“All this business needs to grow is marketing. I just haven’t been able to afford it.” Though I recently heard this comment from Tom (not his real name), I have heard the same comment dozens, 或者上百个, 次.
汤姆打电话向我征求意见 how to sell his Nashville-based business. Though just in his early 60s (which doesn’t seem old to me now…), Tom was tired and ready to retire. The business almost collapsed during the 2009-2010 recession but had stabilized in recent years. 汤姆解释说,“The rebuild process was slower and harder than I anticipated. 但, I got two kids through college while we were getting the business back on track, so I guess I was doing a few things right.”
Tom and I were discussing the process to sell his company. I explained that the starting point of a successful transaction is a memorandum explaining the company’s history, 金融类股, 组织与成长计划. I told him potential buyers also need to see a plan for growth. And when I say a plan for growth, 我指的是特定的, tangible and believable plan to bring in new customers. That’s when Tom said his business would add new customers if he just had more money for more marketing.
There are three problems with Tom’s prescription for success: it’s not specific, 有形的或可信的.
Having said that, not having a plan for growth isn’t Tom’s biggest problem. 你看到, Tom’s answer reflects an existential problem with his business: it doesn’t generate enough money to reinvest in marketing. When I see a business that cannot afford marketing, 我看到一家公司就是这样, 最好的情况, 沉闷的等待模式, 或坏的情况下, 运行在空.
A healthy business generates sufficient cash flow to fund ongoing new customer acquisition. So when I write a memorandum before I take a company to market, I take extra care to understand my client’s customer acquisition plan. A smart buyer wants to know the company’s ideal customer, how the company finds that customer, 以及他们的成本. 从那, I derive the company’s formula for new customer growth: for X amount of marketing, we will gain another Y number of customers which should translate into Z amount of new revenue. Get the point, this is specific, tangible and believable. Having a plan like this will bring a premium when the 卖方 takes his/her company to market.
“Ok Jim, I see your point, specificity is important,” 汤姆说, “but how many companies can actually do that? That’s pie in the sky thinking.” I had to admire Tom’s honesty, and he was right. Not many businesses can be specific about their plan to grow to the next level. That’s why I so often hear the “more marketing” answer. 但没有计划, or the business model to fund the growth plan, the business isn’t sellable for meaningful value. When a business is not generating significant cash flow to reinvest in marketing, it indeed might be 运行在空.
JIM CUMBEE is President of 田纳西河谷集团, Inc. a retainer-based business brokerage and transition mediation 田纳西州富兰克林的公司. Cumbee is an attorney and has an MBA from Harvard Business School. 吉姆是 韦德体育app官网 Run, A Pro’s Guide to Selling a Business. http://www.amazon.com/Home-Pros-Guide-Selling-Business/dp/1599329239 . He has a wide range of corporate 和企业家ial experiences that make him one of the most sought-after business transition advisors in the state of Tennessee. The principles above are true, 但是故事, names and fact patterns are changed to preserve the parties’ identities.