managing your business

Are you managing your business?

or is the business managing you?

Most business owners believe that they are managing their business well, and many are. But it is all too easy for ‘the boss’ to feel that, so long as he is giving the orders, he knows what is going on and all will be well…Until things start to go wrong.

At that point, the doubts creep in and one needs to conduct a searching re-evaluation of what is going on. Not always easy to do without feeling a loss of reputation or credibility with staff and customers.

Fortunately, there is a simple checklist – some questions that a business owner can ask himself. If the answer to any of these is ‘NO’, then there exists a clear need to review the whole process of managing that business.

10 Questions to help you manage your business

 

1. Do you hold regular (monthly) Management Review/Board Meetings?

Getting all the key players in your business together once a month is the best way of managing business effectively, ensuring that everyone understands the latest position and priorities.

2. Do you review a full set of management accounts at those meetings?

This should include the latest Profit & Loss statement and year-end profit forecast. It is always good to share such information and sharing it with trusted senior managers is the best way of gaining full understanding of what needs to be done and who is taking responsibility.

3. Do you also review the order pipeline?

Having the clearest possible fix of prospects for new business is the first measure of the business climate, and can lead to more meaningful discussions with customers and the launch of relevant marketing promotions.

4. Do you undertake periodic customer surveys?

Many business owners think they ‘know’ their customers. The occasional independent survey will validate that, as will talking and listening to the Customer Services team. Furthermore:

5. Is there a formal complaints reporting and response process?

This is the best barometer of customer opinion and the front line for maintaining a positive reputation in the marketplace.

6. Do all staff have job descriptions and is performance reviewed annually?

This is especially relevant in understanding your staff and building their confidence.

7. Do you review responses to your website; is it updated regularly?

Nowadays we all think we understand the power of social media. But there is a need for sustained marketing investment (however modest) which cannot be ignored.

8. Do you issue regular newsletters/blogs to customers and staff?

Customers and staff really appreciate such communications because it shows that the business owner is really aware of their needs and is listening.

9. Do you have a rolling new product development plan?

If your product or service is dating because it faces increased competition, you need to upgrade it. This programme should also be reviewed regularly to ensure that ‘mission creep’ does not delay the vital launch of a new initiative.

10. Do you have a three-year business and marketing plan?

The three-year cycle is important in ensuring that the longer-term goals of the business are not forgotten. In a ‘short-term-ism’ age, this is easily done!

For many businesses, such changes represent a considerable change and challenge to ‘the way we were’. But our experience shows that answering ‘NO’ to any of the above represents a longer-term business under-performance and, ultimately, a weakened exit valuation. No business owner wants to see his lifetime work undervalued when the time comes. So it’s worth making the change now.

CMC Partners work with business owners to realise their full business potential, providing growth and exit strategy development. To book your FREE confidential meeting, complete the form below.

Long term success

12 key tips to aid entrepreneurial long term success

As an aspiring entrepreneur the thought of starting up your new business is exciting, challenging and, nerve racking.  You have the perfect business idea. You have identified a gap in the market, you have the skills and passion to differentiate yourselves from others. Now what?

The mechanics of setting up a business are fairly straightforward with thousands of people doing it every year, but 1 in 3 business start-ups fail in the first 3 years. How can you improve your chances of setting up and operating your business for long term success?

CMC Partners since 1989 have successfully supported business owners, helping to realise their full business potential and helping to provide growth and exit strategy development.

Our partners have applied their years of business experience in setting up and growing businesses to develop these key tips to aid entrepreneurial long term success.

These tips will help avoid the common start-up pitfalls and achieve long term business success.

1. Get started, the finer details will develop

One of the most common mistakes made by first time start-up businesses is spending too much of their time pre-launch focussed on the intricacies of their product or service.  This is both quite natural and understandable. After all, starting a new venture is a big step and it is important to get it right.

2. Talk to potential customers to gain valuable market research

We have often observed a reluctance by aspiring entrepreneurs to actually start talking to potential customers. Admittedly, this is a challenging step for people with a great business idea but who have little or only limited experience of selling. One consequence is an almost inevitable tendency to rely far too heavily on their own personal perspective. The alternative is to take a much more market-orientated view of the world – one that strives to put the needs of the customer right at the heart of the business. Adopting this approach means the sooner you engage with potential customers – ask questions, share your ideas, listen to their opinions and adjust your ideas in the light of market research the more robust your business plan is likely to be. As military strategy suggests “No battle plan survives contact with the enemy”.

