Book Review – Built to Sell *5 STARS*
Built To Sell by John Warrillow
I rate this book 5 out of 5 stars (I have dog tagged and highlighted so many pages in this book 5 stars just does not give it justice!)
Built to sell by John Warrilow is a fantastic MUST read for business owners looking to sell their business and those currently running a business and/or those just starting up ( I would put it above lean start-up by Eric Ries)
From the start of the book John Puts us in Alex Stapelton’s shoes a business owner of a reasonably successful Stapleton marketing agency. (Reading this book made me think of copywriting agonise the pain then give the solution, as the first 2 chapters agonised the pain we have as business founders, then gave the solution). Alex comes to talk to his friend Ted a successful entrepreneur, who has sold multiple business already and helps Alex Alex experiences what we all experience as owners of service business – over promising and under delivering, going over deadlines, generalise staff instead of specialists and many other common problems that you and I face as business owners.
We join …. on his journey from being a overwhelmed business owner to becoming a systemised, productised business owner selling his business for $5.2 million. The difference between this book and many other “rags to riches” style of books, is it gives you actionable steps that you can implement in your business. It’s practically what I preach to my clients everyday about systems and process and get told to me by my mentors.
Now if you don’t have the time to read the book on your kindle or listen to the book through audible I suggest that you at least read the last chapter which is an implementation guide for how to Build your Business to Sell. There are so many gold nuggets in this book that any business owner could quiet possibly achieve the reason why they started business in the first place freedom.
You will find some gold nuggets around how to reward managers for loyalty and results, how to systemise your business, how to prepare for selling your business and many more.
The key take-aways from this book for me are:
- Build systems and processes and make a business that is not reliant on you
- Create a process manual and keep editing that manual till someone can implement without you watching them to the standard you expect or better.
- Stop being scared of billing clients upfront they are paying for a product not a service (products you need to pay upfront
- Hire 2 sales people to begin (they will compete with each other)
- Hire product based sales people (someone who knows their numbers, scientific selling, should be a fierce competitor wanting to win and disciplined
- Use long term incentive plan to reward managers performance and loyalty to the company. (Give managers targets and corresponding bonus for achieving their personal targets. Pay those bonus at the end of each year and put aside the same bonus in a special pool of funds, which they can only draw out 1/3rd of the pool after 3 years and each year after they are allowed to withdraw another 1/3rd of the pool that way pool grew, if they left they would be walking away from 3 years in the pool).
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(Yes I will get paid if you purchase the book using the links below, so think of it as a thank-you for my awesome notes)
Making You Business Scaleable and Sellable (Takes about 2 to 3 years)
- What projects has the business done that make the most profitability? and has a unique difference from your competitors that they cannot easily replicate?
- Niche down and productise
- How did we go about making those profitable and unique projects a success from quoting the client to completion of the project?
- Find 20 potential clients that would need your niched services (preferably existing clients) and contact them
- Charge upfront (bill the full amount upfront, don’t be scared)
- Make your Business memorable and referable
- Create your step by step instructional manual (keep editing that manual till someone can implement without you watching them to the standard expected)
- Present your new direction and process to your team (use examples e.g Southwest Airlines only use 1 type of plane)
- Check-in on staff every so often to make sure they follow the process
- Your in business to make money first then everything else second, don’t forget that
- Say no to projects outside your expertise (clients will test you to work on projects outside your expertise be ready to say no, so you can be open to projects you excel at)
- Create a business that can work without you
- Hire 2 sales people to begin (they will compete with each other)
- Think about the staff members you need for your new process, and remove those you don’t need. Identify who would be doing each stage of the process
- Hire product based sales people (someone who knows their numbers, scientific selling, should be a fierce competitor wanting to win and disciplined). Service based sales people will try and bend your products to suit the clients needs instead of helping to keep your business productised.
- Cut your clients that don’t fit in with your productised services
- Create a sales statistics dashboard so your sales reps can compete and update their goals
- Set financial, sales and marketing goals and how you are going to achieve them (aim for 25% a year)
- Once you start growing start looking at building a management team
- Align their compensation with the goals of the business
- Use long term incentive plan to reward managers performance and loyalty to the company. (Give managers targets and corresponding bonus for achieving their personal targets. Pay those bonus at the end of each year and put aside the same bonus in a special pool of funds, which they can only draw out 1/3rd of the pool after 3 years and each year after they are allowed to withdraw another 1/3rd of the pool that way pool grew, if they left they would be walking away from 3 years worth of bonuses in the pool).
