If you wanted or needed to sell some of your accounts to free up cash to achieve your growth objectives, or pay down your debt, are you confident a buyer would give you maximum value for them? If you decided to retire and sell your company, could you start the process of looking for a buyer immediately? Would you know how to find the right buyer and be able to provide that buyer with the information they would want to see, quickly and easily, during the due diligence process?
In other words: Are you ready?
No matter your timeline — tomorrow, next year or in 10 years — the key to achieving your personal and business goals is to work with a trusted and experienced buyer, one who will respect the company you have built and recognize the true value of the accounts you created. However, attracting this kind of buyer requires planning. You cannot wait until you decide to sell to get your company and accounts in top shape. You need to operate your business every day in a way that ensures your accounts are attractive, valuable and ready to sell when you are.
In other words, to maximize the value of your accounts, whether you are contemplating a partial or complete sale of your customer base, participating in a dealer program, or making a complete exit from your business, you need to establish your company as a high-value business.
Six Steps to Transform Your Business
Ideally, you have been running your company from day one with your short- and long-term goals in mind and with a strategy for how to accomplish them. Your operations incorporate industry best practices for customer service and installation, business processes and standard operating procedures, and managing your central station relationships; and you protect your company with an appropriate insurance program.
But what if you are not running your business this way, or you aren’t sure? It is not too late — you can transform your company into a high-value business by taking a critical look at your business and making some changes. Here are six key steps that you can take to ensure that potential buyers see your company as an attractive investment:
1. Plan your growth and exit strategy. Companies that set their short and long-term goals, identify their strategy for achieving those goals, and then run their operations with their end-game plan in mind, ultimately attain the most value for their accounts. While there is no “right” strategy and no “right” method for you to develop that strategy, you should consider including a few key elements:
- Short and long-term goals, both business and personal;
- Steps to reach those goals;
- Challenges you anticipate; and
- a tentative timeframe.
While your goals might change over time and you will want to review your strategy periodically, it is critical that once you have your plan, you use it to guide everything your company does, from management decisions and standard operating procedures, to your central station and vendor relationships, and even your day-to-day operations.
2. Monitor and manage your attrition. Attrition is a key value-driver that directly impacts how much potential buyers are willing to pay for your accounts. An accurate attrition rate provides buyers with both significant comfort in your record keeping and a general picture of the economic health of your company. Taking consistent steps to maintain attrition rates at or below industry standards (about 12 percent gross attrition) establishes your company as a high-value business. In addition, monitoring and managing attrition helps your company identify and react to problems, and to develop procedures to minimize account aging and loss as well as maximize your revenue.
3. Adopt and follow standard operating procedures. Developing and implementing solid standard operating procedures will help your company provide excellent customer service for your subscribers, lower your attrition rates and increase revenue. When it comes time to sell your accounts, having good standard operating procedures enables you to provide crucial information to your potential buyer. While there is no right way to operate your company, your standard operating procedures should include: