OPTIMISE YOUR BUSINESS EXIT STRATEGY

OPTIMISE YOUR BUSINESS EXIT STRATEGY…AND REAP THE REWARDS…

Selling your business for the maximum price is a goal many businesses strive for…Yet there are lots of misconceptions around this topic, and they can impact the outcomes of your sale.

But this is also a lot you can do to maximise your results. In a recent chat with Daniel Wong of The Alternative Board Australia, we talked about business exit strategies and of course revenue…

This video is for you if you’re thinking about optimising your business for sale at some point… 

🎥 Watch it here 👇🏻👇🏻👇🏻

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If you prefer to read rather than watch…Read the video transcript below…

Daniel: Hey everyone. Daniel Wong from The Alternate Board here in Brisbane. If you’ve ever been thinking about your business exit strategy, how you can make more money, more freedom, less risk, all of those amazing things.

Then this is a video for you. I’ve done several articles on recurring income, streams, and subscriptions. And today we have a very special treat. I am here talking with Phil from Rainmaker Revenue & Sales, about why the right revenue is important when it comes to selling your business. Phil and I have met as we have a joint interest in helping business owners really capitalise on their investment.

When it comes to selling a business, there are a range of factors that are important. Now, how much growth potential is there? How much control do you have over your market? What is the main risk, and many other factors. I tend to look at this from more of a system and process point of view. Whereas Phil focuses primarily on the revenue and the generation of income from your existing assets.

Phil. I know you’ve been involved in a range of sales of business, and…

a lot of people believe …’if they just maximize their top line revenue, then they’ll get the highest amount for their business,’ but  my understanding is your experiences are a bit different from that…

Phil: Yes, thanks, Daniel and good morning. Here’s what I’ve learned over time, businesses, firstly, need to understand that they might have a goal for the business, that goal of the business might simply be to sell the business in one year, or it might be to sell it in five years or it might be to literally grandfather it and pass it onto the grandkids.

No doubt when you are talking to people about exiting and helping them grow their business as you’ve mentioned before, a range of them will sit there and go, well, it’s just about getting as much money through the business as possible. 

So there’s a couple of initial things to think about, and one is this…If you are looking to sell your business quickly, it’s not necessarily about the volume of money. It’s the style of revenue that you’re actually putting through. For us a really key component is using the resources that you actually already have in your business, and then looking to optimise those.

So to provide an example, if you are looking to sell in one year’s time at your business, then you might look to all of the existing contracts you’ve actually got in place. If that’s the style of business. Is get extension on all of those contracts that might be more valuable to extend those than to try and go out and get new contracts.

If you goal was holding onto the business and you want to give it to your grandkids, then again, you might be looking to really set in place all of your marketing and all of your sales strategy. Your revenue strategy is about a slow build, that’s very, very consistent, out of what you’re you’re currently doing.

Daniel: I think that is brilliant, really because you are essentially getting the most amount of gain for the least amount of effort and investment and risk.

Do You Have Any Case Studies That You Could Walk Us Through Where You Engaged With Somebody And You Really Helped Them With This Delivery? from that…

Phil: Yeah. So one particular organization was a startup business. So they were in a way they were selling their business and they had to go out and sell it to investors. And then they were looking at a relatively quick exit out of that. 

So we went through a process of really establishing how they were talking to the market, which was really important. The words that everyone used within the organisation, and how they saw themselves as a business were looked at during that process. We did this so they were recognised for something in the market. 

From there we went through and built a revenue engine. So that engine essentially allowed them to be able to use the resources they had and each time they wanted to increase that revenue because they could actually at the same time provide the service, because there’s always that balance of you can go out and get a lot of revenue, but if you can’t provide that service to go with it, things eventually go off the rails.

So we built that revenue engine, which involved the marketing involved, the sales involved, their pricing, their product, and all of these different services on the way through essentially what they came out of that was, they were able to tweak it. As they can provide more service as they release more software, they could just tweak it to grow, but they also had a vision of where that software was going and where the pricing actually sat as well.

What that all culminated in was a written process that they could then demonstrate to the potential buyers, investors, and then eventual buyers that they had something real, and that it was scalable. That’s what I think a lot of businesses, even by not documenting that process, it becomes hearsay.

And to also show through and say, ‘look we’ve got all of these revenue forecasts, have we actually hit these revenue forecasts?’ But importantly, this is what we did to hit those forecasts. This is what we did wrong to hit those forecasts. These things failed. We know we’ve gone down that path and we’ve come back from that path and we’ve realigned and gone again.

So as a buyer, you are sitting there with a lot of security that you know, that by injecting more capital into that business or whatever your plans for that business are, you’ve got high probability of reliability of incoming growth. And that’s really what we try to achieve out of building that revenue engine for an organisation.

I think the interesting part too, is that every business that currently has a revenue engine, it’s just a case of do they know it, and are they starting to utilise it? Do you find that the same sort of thing, Daniel? 

Daniel: I haven’t personally used that terminology revenue engine. Right. But I use similar terminology either.

I’ll talk about how clear are they about where they want to go and how capable are they of actually executing that? 

I quite like the terminology revenue engine.

How Would A Business Owner Know If They Do Have One? And Then If They Do Have One, How Would They Know If There’s Opportunity?