Don’t offer equity it just gets messy
- If you have excess money look at how you can best invest it to get a good rate of return
- Ensure to keep hiring specialists, not generalists. 1 Specialist is worth the weight of up to 5 generalists
- Do you still want to sell? Write up the pros and cons, make sure that you still want to sell as it is a length and drawn out process.
Selling Your Business Notes (can take 6 to 8 months)
- Make sure to have everything in order that an acquiring company would want
- What’s the market potential in your location and nation wide
- Make your model so well that it’s easy to replicate in other areas like a franchised
- Have a predictable sales formula, where sales people are able to sell
- Have a model for your sales engine and how it works
- Demonstrate that your not the only sales person that can sell (prove a scalable sales model)
- Avoid the 5 year buy out as much as possible (make the business work without you)
- What price are you willing to sell your business for (put in an envelope in a safe place) (how much $$$ would you need to achieve your bucket list)
- Ensure that you have a management team that can keep the business running when your gone
- Get a good broker / advisor who you will be a meaningful account (boutique acquisitions firm – done deals in your industry)
- Choose a broker that is going to represent you and not present you as a gift to their best client.
- Have a 3 year business plan (make sure it’s solid) think like Starbucks when writing your plan. Show how you can be an engine of growth for an acquire
- Imagine you have a blank cheque and unlimited resources (don’t be conservative), what is possible if I had more resources and $$$ (it does not have to be achieved able by just you)
- Stop referring to this years financial as a forecast, refer to projections for this year as current year
- Think big
- Change the name of the clients to customers and agency to business.
- Look to get the interest of a strategic buyer over a financial buyer
- Ensure to keep you eye on the businesses growth even though acquisitions advisor will be taking up most of your time
- 9. Make sure that your business fits into the product acquisitions process not the service acquisitions process. (This is so you get more $$$ upfront and not in a earnout that you need to stay in the business for 6+ months and get your money once the business achieves it’s goals)
- Treat an earn-out as the extra gravy on the deal
- Inform your team of the buyout and what benefits it will bring to the staff
- Career advancements
- Big projects and budgets (prestige)
- Career mobility
- Give them $10,000 as a thank-you (stay bonus) for helping if the business gets acquired only to those that stay (In 6 parts over the next 6 months so they stay on after the acquisition)
- Make sure you have the right answer to “why you want to sell your business”
- A buyer wants to hear you see a future for your business and you want their help to get you too the next level
- Tell them you are proud of what you have achieved so far and that you are at a point where you like to create some liquidity for the value you have created so far
- They need to feel that you will stay on to tap some of the synergies between the 2 businesses
- Get a letter of intent from the company that was to acquire
- Expect due diligence to happen and for them to low ball their original offer
- Record all the figures and how you worked them out
- Expect a grilling from the companies due diligence pit-bull (analytical person) to tear apart the inner workings of your business and question everything (remember only the boss can call him off)
- At 2-3 months it’s time to communicate that they have pushed you as far as they can, they are in jeopardy of losing the deal (spent 2 months of their time and 100’s of hours, so they don’t want to look bad to their boss)
- After the due diligence they will be concerned about specific parts of the business (get them to lay the cards on the table) (If what they said pisses you off open that envelope and read it)
- Engage a good accountant who has experience with succession planning + tax planning strategies
- You can’t be half pregnant – (You can’t do something half way and expect it to work, you need to fully commit)
- If a client had a choice they always want a customized solution to them
- To jive properly you need to pull the till all the way to one side, there is a moment when you feel a little out of control, just before the sail flips sides and starts catching wind on the other side of the turn. You can’t half commit, if you don’t pull the tiller all the way. Towards you, you will never turn the boat and end up in the water. (if you don’t full commit in getting rid of your clients that don’t fit your business model, you are going to end up back in the water, right where you started)
What did you think of this review? Have you read this book? Do you have a book I should read? Leave your Comments below