Exit Strategy

Exit Planning – Five Chapters to Include In Your Company Success Story

A 2015 survey by CNBC and the Financial Planning Association found that while 78 percent of small-business owners intend to sell their businesses to fund their retirements, fewer than 30 percent have a written succession plan.

To maximize the value of their business, owners must look ahead, with plenty of time to plan for a successful exit, and they must tell a compelling story to attract high quality buyers.

Begin by writing your company’s success story. Sit down and write a paragraph for each of the five areas below.

1. Good Growth Prospects

2. Unique Products or Services with Operational Strengths

3. Proven Trends & Profitability

4. Good Management Team and High Employee Retention

5. Repeat Customers w/ Low Concentration

Sell-Side Due Diligence

In addition to telling a compelling story, a key to getting the entire transaction to a successful conclusion is to perform due diligence on yourself before taking the company to market. The goal is to uncover anything that may be perceived as a negative surprise. Include the following items in your due diligence work.

1. Examine Your Financial Records and Controls

2. Review External and Internal Agreements

3. Document Policies and Processes

4. Mitigate Employee, Litigation or Environmental Issues

5. Comply with Applicable Government and Industry Regulations

If you are planning to sell your business within the next five years, begin the planning process now. It leads to a higher valuation, makes the process easier, and allows you to sell the company when you are ready.

Follow me on Twitter @RenitaWolf

Note: this post originally appeared at www.PoeWolfPartners.com

Business Opportunity

The Opportunity Discovery Canvas

Problems are often opportunities in disguise and entrepreneurs are the problem solvers who have the ability to identify problems and find solutions.

With funding provided by the Kauffman Foundation, Entrepreneurial Learning Initiative, LLC has developed a tool called the Opportunity Discovery Canvas. The tool was designed to help entrepreneurs that have identified a problem to work through a basic framework to evaluate the feasibility of their solution. Using a series of questions that make up the Opportunity Discovery Canvas, entrepreneurs can examine the problem in detail, propose a solution, and connect with the customer to help them determine if their idea is worth building a business around.

The Problem

  • Describe the problem you want to solve.
  • How did you encounter this problem or unmet need?
  • Do other people have this problem?
  • Why is this problem worth solving?
  • Describe the type of people who have this problem.
  • Describe the people who most likely have this problem.
  • What is their age, gender, areas of interest, profession, etc?
  • Which of these potential “customers” can you most easily connect with?
  • How are they currently solving the problem?
  • Describe other solutions that are currently available.
  • Why are the current solutions inadequate?
  • How important is this problem?

The Solution

  • Describe your proposed solution.
  • What is the single most important feature of your solution?
  • What is the most effective way to demonstrate your idea?
  • How will you know if others are interested in your solution?
  • How will your solution be different?
  • How is your idea better than existing solutions?
  • Describe the key differences.
  • How will you know if others value this improvement?
  • Will people pay for your solution?
  • Will people be willing to pay for your solution?
  • How often will they need your solution?
  • How will you know that your solution is valuable to others?

The Connection

  • How will potential customers know about your solution?
  • How can you find people who would be interested in your solution?
  • What methods of communication will you use to reach them?
  • What messages do you intend to convey?
  • How will potential customers purchase your solution?
  • How can you make it easy for your customers to purchase your solution?
  • How are they currently accessing other solutions?
  • How will your customers know they can rely on you?
  • How will you communicate this message explicitly?
  • Why is this problem worth solving?

How can you use the Opportunity Discovery Canvas to refine your business idea?

You can view and download the Opportunity Discovery Canvas at: http://www.ibrcenter.org/pageimages/p63952-Ice_House_Opportunity_Discovery_Canvas.pdf

Note: this post originally appeared at www.stevebizblog.com.


Sales Valley of Death

Sales and Marketing Valley of Death

As an entrepreneur who has been both the recipient and provider of angel investment funds, I really enjoyed a recent Kaufman.org article titled The Rise of Angel Investing. There are lots of great nuggets to be found in this article, but I especially enjoyed the part about the timing of angel investments and how the ability to generate this funding can either make or break a company. Viewing the graphic below will demonstrate the point. If the startup doesn’t receive the needed funding at or before the valley phase, it might not be around for long.

B2B Valley of DeathSo how does this “valley of death” timing issue apply to sales and marketing?  Simply this: If you wait until the product launch or commercialization phase to crank up your marketing engine, you may be too late to generate positive results. This doesn’t just apply to startup companies; it is also important for each product launch at existing companies. Putting the word out today doesn’t necessarily lead to revenue today (or even tomorrow). There is a lag time to move prospects from “aware” to “interested,” and from “engaged” to “customer.” In some industries (e.g. enterprise software), this sales cycle can be six months or more – so the sales leads you close today first came to your attention quite some time ago.

The scary part about being in the valley of death is the fear that no matter what you do, a successful outcome is not assured. This is why it is hard to raise money and it is why we B2B marketers hold our breaths, hoping and praying that the next campaign will be the home run that leads to product launch victory.

So how do we improve the odds of victory? One strategy is to apply lean business planning and minimum viable product (MVP) principles to ensure that the investment in the product is reasonable in relation to the upside potential. Another important step is to test the viability of the marketing message and lead generation potential very early in the process. You can do this with online methods such as pay-per-click and SEO during the R&D part of the process. In fact, you may collect some data in your early marketing tests that help get your product development on a better path.

The good news is that the sales and marketing valley of death can be a lot more comfortable if you have a good sense of how the product will sell based on your early testing. As the book says, Hope is Not a Strategy, and when you ask investors (or your CFO) for money based on data, not just great intentions, you are much more likely to get that funding and achieve a successful launch.

Note: this post originally appeared at GreatB2BMarketing.com.