Phil: Think firstly is if they’re getting any form of income or revenue into their business, then they have a form of a revenue engine. So they’re doing something they’re taking a series of actions that actually bring in revenue to their business. So therefore they have one now again, whether they recognise it or not. And then it’s a case of saying, all right, well, I need to write down and, ideally sit on a whiteboard and brainstorm things like ‘What do I actually do now?’ and ‘What are the resources that I actually had within my organisation?’ So one of the big things that we are really, really strong on is to say before we go and spend a whole lot of money, let’s have a look at what you’ve actually got here at the moment.

And for example, it might be that it’s a database that has been lost in your CRM from three years ago. But that is actually an asset that’s sitting within the business now, how you utilise that. And the efficiency of doing that is the process that you need to work for. But that’s actually a resource as an asset potentially that you’re not utilising, but you don’t have to go and pay for.

So it’s those sorts of things that all add to the engine. The engine is ultimately the process documented down, that’s tweaked changed, measured, and the data that you feedback from. It can be a really simple thing. It can be a scrap of paper. This is what we do. It can be a very, very sophisticated, you know machine-learned piece of process and system.

Daniel: Yep. Absolutely. It’s all, especially when it’s coming to building the value of the business, making it more sellable, and reducing the risk. It’s all about having the systems documented and the processes documented. So somebody else can come and pick it up and continue the growth which I love. 

Are You Able To Share Any Stats Or Quantify Any Great Results That You’ve Been Able To Have?

Phil: Yes. I’m just trying to think through this, we’ve had a lot of good success.  Probably simply was a smaller organisation, and they were growing within a new defined market. We were able to take them from about 120K in revenue. So they weren’t covering costs. They weren’t taking wages, they weren’t doing anything, but simply by defining down that process, and that involved even working through to their media and, and how they were doing it, giving themselves to market. We also looked at their pricing. We looked at a whole range of other things. And as a result, we took them to about 580 K within a year. And all they needed to do was simply just understand what they had, and start to do some repeatable processes against that. So they had a good business, they just didn’t understand which repeatable processes they needed to do. And they needed to find out who they were a little bit more as a business.

They’ll probably go to 1.2 mil this year and it’s a services-based business. So, there are many, many examples, I suppose, that could be led. 

One of the things that I think really needs to always be taken in the context when you’re looking at building these engines is that every business is actually really unique and that’s not just a throw-away line.

If you have two businesses that are identical, and one’s owned by a 64-year-old male and the other owned by a 23-year-old lady and they both have an identical product, simply the way those two owners and their staff operate and think you’re gonna end up with two different businesses and then it’s designing your processes against that.

So, that’s the beauty of it, but you’ve always gotta be considering your engine and it needs to be unique. It is important to not do what a lot of organisations are saying that and the big catchphrase is ‘we care.’ Think about it if there are 50 companies and they all say ‘they care.’ What does it really mean at the end of the day?

Daniel: I love everything about that story, Phil. We should have started the interview with that. There’s a lot of great success here. 

What Is It That You Love The Most About What You Do?

Phil: I think it’s a little bit like from our discussions is it’s really.

Being able to be part of the business, being part of people who are driving new ideas and new initiatives into the market and being able to assist people, and their businesses and the flow and effects that go through and, and the staff and, and everything else. So I think it’s having variety within our role, and taking that experience that we learned from one customer and be able to look across and say that, and the 20 other experiences I’ve had and that similar rate, here’s something we can pinpoint. We can get to quickly for a client. So rather than having to go through a lot of trial and error, to be able to bring them to a point much, much quicker, and more succinctly so they can actually, you know, achieve those goals and, and whatever those goals may be, and they’ll be different for every business as they say.  So I think we’re probably on a similar page of  what we get out of it and what we like to achieve and the independence of just being able to work with a whole variety of people.

Daniel: There’s definitely something about business owners, working with business owners, right? Rather than a employee consultant, trying to resonate with the daily life of somebody who has all the skin in the game look pretty much everything we spoke about could be pulled apart a bit further. And the best way to eat an elephant…is one part at a time.

So for the people who are watching this video that are like, Phil

Where Do Businesses Even Start? What Advice Do You Have For Them?


Phil: I would first go write down all of the resources you think you’ve got and then have a look at your revenue engine and start to consider, Do I have a revenue engine? What does it look like?

And then starting to think. Okay, what is it I can do? Do I need some external advice to fast track, where I’m going? Do I have it play with it, but it’s the realization that you actually have an engine and you actually have resources now. What am I gonna do with those? How can I start to optimise those within my budget, within my scale, within my ability to deliver the service and balance?   All of those questions would be the first place to start. And brainstorm these questions ideally with your team and ask…’What are the resources we’ve got?’ and ‘What do we currently do?’

I would say 80 plus percent of businesses don’t do this exercise. By simply doing it, you can get a realisation that allows you to start to focus on that revenue outcome..

Daniel: I love the, what is it that we actually do? That same question from different perspectives really opens up a lot of opportunity

Phil, this has been amazing. Where can people either learn more about you learn more about your services, learn more about revenue engines, or invite you out for coffee? 

Phil: Always up for a coffee by the way. And a chat! I love a chat, as you can gather… Contact us through our website, which is www.rainmaker sales.com.au

Or just connect with me on LinkedIn. I love to open new connections…DM me to have a chat. If I can provide a bit of quick advice, ans see if we are compatible for each other. If I can help a business, always happy to do that, 

I really appreciate it. I know you are out there doing some good things for your clients and, I believe the more that we can share and collaborate as professionals in this area, and we hopefully add value to our clients.

If you want to build a robust revenue engine to grow your business revenue and take your business from good to great…
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