run companies can sustain profitability over the long run because they are organized and cut wasteful spending.  When business is good the average company doesn’t seem to care where the wastes are in the business because there is enough cash to cover up the waste.  Properly run companies understand that investing in properly trained teams will lead to increased profits and cash flow.  A team who is aligned to company goals and that understands how their specific role and task leads into the company’s “big picture”, will be more effective and efficient.  Since they are aligned to the company’s goals they will be able to recommend ways for the company to be more effective and efficient.

Money:  Money management is a key to all successful business.  That’s both money coming in and out.  The two biggest bottlenecks that prevent profits from turning into cash are inventory and accounts receivables.  Properly run companies are always managing their vendors, looking for better ways to order more efficiently and ways they can negotiate better terms.  Most AR problems arise because issues aren’t addressed until they turn into problems.  Make sure your clients understand and are clear on your payment terms.  Don’t be afraid to ask for your money.  If you don’t, someone will be getting paid before you. 

Marketing:  Even in a tough economy people are spending money on your product or service.  The purpose of your marketing is to help you get your “unfair” share of the dollars being spent.  To do this you have to be very clear on what your clients want and how your product or service can help them achieve that.  Marketing is not just advertising, it’s all about understanding your whole sales process, which turns a lead into a customer that comes back again and again.  By understanding each step of the sales process from lead generation to repeat customer, you can quickly identify the bottlenecks and implement strategies to move them to the next step.

Merchandise:  If sales are down, you need to see if people are using your product in the same way as before.  In the past, people might have been using your product or service out of ego, price, or having a particular item, that might not be the case now.  Maybe now your product or service could be used in a different way that your customer hasn’t even thought of.   Successful companies are always asking themselves why people are buying their product or service.  Additionally, make sure your team understands which products are your most profitable.  Just adding some extra attention to your most profitable items can easily increase your overall profit margins.

In creating a more valuable business, it is always the little things that get the big results. Our Business Health Check will give you invaluable insights into the many areas of your business that if tweaked will increase the value of your business.

By completing the Business Health Check, you will receive a Free Report based on your answers, prepared by our team of highly skilled Business Coaches.  CLICK HERE to take your Business Health Check Now

Business Advice: Become an Agent of Change

How do you affect change in your life and in the life of others?  By following ActionCOACH's simple formula of change you can truly become an agent of change in your life as well as the life of others and take your business to the next level.





Check out this short video where I discuss how to become an agent of change.

In business, it is always the little things that get the big results. Our Business Health Check will give you invaluable insights into the many areas of your business. By completing the Business Health Check, you will receive a Free Report based on your answers. CLICK HERE to take your Business Health Check

Business Advice: 6 Reasons Not To Diversify

Diversification is a sound financial planning strategy, but does it work for company building?

How does Vitamix get away with charging $700 for a blender when reputable companies like Cuisinart and Breville make blenders for less than half the price?  It’s because Vitamix does just one thing, and they do it better than anyone else.  

WhatsApp was just a messaging platform before Facebook acquired them for $19 billion US. Go Pro makes the best helmet mounted video cameras in the world. These companies stand out because they poured all of their limited resources into one big bet.

The typical business school of thought is to diversify and cross sell your way to a “safe” business with a balanced portfolio of products – so when one product category tanks, another line of your business will hopefully boom.  But the problem with selling too many things – especially for a young company – is that you water down everything you do to the point of mediocrity. 

Here are 6 reasons to stop being a jack-of-all-trades and start specializing in doing one thing better than anyone else:

1. It will increase the value of your business  -- When you sell one thing, you can differentiate yourself by pouring all of your marketing dollars into setting your one product apart, which will boost your company’s value. How do we know? After analyzing more than 13,000 businesses using The Sellability Score, we found companies that have a monopoly on what they sell get acquisition offers that are 42 percent higher than the average business
2. You can create a brand  -- Big multinationals can dump millions into each of their brands, which enable them to sell more than one thing. Kellogg can own the Corn Flakes brand and also peddle Pringles because they have enough cash to support both brands independently, but with every new product comes a dilution of your marketing dollars. It’s hard enough for a start-up to build one household name and virtually impossible to create two without gobs of equity-diluting outside money.
3. You’ll be findable on Google  --  When you Google “helmet camera,” Go Pro is featured in just about every listing, despite the fact that there are hundreds of video camera manufacturers. It’s easy for Go Pro to optimize their website for the keywords that matter when they are focused on selling only one product.
4. Nobody cheered for Goliath  --  Small companies with the courage to make a single bet get a bump in popularity because we’re naturally inclined to want the underdog – willing to bet it all – to win. When Google launched its simple search engine with its endearing two search choices “I’m feeling lucky” vs. “Google search,” we all kicked Yahoo to the curb. Now that Google is all grown up and offering all sorts of stuff, we respect them as a company but do we love them quite as much?
5. Every staff member will be able to deliver  --  When you do one thing, you can train your staff to execute, unlike when you offer dozens or hundreds of products and services that go well beyond the competence level of your junior staff. Having employees who can deliver means you can let them get on with their work, freeing up your time to think more about the big picture.
6. It will make you irresistible to an acquirer  --  The more you specialize in a single product, the more you will be attractive to an acquirer when the time comes to sell your business. Acquirers buy things they cannot easily replicate themselves. Go Pro (NASDAQ: GPRO) is rumored to be a takeover target for a consumer electronics manufacturer or a content company that wants a beachhead in the action sports video market. Most consumer electronics companies could manufacturer their own helmet mounted cameras, but Go Pro is so far out in front of their competitors – they are the #1 brand channel on You Tube – that it would be easier to just buy the company rather than trying to claw market share away from a leader with such a dominant head start.

