NFIB

Plans for the Future
01/ 12/ 2006
by Amy Cates

What you can do today to make your business appeal to buyers years from now

Selling your small business may seem years away, but the strategies in maintaining a company and selling it have more in common than you may think. With the proper business philosophies in place, “you don’t have to worry about selling the business, it will sell itself,” says David Kirkpatrick, senior vice president of organizational development for John Moser & Associates in Birmingham, Ala.

Attract talent
Kirkpatrick speaks from experience. Throughout his 15-year ownership of Communication Network Corporation, a telecommunications equipment provider, Kirkpatrick found that employees best demonstrated the company’s stability. A stable management team, he says, can be a magnet for a prospective buyer because that team could likely transfer to the new owner and help carry the company forward.

Richard Diaz, a partner in the 1-year-old Tampa engineering and land planning development firm of Diaz, Pearson and Associates, recommends finding employees who can take over when you decide to sell. “When you’re beginning to think about transition, you ought to have an eye toward recruiting individuals who are capable of doing your job,” Diaz says. “Otherwise, you’re chained to your firm.”

Serve the customer
At CNC, Kirkpatrick recalls, “The only boss we had was the customer.” He encouraged his employees to deliver quality customer service, ensuring they understood the vision of the company and the product it offered.

“I’m a firm believer that the product represents how you see working with the customer,” Kirkpatrick says. “The product line has to be the very best because we’re putting our reputation behind it.”

A reputation for providing solid customer service almost guarantees interest from prospective buyers. How your company delivers will impact your bottom line—and your business’ appeal. “There’s nothing more important than your company’s reputation,” Kirkpatrick says. “It’s the one thing that will take you forward.”

Build your reputation
As you build your business, you build a reputation. And buyers are interested in a solid name as much as a sound bottom line. “Your reputation is vital,” Diaz says. “It establishes the value of your goodwill.”

According to Diaz, in a booming engineering market like Tampa, Fla., it’s not uncommon for large engineering companies to actively seek out smaller businesses. Smaller firms are easier to acquire than having what Diaz calls a “cold start.” Set your small business apart from others by having a reputable name.

Kirkpatrick adds that your relationship with your company never really ends. “The company has a life beyond the closing date,” he says. Besides, Diaz adds, you spend years building a name, and “you’d like to see it continue on.”

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