Building a Turnkey Business
Building a Turnkey Business : In my 18 years of working with small businesses as an accountant, I have come to see the importance of building intangibles in your business.
What are intangibles?
Intangible assets are those assets that you cannot see or touch but yet increase the value of your business. When building a business, you should be thinking of the day you will possibly exit either by transferring ownership to your children or selling your business. No matter how much you love your business there is going to come a time when you want to exit
The time to exit is not the time to start thinking about selling. But now is the time to think about it.
You want a turnkey business so the next person who takes over your business has everything they need to start. To build a turnkey business you will need to build the following:
- A learning organization culture
- Standards and procedures that are interwoven into your business
- A solid financial system
- A solid marketing system
A learning organization culture
The desire to learn is deeply ingrained into the human psychic. The book publishing industry is a 29.5 billion dollar industry. The impulse to learn comes from desire to grow. As humans we instinctively want to better than we were yesterday. The problem most businesses have is how to tap into this inborn desire. It is much easier to leave things the way it has always been done rather than change things for a possibility of a better outcome.
Organizations that integrate learning and growth as part of their organization culture are worth more than ones that do not.
Standards and procedures that are interwoven into your business
One of the power of franchises is the standards and procedures that are interwoven into their business. There is value in training employees to follow a proven system. A potential buyer of your business will appreciate the fact that they do not have to re-invent the wheels.
Standards help to keep consistency in the transition of employees.
A solid financial system
I can never over emphasize the importance of knowing your numbers. To accomplish this you need a good financial system in place. Like anything else, when you put garbage into your financial system, you get garbage out. You need a reliable system to accurately organize all the transactions that take place in your system so you can produce meaningful financial statements. Your financial statements should be reviewed at regular intervals as means of directing the actions needed in your business.
Having a solid financial system increases the value of your business to a potential buyer.
A solid marketing system
Finally, no business is worth anything without customers. You need a system of attracting and retaining customers. The better your system, the more valuable your system will be.