Small Business owners finally recognize the need for a website but why? How many small business owners simply see the reason for their website as “because everyone else has one”? Many business websites function as a company brochure, a way to statically advertise the company.

Now don’t get me wrong, that’s not a bad start! Having an Internet presence only helps a company bring awareness to its products and services. But did you know that your website can and should actively sell your products and services?

Take another look at your website. This time look at it as if it were a member of your sales team. Would you expect better production from a sales team member than your website gives? If so, the website needs replacement!

You frequently evaluate your sales team. You provide training, incentives and then measure their output. You expect appropriate dress from your sales team because they represent your company. You hire sales people with excellent communication skills who articulate your business values. We recommend you set the same type of benchmarks for your website.

Does the look and feel of your website represent your business identity? Does it speak well for your company in both appearance and communication? Does your website provide all the information necessary for a customer to make an informed decision? Your website should suggest solutions meeting your customers’ needs, be friendly and informative and provide methods for listening to customers’ suggestions and questions.

Take another look at your website and see if you need to improve its sales productivity.

The entrepreneurial spirit bites most people at least once in a lifetime in the form of a great idea. For a few, it bites regularly. So how do you know when the bite means starting a business versus seeking a good antibiotic?

Research, Research, Research

When a new idea pops up, the entrepreneur thinks they’ve discovered gold. That’s not a bad thing, but a quick reaction without researching reactions by target markets and the total viability of the idea spells a costly disaster in the making.

While your idea holds great attraction for you, knowing the marketability to potential customers demands a prototype, research for potential markets, test marketing and a manufacturing source that can develop your product cost effectively. This means understanding price points, competition, barriers to entry, product lifecycles and sources of capital.

Consider an Existing Business

Many times purchasing an existing business with great potential reduces the risk, especially if its’ target market fits with your new idea. If existing loyal markets of a business for sale provide potential for your new product, you win more time for bringing the new product to market. A good business broker helps you determine if an existing business fits your need. A going-concern may grant you sufficient cash flow for developing a new product prototype and test marketing and more importantly potential customers already loyal to you.

The sale of mortgage bond underwriter, Bear Stearns at a fire sale price leads the financial news this past week. Some small business entrepreneurs wrongly believe the near collapse of Bear Stearns isn’t relevant to them and their business plans and goals. While Bear Stearns’ customer markets, financial status and business plan fall way outside of the small entrepreneur, its business lessons deserve careful attention.

Yes, the failures of big businesses remain germane to small businesses. Smart small business owners and those planning to start a new business glean valuable information from the failures of others, whether big or small.

So what went wrong with Bear Stearns? Of course a small blog article can’t cover in-depth analysis but we can see some important overall principles.

• Bear Stearns ventured into a very risky behavior and got burnt. While new markets tempt the best of us wanting growth and rewards, research, an understanding and evaluation of the risk should rule every decision.
• Bear Stearns got too deep into risky behavior, to the point there was no way out. If a business finds they can risk capital, the amount of risk should equal the business’ ability to lose and survive.
• Rumors surfaced and Bear Stearns reacted slowly, keeping its customers in the dark as the market speculated.
• In the face of trouble, Bear Stearns continued its risky behavior, believing in its invincibility by believing its past performance of escaping disastrous consequences would continue.
• And, finally, Bear Stearns appeared to ignore its financial peril, even while Bear Stearns customers lost faith and fled in droves.

Customers’ perceptions (true or not) dictate a business’ survival. To ignore the customer is to kill the business. When a business becomes so confident that it stops listening, the business guarantees eventual failure. A certain amount of risk leads to growth; too much risk puts the entire business in peril.

Sometimes there’s just no better time than the present! We’ve all heard that saying before and applied it to many things. One thing is for sure, in today’s day and age it can definitely be applied to selling your business. Within the next decade there will undoubtedly be some pretty staggering changes in the private small and medium size business sectors.

So what’s all the hype about? It’s the Baby Boomers - the over 78 million Americans born in-between 1946 - 1964. They currently make up 26% of the US population and today are between the ages of 43 and 61. The generation is aging and looking toward retirement. Just this past October, America’s “First Baby Boomer,” Kathleen Casey - Kirschling filed for Social Security Retirement Benefits. Kirschling was born one second after midnight on January 1, 1946. She will be eligible for her benefits beginning January, 2008. According to the Social Security Administration, over the next two decades nearly 80 million Americans will become eligible for Social Security. That’s more than 10,000 people per day!

So what does this have to do with selling your business? Currently, most small and medium size businesses are owned by Baby Boomers. Baby Boomers own 12 million private companies totaling a value of ten trillion dollars. Over the next ten years, 65% of those who own small and medium size companies will transition out of their businesses. The majority of these are Baby Boomers looking to retire. About 33% of business owners will convey their business to their children; however, these days most business owners’ children have no desire to take over the family business. Which means the number of businesses available for sale will far exceed the number of available buyers, and will saturate the market place of businesses for sale.

Not only would it make sense to sell your business before you get caught up in the flooded market place of small businesses, but now is the perfect time to do so.
In today’s market place there are several advantages for those looking to buy businesses, which in turn will help business owners sell. For instance,

•There is plenty of money available for financing through banks and private lenders;
•Borrowers can get low rates with good terms;
•Labor shortages will only get worse in the future; and,
•Currently, there is a lot of activity in the mergers and acquisition area.

So how do I sell? Plan, Plan, Plan!

The first thing to ask your self is “Do I have an exit or succession plan?” If you answered “no” to this question, you’re not alone. Eighty-five percent of small and medium size business owners do not have an exit or succession plan in place; and 65% don’t know what their business is worth. A succession plan will help you to transition out of your business more smoothly and guide you in preparing for your future.

The sooner you develop a plan the better. First, you need to have a valuation prepared to determine the fair market value of your business. Once you’ve done this, you’ll have a better idea of what the plan for your future will entail. If you find that the value of your business is considerably lower than anticipated, take time to enhance your business to increase its worth prior to sale. We have business valuation professionals with decades of experience helping both selling and buying clients determine the values of their businesses.

An exit or succession plan not only helps guide you in determining the best route for you and your business, but also prepares you in the unfortunate instance of death, disability or temporary absence. Baby Boomers are said to be dying at a rate of around 1,500 per day. If you have a plan in place, you make it easier for family members and others involved in your business should something unfortunate happen to you.

The bottom line is, to get the maximum value for your business, you have to start planning NOW! There’s no better time than the present to prepare for your future. If you need assistance in developing your exit or succession plan for your business, we are happy to help; or if you have any questions or need more information, feel free to give us a call.

Reprinted by permission of Winter, Kloman, Moter & Repp, S.C.
Certified Public Accountants