3. Craft a clear value proposition to connect with your target audience

This is the clear articulation of why customers should choose your product or service rather than a competitors. Read more about why it’s so important here

4. Develop a structured business plan to take your business forward.

Business plans are not just for banks. All businesses should have a plan. How else can the owner or the employees understand how the business is going to move forward?

5. Build a support network and ask questions

Your support network could come from a variety of sources – friends, people in the same industry, other local business people, mentors, and/or business advisers. You can build a local network by attending and/or connecting online with networking groups in your local area. Use your network to ask questions. The only stupid questions is the one you don’t ask.

6. Really look after your customers

 Customer service should be the heart of your business. Exceeding customer expectations can help attract and retain customers. Always deliver a quality product or service, on time and within the agreed budget.

 7. Be on time with invoicing and keep a record of outstanding amounts

 Your customers should always pay promptly, but every now and again you may need to remind them. Do this politely and clearly. Invoicing software can be a great addition to your business by allowing you to send invoices while at home or on-the-go, helping you get paid faster.

8. Hire the right people into the right job

 One of the most difficult steps in starting up and growing a small business is taking on employees. You need to think rationally as to what type of person can help you, what tasks can and need to be delegated, what skills are required and then create a job description. This blog may help you approach employing people in the right way. 

9. Be clear on what profit is and measure it

 The true profit of a business is the only measure that matters when it comes to long term success and ultimately a successful exit when it is the crucial valuation measure. It’s important to get it right from day 1. Examine the profitability of your business and test your pricing and cost assumptions to destruction. Read more on what profit actually is.

10. Be agile for long term success

Be willing to learn, adjust and adapt. Agility is a very important trait for the successful entrepreneur.

11. Protect yourself with a robust shareholders agreement

Start-ups understandably focus on positive outcomes; but take advice early and ensure you have a robust shareholders’ agreement in place from the start.  Founder shareholders often fall out and establishing clear ‘good leaver’ and ‘bad leaver provisions’ helps avoid pain, cost and resentment if it becomes necessary to part company at a future date. Discover more about shareholders agreements

12. Get an exit strategy, it’s never too early

In order to maximise the ‘life time’ value you get from your new business, it is essential to start to consider how you may exit or leave it at a later date. By carefully planning your exit strategy early you can shape your business into the ideal position for your chosen exit option. Ideally include it in your business plan and review annually. Read more about exit strategies here

 

These tips are very much focussed on starting and growing your business onto the next level in line with your personal business objectives. Starting up a business is the easy bit, it’s the growing for long term success that presents challenges.

CMC Partners are trusted experts at helping business owners to grow a profitable business, solve business problems by helping you make important decisions and increase value. We provide a personalised and local service with a range of practical advice and perspective. As business owners ourselves, with a proven track record of success, we give trust and confidence that we can make the difference. We may be able to help your business.

Get in touch to book your FREE 2 hour confidential meeting.

Too busy operating your business to even think about growing your business?

Growing your business?

When talking to owners of established small and medium sized businesses, I have found one issue to be remarkably common: Owner-managers having to focus on the day to day running of the business to such an extent that thinking about managing and growing your business is neglected.

Why is this problem so prevalent? The recent economic climate has led to as many costs as possible being stripped out of small businesses leading to a skeleton work force being run with an ‘all hands on deck’ approach to carrying out lower level duties or operational tasks.

This approach inevitably results in the owner perceiving a necessity to themselves become embroiled in the day to day operational issues to ease the running of the business.  This is at the risk of neglecting the overall strategy and their personal objectives.

It is all too easy for this inability to see the wood for the trees, to become a spiral from which it is challenging to escape.  This vicious circle can lead to the owner manager feeling in a ‘catch 22’; though aware that the tasks they are carrying out should be delegated, the seeming urgency of the situation means that delegation is not an option.

What is the net effect?

