Build It Like You Are Going To Sell It

Build It Like You Are Going To Sell It…and here are some reasons why…

I have the privilege of working for companies across the country and in Canada via my consulting company, The Clendenin Consulting Group. We are also in the M&A business and doing very well in that area, successfully representing sellers from start to finish and having everyone leave the closing table feeling good about the whole process and result. However, consulting for companies to assist them into exponential growth year over year and seeing the majority of that increase in revenue drop to the bottom line is just as rewarding. This kind of work also brings a much better purchase price to the owner should the owner decide to sell. We have that unique experience of having built one of the largest pest control companies in the country before selling it and doing so without any acquisitions, i.e., all organic growth. That is unique. That translates into our consulting work being unique. Although growing by acquisition is a good strategy if you are good at integration and you have the financial wherewithal to do so, growing organically has less risk than growing by acquisition. There are times to be in the acquisition mode and to grow organically at the same time. There are times to focus solely on organic growth, also.

One of the things that I recommend to our clients is to build your company as if you are going to sell it one day, even if that day is many years down the road or even if selling is not part of your exit strategy. Here are some things I highly recommend and some reasons why I recommend these things:

• Do things according to established and documented systems, policies and procedures. Buyers like a company with good systems and procedures. Good systems and procedures are important in a company being able to scale up. They prevent a company from making the same mistakes over again. Systems are the scar tissue of past failures. The reason I was able to take our company from $8 million to $35 million in nine years with no acquisitions was for many reasons and one was we built systems, policies and procedures along the way.
• Establish key metrics, key performance indicators and benchmarks. Watch my webinar for more on this: [PCT Webinar]
• Account for revenue appropriately in your financials and measure the different lines of business you have. Use the accrual basis of accounting to do this. For more information on accrual accounting and other important accounting issues go to: Suggested Financial Practices to Build Your Company.
• Achieve good customer retention and measure this up against benchmarks.
• Achieve good employee retention
• Grow year over year (YOY) and preferably at an exponential rate YOY.
• Have a clear way to track how much you as the owner take out of the business by way of passing costs to the business such as personal payroll, health care, personal vehicle, etc. Any and every cost that goes away when you sell the business.
• Create a good culture, i.e., who you are, what you believe in and how you get the work done.
• Operate in the light of a strategic principle such as The Golden Rule.
• Create a good work environment which is made up of at least the following:

o The facility
o Benefits
o Compensation
o Work hours
o Training
o Equipment
o Safety
o How the manager treats employees
o How the employees treat each other

• Teach managers their major management accountabilities and how to achieve success in each one:

o Facility management
o A good work environment
o Team member development
o Growth
o Profit
o Asset Protection
o Customer service
o Corporate image

• Have good cost control systems in place, especially around your variable costs such as materials and supplies, payroll and vehicle costs.
• Have a strong and robust sales force relative to the size of your company. Exponential growth requires strong sales performance along with good customer retention.
• Have a good pricing strategy.
• Use a reliable accounting software.
• Use a reliable customer management system.
• Build your company primarily on recurring revenue.
• For more information or a confidential, no-obligation conversation, contact us at:
  Email: gc@clendenincg.com Text: 407-948-0897 You will receive a prompt response.