How to Build a Sellable Business

Author: tracysigler | Posted: May 12th, 2011 | | Tags: , , , | No Comments »

Would anyone in their right mind consider buying your business if you wanted to sell it? Would they still buy it if you were not going to be a part of the package?

Probably not, unless you’ve managed to build a business that can thrive without you. Some would say that until your business can run without you that you just have a job, not a business, with the worst possible boss, yourself.

John Warrillow, author of Built to Sell, has started and exited four businesses and lived to tell about it. I became aware of Warrillow and Built to Sell in 2010 when the first edition of this book was published. Unfortunately, I didn’t get Built to Sell at that time because of a growing backlog of business books in my office. Fortunately, I did start to follow Warrillow’s blog and email newsletter. On an E-Myth podcast I heard Warrillow explain the three core tenets of creating a “sellable business.” The product must be:

  • Teachable
  • Valuable in customers’ minds
  • Recurring / consumable

No kidding, I’ve had those three things scrawled on the whiteboard next to my desk for almost a year. AND I did buy the latest version of the book, which has been changed to focus on “Creating a Business That Can Thrive Without You.” I’ve just started reading Built to Sell but here are the high level things I’ve already learned from John Warrillow.

Sellable businesses have products that are:

Teachable
This is also a main concept in the E-Myth Revisited. You must be able teach others how to deliver your product, service, or product-ized service if you plan to build a scalable and sellable business. That means creating processes and documenting them thoroughly in some form of “operations manuals” ( to use E-Myth nomenclature). The folks at our company rely on a growing intranet to create marketing programs.

Valuable in Customers’ Minds
Usually, the things that customers will value most are the least teachable, or are made of unobtainium. You’ll have to look at your current competencies for things that fall in the sweet spot of teachable but highly valuable. Maybe it’s something you’re uniquely able to teach to your staff and that could be your competitive advantage.

Recurring / Consumable
Think razor blades, not razors. What products can your business create that will be the foundation for profitable long term relationships with your customers? Obviously, any kind of subscription product fits this description. I’ve seen firsthand how changing the business model to where the vast majority (80% +) of the revenue was coming from subscriptions had the effect of doubling then tripling revenue within just a few years. And this was for a well-established company already doing eight figures a year in revenue.

OK, there’s something you can put on your whiteboard. I’m going to finish the rest of Built to Sell this week and report back what I’ve learned.

P.S. I’m going to be on a conference call with John Warrillow himself a week from today. I have to say I’m pretty excited, and will definitely share what I learn from that. If you have any questions I can ask please post away.

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