These are just some of the detrimental effects of such a situation:

  • Every day-to-day decision making depends on the owner manager.
  • The strategic view of the business risks being de-prioritised or even lost
  • Employees feel less empowered with regard to decision making
  • Employees reduced authority leads to a decline in job satisfaction levels
  • The staff not only become, but also feel, less valued
  • The company is distracted from fulfilling its growth potential
  • There is no specific focus on growing your business
  • The value of the business is not fully realised.

That the value of the business will not reach its full potential is the prevailing effect of such a situation.  When trying to exit and sell, the business’ consequent dependence on the owner manager’s knowledge and on the owner manager as a resource within the business is infinitely less appealing to a prospective buyer.

Stand back, review the situation and focus on managing and growing your business

Removing the business’ dependence on the owner manager is key to allowing them to take time to stand back from the business, to review the strategy (and exit strategy) and consequently increase the asset value of the business.

Whilst not having to channel all your energy into the day to day running, you, the owner manager are now free to focus on key issues that are an imperative to successfully managing your business and growing your business, such as:

  • The key numbers and accounts
  • Sales Targets
  • Marketing & opportunities
  • Staffing and Resource management
  • Processes
  • The organisation
  • Facilities
  • The strategy and vision of the business – strategic planning

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The owner manager can then get back on track with clear plans and personal objectives, enabling a less stressful, more effective role within a healthier business.

Stuck in the operational issues of the business? Neglecting the bigger picture? Very busy but going nowhere?

If this feels familiar and you would like discuss the working approach please contact CMC via the form below.

business sale - Brian Baker

Case Study – Successful Business Sale and Secure Retirement

Successful Business Sale to Provide Secure Retirement for the Directors – Graefe Ltd

CMC provided expertise, experience and guidance to the capable directors in successfully selling their business for a price beyond expectations. Find out how CMC Partners helped with this business sale by downloading the full story below.


The Challenge:

  • To sell the business
  • Achieve sufficient capital gain, allowing comfortable retirement for the directors
  • Complete the sale within 2-3 years time frame
  • Little disruption to the operation of the business

The Benefits:

  • Increased business value, allowing directors to retire comfortably
  • Exit/sales process completed within 2 and half years
  • Quick and efficient transfer of business ownership

When selling a business, finding someone with the knowledge is important but finding someone you can trust is paramount. We trusted CMC and we knew they were on our side. It was not a process they applied to us, but a journey that we took together. Brian Baker – Former Managing Director of Graefe Ltd

 

Selling your business

White Paper: So you are thinking about selling your business?

The decision to thinking about selling your business is one of the most important and emotional business decision you will ever make. It’s life changing with no room for error.

Thinking about your exit strategy early will give you the time to maximise the return on your investment for when you choose to sell your business. If you wait until events overtake you, the outcome may be disappointing.

This white paper will provide you with the knowledge on exit strategies and the process of selling your business, if that’s the option you wish to take.

What this ‘thinking of selling your business’ white paper covers:

  • The importance of planning your exit strategy
  • How to calculate your business worth
  • The 6 step selling process – how long it will take to sell
  • Basic business health checklist
  • Factors that can improve your business valuation
  • Tax planning
  • After the sale

We couldn’t have gone through our business sale without CMC. We knew what we wanted to do but we just didn’t know how to get there. CMC knew the selling process and was able to advise us each step of the way. Brian Baker – Previous Managing Director of Graefe Limited.  Read how we sold Brian Baker’s business for £3.2m here 

Download your copy by simply completing the form below

We shall then email a copy directly to you.

6 Signs You are Not in Control of your Sales Pipeline

The sales pipeline is a visual image to show you how much business you will attempt to close in a given week, month or year, i.e. it provides an overview of current sales opportunities.  Sales pipeline management allows you to track open sales opportunities as they move through your sales process, and with proper management, you can analyse problem areas in each stage of the pipeline.  Control your pipeline well and you will feel more in control of your sales figures. There are several warning signs you might be not in a control of your sales pipeline.

You spend too much time on administration.

This is the simplest and most obvious one – if you spend hours every week on administration and reporting, you are missing out on productivity and losing the chance to move your sales forward.  Also if sales people are spending too much time on administration, then you are using the wrong tools.  If you manage your sales pipeline well and have the right tools for it, then you no longer need to spend so much time on admin and can instead focus on what you do best – selling.

