Does your business have curb appeal?

Does your business have curb appeal?

Does your business have curb appeal?

Be ready for Prospective Buyers and Due Diligence by maximizing Business Appeal

I recently visited one of the original occupants in an industrial park started in the 1960s in St. Louis county. Weeds and little trees had sprouted from where the parking lot pavement met the foundation and the exterior showed signs of neglect. Walking thought the front door into the office was like going back to 1960: WWII metal desks lined up in military fashion, metal file cabinets and a tile floor with junk everywhere.

The plant floor was even worse.
A dimly lit space of multiple rooms housing running equipment positioned in no particular order, with inventory and work-in-process everywhere. The 75 employees looked like they were only there to spend their time, collect their pay and go home. They just didn’t care.

My first impression from this lack of business curb appeal was “this place has big problems” including health and safety, high employee turnover, sub-standard productivity, and increased costs for insurance, overtime, and materials – and that’s just the tip of the iceberg.

Would you buy a company like this?

Like your house, your business immediately projects an image to potential buyers. The business’ “curb appeal” can attract a buyer to your business—or cause them to walk (or run) away without further investigation.

Take some time to work on your business in addition to working in your business.

Here’s a 3-step plan to improve your business appeal:

1. Fix your “leaky faucets” – Think like a buyer, display that you care

Buyers need a productive environment that focuses on employee safety and moral. Owners who are singularly focused on working “in” their business may not see how the plant, equipment and policies have disintegrated over the years:

  • Clean up the exterior of the facility.
  • Clean up and clean out old unused equipment and inventory.
  •  Improve lighting; open up floor space; maximize product, labor and information flow.
  • Educate your employees regarding expectations and how to work while maintaining a clean, safe environment.
  • Hold everyone accountable for maintaining the system.

2. Assemble your binder

  • Written HR Policy and Procedures; Employee Handbook.
  • Step-by-step documentation of policies and procedures from taking an order or first encounter to final delivery of the product or service.

When you buy a house, you feel more confident if the owner provides the instruction manuals and purchase information for appliances and systems and records of who has performed service calls. Similarly, a potential buyer looking at your company wants to see that your business information is in order.

Document your HR policy and procedures, as well as your process. Buyer interest increases with assurance that a company has taken the steps necessary to inform employees of the rules and expectations. Documentation also promotes consistency, repeatability and accountability.

Documenting your procedures, core processes, and other intellectual capital can help you attract more bidders and a higher price for your company, while also lowering the chance of the deal falling apart during due diligence.

3. Document your intangibles

Intangibles considered when buying a house might include being in a good school district or neighborhood characteristics. Your business appeal also includes intangible assets (often intellectual) that a potential buyer needs to be aware of such as:

  • The reason for your success – the company’s unique value proposition
  • Proprietary operating systems
  • Patents, secret recipes

Don’t wait until you’re ready to sell your business to improve your business appeal.

Not only will you avoid a huge to-do list later, you may be surprised at the increased morale and productivity that you uncover.

 

Sell a Business checklistClick here for a Checklist of the items Metro asks business owners for when they list their business for sale with us…it’s never too early to make sure these items are up to date.

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