Confidence Trumps Optimism

Monday, October 26 2015

There’s a difference between optimism and confidence. You might look forward with optimism, but how confident are you that you can sell your business? Are you in a growing, shrinking or flat market?

Your optimistic self thinks:

  • “Don’t worry about it. Things will be fine. Business goes up and down. That’s just the way it is. But I expect them to be up when I’m ready to sell.”
  • “This is a great business! It’s paid me a better than average wage. I’m part of that nebulous ‘upper middle class.’ Of course someone would like to buy this business so they could do the same.”
  • “One day, someone will come along with an offer I can’t refuse and then I can enjoy the fruits of my labour.”

But consider reality. We don’t have Canadian stats, but we know that only one in three US companies with over 100 employees finds a buyer[1]. Companies with less than ten employees have only a one in 5.5 chance of finding a buyer – less than 20%! Are you optimistic that you’ll be the lucky one, or are you confident?

What can you do to be confident? Here are ten steps you can take:

  1. Show at least three years of increasing sales and profits.
  2. Make yourself redundant. Develop a management team that can run the business without you.
  3. Increase your own salary so potential owners can see how much more the company will make without having to pay you.
  4. Make sure your financials are in great shape and know your numbers.
  5. Develop processes for everything and document them so it’s easy to train someone new.
  6. Diversify your customer base. Don’t have all your eggs in just a few baskets.
  7. Develop repeatable, predictable income streams, such as subscriptions, membership fees, rentals, and leases.
  8. Develop and train your employees to make them the best they can be. They are a huge part of what you are selling.
  9. Get a coach – someone who cares about you and your business and will help you stay on track with all the steps you need to take.
  10. Get your business valued by a professional and set a goal for how much higher you’d like it to be.

While optimism is powerful and important, confidence comes from the knowledge and understanding that you’ve done all that is required to prepare yourself and your business for its sale.

[1] Successfully Sell Your Business, Andrew Rogerson, 2008