Opportunities do not move fast enough from one stage to another.

You have lots of opportunities in the sales pipeline, but feel that you are not able to manage your prospects and sales activities to effectively complete the sales process.  Each lead, or opportunity, must be managed, organised and developed.  You do that by following-up with your customers.

You do not know how many opportunities you have in the pipeline at each stage.

You don’t have an overview of all your open opportunities and therefore you are not able to recognise your priorities.  Your first and most important priority is to focus on the prospects that are “ready to buy”, i.e. the people who have agreed to the terms and conditions of the sale and have an approved budget for it.  Next, you need to look at your sales process and focus on the almost ready to buy prospects and do what you can do gently move them further along the funnel. And so on, following up on all of your current prospects, you can then tackle all the administrative work.

You do not know who the decision makers are.

Selling to one person is tough and in most companies there will be several different decision makers and advisers involved.  The more expensive or complex your product or service is then naturally the more complex the buying team gets.  If you are having a hard time identifying who is in charge of making a decision to buy, you will end up wasting your time and presenting the wrong benefits to the wrong decision makers.

You continue to lose valuable sales data.

One of your sales people leaves and then all the information leaves with that person.  You are stuck in the pile of emails trying to pull together all the information on the customer that was being sold to.  You then have to try and build a new relationship with the customers.  Trust is earned won over time and as long as you don’t have the way to deal with people who leave, you are at risk to neglect a valuable amount of your sales opportunities.

Your sales cycles are too long.

If your sales cycles are too long, the problem is likely to be that you have a gap somewhere in your sales pipeline.  When it comes to preventing these gaps, do you know if you need a larger volume of leads or do you need fewer, but more qualified leads?

In order to make the right decision, you need to be in full control of your sales process, know your customer history and how long it takes you to move the lead from prospect to customer. If you don’t have this kind of visibility to your sales pipeline, then you are failing to shorten your sales cycles.

Conclusion

The best way to keep track of and control what’s going on in your pipeline is through CRM software that can be used to manage the sales pipeline.  CRM applications provide clear visibility of sales cycles by tracking prospects through each of the sales pipeline stages of your selling process. Having the full visibility of your pipeline and a clear and managed process will bring to the light what works and what’s not on the way to winning deals. To identify where your funnel is leaking does not mean that all the prospects in your pipeline are going to convert, but you will be able to prevent some of the loss.

If you as an owner manger wanting to consider the best way to plan, install migrate to and develop the processes around a sales pipeline focussed CRM, call Phil on 07720 397040 or email him or alternatively contact him via this form below.

Don’t try to sell your business on your own! Get the right team

Time and again, business owners will say that they don’t want to spend more than they have to when selling their business. Business advisers are seen as a costly, necessary evil, and they will do anything to cut those costs with a ‘spot of DIY’. They should ask themselves:

How often do you sell your business?

My reply is: ‘Once, if you’re lucky – so how come you think you know all the ins and outs?’

A strong team of three professional advisers will smooth the way to a successful sale at best value. They usually add value and more than pay for themselves – provided you have selected the right team.

So, which professional business advisers are essential?

LEGAL

It is important to review current arrangements ensuring that the legal team has spot-on experience in commercial law relating to business sales, and who will respond promptly and correctly to buyer enquiries.

In one recent case, a new legal team did a preliminary due diligence assessment and discovered that the owners had not obtained change of use authorisation to allow manufacturing to take place there.

They also discovered that the deeds recording the sale of original shares to the current owners had been LOST (by another law firm!).

Both issues were resolved before the sale process started – how much value would have been lost if they had not?

ACCOUNTANCY

Everyone appreciates the need for regular financial reports, but some business owners have higher standards than others. The reports are not always as frequent as they should be, and may contain inaccuracies.

Also there may be certain costs that would not be incurred under new ownership. These need to be isolated and reversed out in arriving at a realistic valuation of the business.

The financial records need to be meticulous so that a buyer’s due diligence searches will have most questions answered on the first trawl.

Again, it is essential that you have a ‘business-savvy’ accounting firm advising you, so that you are best-placed to anticipate and respond promptly to buyer queries or objections.

