I recently sold my accreditation and coaching business for an eight-figure sum. It took me 16 years to build the business and whilst it was a hugely exhilarating journey, there were several things I could have done that would have got me to where I was going a lot quicker. Here are the top six tips I would do differently next time:
Think like an owner
To grow your business, you must shift from acting like a technician to thinking like an owner. This transition will push you to confront new responsibilities, but if you truly desire business growth, you must step away from the day-to-day management of the business, and change the way you operate.
Create systems
You need to move from delivering the service to building the business. You’ll need to let go of what you are good at, the thing that made you successful, and create a system so that others can do it just as, or almost, as well as you. This will free you up so you can focus on the more important activities that will grow the business.
Make a list of what you don’t like doing
Hiring your first team member should be a cause for celebration. It’s the moment when you can delegate the tasks you don’t like doing. It could be setting up systems, writing content, or making sales calls. Whatever it is, identify it and get someone to do it so that you can focus on the bigger picture.
Think big, think long
It takes around seven to 10 years to scale and sell a successful business, so if you were looking for a get-rich-quick tip, you won’t get it from me. With that time frame in mind, think about how much you want to sell your business for, who a likely buyer would be, and how your business will be valued. Start with the end in mind, get excited about that number and it will create the passion and energy you need to achieve it.
Understand multiples
Business buyers use a range of multiples to value a business. The fundamental rationale behind multiples-based valuation is that businesses in the same industry should be valued based on their comparison to other similar businesses. For example, a professional services business with an EBITDA of $1 million, with a multiple of between five and 12 times, would likely be valued between $5 million and $12 million.
The table below summarises the approximate multiples across a range of sectors:
- Professional Services 5-12x
- Financial 7-12x
- Food processing 5-10x
- Education 5-12x
- IT and Digital 6-14x
- Energy, Power and Utilities 6-10x
- Transport and Logistics 5-10x
- Healthcare 6-14x
- Tourism 5-12x.
Create your ‘Book of 50’
When I left my business in the hands of my team to take a three-month holiday, I bought a hard-cover notebook. I wrote down everything the team needed to do whilst I was gone. It had around 50 things in it. That book became my ‘Book of 50.’ I date each page, and put a little check-box beside each task and then tick it off when it’s done. Every night, I flick through it and nominate my activities for the next day. I pick the hard stuff; the important things that will get me closer to my goal, and do them first. Whatever gets done after that is a bonus. If you do the right things each day; the things that move you out of the technician zone, your business will grow more rapidly.
If you’d like to step out of the technician zone and into the owner zone so you can build a business others want to buy, try applying these tips to help you get started.
