5 Ways to Boost Your Odds of Getting Acquired–Big Time
Over at www.SellabilityScore.com, we've just completed some analysis of 9,779 businesses and discovered that structuring your business so that it can run without you increases your odds of attracting an unsolicited offer by 44%.
Among all the businesses we analyzed, 16% had received an offer to buy their business in the last year. However, when we isolate just those businesses that claim they could survive the absence of their owner for a period of three months or more, their likelihood of having received an offer jumps to 23%-that's a 44% increase when compared to the entire respondent pool.
Along with driving up your revenue and profit, the third leg of the entrepreneurship stool is to ensure you can build your business in a way that it does not depend on you personally. Here are five ways to get your business running on autopilot:
1. Ask employees what they would do
When employees come to you with a question, avoid the knee-jerk reaction of answering it. Instead, ask them what they would do if they owned your business or if you were not available. This question forces your employees to start cultivating an ownership approach to their decision-making. Once in the habit, your employees will come to you for input a lot less.
2. The yes-able proposal
If your employees do need your input on a decision, insist that they come to you with a "yes-able" proposal (thanks to Pieter Van Osch of Spark Leadership for sharing this strategy with me). The yes-able proposal is a request that can be answered with a simple yes or no. Employees have a habit of hoisting their problems onto your desk, but asking them for a "yes-able" proposal forces them to think through the alternatives and recommend a solution. The yes-able proposal includes a statement of the problem, a sentence or two about alternatives the employee has considered, and a request to which you can say yes (or no).
In the old mode, you may have an employee come to you and say "Mr. Smith is really angry because his widget is not working properly. What do you want me to do?" The employee has taken the problem and successfully given it to you.
With a yes-able proposal policy in place, your employee will frame the issue differently, e.g., "Mr. Smith is angry because his widget is not working properly. I took a look at the device and I think fixing it would cost more than it's worth. We could just remind Mr. Smith that we don't accept returns, but since he is a good customer and it will only cost us $200 to replace his widget, are you okay if I replace his widget for free?"
You then can simply answer "Yes," and your employee is one step closer to figuring out how to solve problems in the future.
3. Give every employee a problem-solving budget
Ritz-Carlton hotels give every employee discretion to spend-without approval from the general manager-up to $2,000 on a guest. The vast majority of customer problems can be fixed for a fraction of the discretionary spending amount, but the $2,000 figure is a large enough number to make the message clear: Front-line employees should act first, make the customer happy, and ask questions later. Typically, many employees know how to make a customer happy but lack the confidence to act. Giving employees some spending authority will speed up the resolution of customer issues and empower your team to do the right thing when you're not there.
4. Automate everything
Take one day per month and make a note of every task you complete. No matter how trivial, write it in a diary. Then at the end of the day, ask yourself if there is a way you could automate each of the tasks. Start with your most frivolous to-dos. If the Internet service provider needs to be paid once per month, automate the payment on your credit card. Better yet, give a trusted employee discretion to sign checks of up to $500 without your signature (to avoid fraud, have the bank statements delivered to your home so you can see what checks were written--without the bank's envelope being intercepted at the office). Also, add a trusted employee as a user on the key software packages you use to run your business so that person, too, can see what's going on. Then when you're absent, that employee will have the knowledge to make any necessary fixes or changes.
5. Hire a 2iC
A second-in-command is your general manager and your most trusted lieutenant. Give that person broad powers in your company so he or she can be your proxy when you're not in the building. Never question your 2iC's judgment in front of junior employees, as it will undermine your right-hand person's authority and undercut his or her ability to act for you when you're not around. Instead, meet with your 2iC one on one to iron out differences so you can present a united front to the rest of the team.
The process of setting up your business so that it can run without you is a journey, and the first step is the most fun: taking a vacation. If you can successfully resist the urge to jump on your computer and check up on how things are going at the office, you'll be able to truly see how your company does in your absence. Then when you get back to the office, you can work on refining the autopilot process.
JOHN WARRILLOW | Columnist | Sellability
John Warrillow’s new book, The Automatic Customer: Creating a Subscription Business In Any Industry will be released on February 5, 2015. John is also the author of Built to Sell: Creating a Business That Can Thrive Without You and the founder of The Sellability Score, a company dedicated to helping business owners improve the value of their company.