 

General management, governance, preparing to sell

Legal and accountancy professionals claim to offer consultancy services but usually focus on their own specialism.

The Directors and Managers need to be prepared in-depth over a longer timescale. The independent business adviser such as CMC Partners will guide the vendor through every step of an unfamiliar, alien process.

The main examples demonstrating the need are as follows:

SUCCESSION PLANNING

A prospective buyer wants reassurance that there is management continuity post-exit. He/she will expect key managers and staff to be fully briefed and supportive.

You must ensure that the buyer receives a warm welcome from the ‘Remain’ team, and this needs to be well prepared in terms of ensuring that the right team is in place.

NEGOTIATING PROCESS

Vendors must be alert to what the buyer is looking for in negotiations. No matter how good you are in selling merchandise or services, selling your own business is very different and you must be fully ‘groomed’ for the challenges to achieve best valuation.

OTHER ADVICE

Occasionally, it may be necessary to call in ad hoc specialists; for example, on property, especially if the business owns the premises freehold. Is it more valuable to include the freehold in the sale, or not?

Selling a business is all about confidence

which derives from the vendor knowing what to do and recognising the need for specialist advice from those with experience in corporate transactions. The cost of such services must be carefully negotiated but ultimately the cost should better be regarded as an investment:

To Secure best value when selling your business

The process is inherently simple, provided that the business has been set up in the right way.

CMC Partners over the last 27 years  have been involved in many business sales, reaching a total value of over £156 Million to date. We have the experience and the skills to help you.

If you are thinking about selling your business and need the right team, contact us by calling 01844 319286 or complete the form below.

The 5 questions to ask if you’re selling your business

At CMC we have over 27 years of experience of helping business owners both build and then sell their businesses. So we understand what owners have to do to maximise their businesses value. I think there are some basic questions that every business owner should ask if you are selling your business.

5 key questions to ask when selling your business:

  1. Are you maximising profits? There’s no escaping the basic issue that businesses are sold for a multiple of profits. Therefore systematically examining all area of the business in order to maximise the profitability is a really important area.  Remember the UK cycling team’s success at the London Olympics and the now famous quote;  Getting the maximum profit from a business is much the same idea! See another CMC blog that gives some examples in this area – How to improve your businesses worth.
  2. Is your business well run? Do you have processes that a buyer can see that demonstrates that the business is well run and under control. As businesses grow they often outgrow the management process – areas that often need attention are management accounts, sales pipeline management, people processes, IT systems etc. What about the “company housekeeping”, are you up to date with your tax affairs, customer contracts and other bureaucracy?
  3. What is the role of the owner? If all of the business value is in the “owners head” then this isn’t much good when the business is sold. Of course the owner must direct and drive the business – but that doesn’t mean they have to do (or try to do) everything! Owners need to think about stepping back a little and let their key employees take responsibility in a controlled way – make sure your management processes (see point 2 above) are strong enough to allow this to happen. An area I spend a lot of time on  with my clients is working out the best way to delegate some of the business management to their “second-in- command”. It is important to make sure that there’s enough controls in place to ensure the owner keeps in touch with all of the big issues.
  4. Do you have good quality sales revenue? To a large part, buyers are investing in your customer revenues. There are two particular things they value. Firstly a good spread of customers; focus on a single big customer is unlikely to help your value. Secondly, do you have recurring revenues such as maintenance or service contracts? Buyers will value strong ongoing customer relationships.
  5. Do you have an exit strategy? Preparing your business for sale is perhaps the most important thing you should consider when you are thinking of selling. Give yourself at least 2 to 3 years to get the business into the best possible shape. This will give you time to fix the things that need to be fixed and focuses the owner’s mind on the business itself, rather than the day to day hurly burly. It’s a well-worn cliché, but very true none the less that…. you need to spend time “on the business”, not just “in the business”. A previous blog of mine talks about why having an exit strategy is a very good idea, see Why have an exit strategy.

I’ve written a “white paper” that describes in more detail the issues to think about when selling your business – So you are thinking about selling your business.

It is a good idea to get help with the above, as an experienced and external perspective is absolutely essential. At CMC we’d be delighted to help – call me, Simon Scott on 07850 894998.