Diversification is a great approach for your stock portfolio, but when it comes to your business, it may be a sure-fire road to mediocrity.

A Blood Pressure Test for Your Business

Taking your blood pressure is one of the first things most doctors do before treating you for just about anything. 

How much pressure your blood is under as it courses through your veins is a reliable indicator of your overall health; and it can be an early indicator of everything from heart disease to bad circulation.

Does it tell the doctor everything they need to know about your health? Of course not, but one powerful little ratio can give the doctor a pretty good sense of your overall well being.

A tool I use to help businesses take the blood pressure of their business is the Sellability Score.  

Your Sellability Score can be a handy indicator of your company’s well being. Like your blood pressure reading, your company’s Sellability Score is an amalgam of a number of different factors and can help a professional quickly diagnose your company’s overall health.

Predicting Good Outcomes Too

When a doctor takes your blood pressure, they not only rule out possible nasty ailments; they can also use the pressure reading to forecast a healthy life ahead. Similarly, your Sellability Score can predict good things for the future. 

For example, based on more than 10,000 business owners who have completed their Sellability Score questionnaire, we know the average multiple of pre-tax profit they are offered for their business when it is time to sell is 3.7. By contrast, those companies that have achieved a Sellability Score of 80+ are getting offers of 6.6 times pre-tax profit.

In other words, if you have an average-performing business turning out $500,000 in pre-tax profit, it is likely worth around $1,850,000 ($500,000 x 3.7). If the same company improved its Sellability Score to 80+ while maintaining its profitability of $500,000, it would be worth closer to $3,300,000 ($500,000 x 6.6).

Are you guaranteed to fetch 6.6 times pre-tax profit if you improve your Sellability Score to 80? Of course not. But just like blood pressure, one little number can tell you and your advisor a whole lot about how well you are doing; and your advisor can then prescribe an action plan to start maximizing your company’s health – and its value down the road.

Heart disease is called “The Silent Killer” because most people have no idea what their blood pressure is. People can walk around for years with dangerously high blood pressure because they haven’t bothered to get it tested. 

The first step on the road to health is to get tested. If you have a great score, you can sleep well at night knowing you have one less thing to worry about. If your score is not where it should be, then at least knowing your performance can get you started down the road to better health.

If you’re interested in getting your Sellability Score, please visit http://actioncoachsellabilityscore.com/

5 Ways To Attract The Attention Of a Buyer for Your Business

In any negotiation, being the person who makes the first move usually puts you at a slight disadvantage. The first-mover tips their hand and reveals just how much he/she wants the asset being negotiated.

Likewise, when considering the sale of your business, it is always nice to be courted, rather than being the one doing the courting. The good news is, the chances of getting an unsolicited offer from someone wanting to buy your business are actually increasing.

According to the Q2, 2014 Sellability Tracker analysis released in July 2014, 16% of business owners have received an offer in the last year, which is up 37% over Q1. Said another way, you’re 37% more likely to get an offer to buy your business today than you were at the beginning of the year.

Big companies are buying little ones for a lot of reasons and the current market conditions are accelerating their appetite: interest rates are low and stock markets are high, which provide the ideal platform for acquirers to realize a return on their investment from buying a business like yours.

So how do you ensure you are on their shopping list? 

Here are five ways to get noticed by an acquirer:

1. Win an award

Getting recognized as the “Widget Maker of the Year” by the Widget Makers Association is a great way to get the attention of acquirers in your industry.

2. Hire a PR person

Engaging a public relations professional to tell your story to the media can get you on the radar of buyers in your industry.  A lot of media relations professionals focus on the big mainstream publications, and while these are important, ensure that your PR firm also targets trade publication and industry-specific websites that are read by acquirers in your industry.

3. Host an event

 Consider hosting an event (e.g., conference, tradeshow, summit) for your industry and invite representatives from potential acquirers to attend. Being invited to an industry event can be flattering for acquirers and it is a good way to get them to notice you as an industry leader.

4. Join a board

If an executive from a company you think would make a natural buyer for your business is serving on a board of directors, consider joining the board. Serving on a board together can be a great way for an acquirer to notice you and your company without you having to say you’re for sale.

5. Grab lunch

Consider inviting a senior executive from a potential acquirer to share a meal under the guise of discussing trends in your industry. At the very least, you may glean some useful information about how big companies are seeing your industry evolve. At best, your lunch mate may realize that your company could play a key role in helping them grow.

The sale of your business is a delicate dance where it is usually better to be the courted, rather than the courter. Acquirers are on the hunt for new businesses, and having them notice you will put you in a position of strength when you get to sit down at the negotiation table.  

To determine the Sellability of your business find our your Sellability Score.  Get a free report  identifying how sellable your business is now the 8 areas you need to focus on to increase your business value now.  Click Here to learn more.

6 Ways to Profit from Your Vacation this Summer

Summer is here, and although it may seem strange, now may be the perfect time to increase the value of your

company.

The most valuable businesses are the ones that can survive without their owner. A buyer will pay a premium for a company that runs on autopilot and levy a steep discount for a business that is dependent on its owner.

This summer, consider taking an extended break from your business to see how things will run when you’re not in the building.  It’s likely that some things will go wrong, but use those errors as the raw material for making your business operate more independently of you – and therefore more valuable. 

Here is a 6-Step plan for profiting from your vacation time this summer:

Step 1: Schedule your vacation plus one day

Whatever day you plan to start working again after your holiday, tell your staff you’ll be back one day later. That way, you’ll have a full day of uninterrupted time to dedicate to understanding what went wrong in your absence.

Step 2: Bucket the mistakes

When you return, make a summary of the things that went wrong and categorize them into one of three buckets

 Mistakes: errors where there is a right and wrong answer;
Bottlenecks: projects that had difficulties because you weren’t there to provide your feedback;
Stalled Projects: initiatives that went nowhere while you were gone because you’re the person leading them.

Step 3: Correct the mistakes

The first and easiest place to start is to simply correct the mistakes that were made. Usually mistakes are due to a lack of training rather than outright negligence. The right answer may be crystal clear in your head but not immediately obvious to your staff. Write up some instructions for next time the employees face the same situation. Make sure your instructions are clear, and share them with your team so everyone has them (a file sharing service like Google Drive or DropBox can be a helpful repository for your instructions).

Step 4: Unblock your bottlenecks

If you’re being asked for your personal input on projects, there’s probably going to be a bottleneck if you’re not around. Make sure your staff is clear on the projects where you need to have a say and the projects where you don’t. Some employees may wrongly think that you need to approve all decisions. Make it clear when you want them to act alone and when you still need to have a say.

Step 5:  Re-assign stalled projects

The hardest part of making your business less dependent on you is dealing with projects that get stalled when you’re away. Start by asking yourself if you’re the right person to lead the project in the first place. As the owner of your business, projects often fall in your lap by default, rather than because you’re the best person to lead them. Categorize your stalled projects into two groups: a) strategic projects you need to lead; and b) non-strategic projects you are leading by default. Hang on to the strategic projects, but delegate the non-strategic projects to someone on your team who is better suited to drive them forward.

Step 6: Give every employee a blank check

At Ritz Carlton Hotels, they give every employee discretion to spend – without approval from their general manager – up to $2,000 on a guest.  The $2,000 figure is a large enough number to make the message clear: front line employees should act first, make the customer happy, and ask questions later. Many employees know how to make a customer happy but lack the confidence to act. Giving employees some spending authority will speed up the resolution of customer issues and empower your team to do the right thing when you’re not there.

The sunshine is beckoning, so go ahead and take a vacation – if you follow the six steps here, you may end up with a tan and a more valuable company. 

8 ways to know if you have a job or own a business

The ultimate test of your business can be found in a simple question: would someone want to buy your company?

Whether you want to sell next year or a decade from now, you must be building an asset someone would buy – otherwise, you have a job, not a business.

Here are eight ways to ensure you are building a company, not just doing a job:

1. A job requires that you show up at work to make money, whereas a company generates revenue whether you are there or not. 
2. If your company is so reliant on a single customer that they can dictate how you deliver your product or service, your company is more like a job than a valuable business. 
3. A job is a place where your personal reputation impacts your results, whereas a company is a place where the brand is more important than the personality of the founder(s)
4. A job requires you to use your personal experience and expertise to get a result, whereas a company is a place where a process – not a person – consistently produces a desirable result. 
5. In a job, you get fired for taking too much vacation, whereas if you own a company, the more vacation you can take without impacting your company’s performance, the more valuable your business will be.
6. In a job, the harder you work, the more money you earn. In a company, the smarter you work, the more money you earn.
7. In a job, you solve the problems. If you own a company, your employees solve the problems.
8. If the majority of your customers know your mobile phone number, it’s likely you have a job, not a company. 

If you’re not sure whether you have a job or own a business, it’s time to get your Sellability Score. 

Whether you want to sell now or in a decade, the Sellability Score assessment allows you to see your business as a buyer would see it, and to identify how you perform on each of the eight key drivers of sellability. 

The questionnaire takes about 13 minutes to complete, and after you’re finished you’ll get a customized 27-page report outlining how you performed and where you could improve the value and sellability of your company. Get your score now....  www.actioncoachsellabilityscore.com