Advantages of Owning a Sellable Business

Yesterday I spoke about the experience many of my Greek friends had with owning a family restaurant in the 1970s and 1980s.

The biggest issue is that the restaurant business was mostly a cash business then and my friend’s parents found it difficult to hire people they could trust to manage the business in their absence.

As a result, the restaurants were dependent on the owners.

And so the restaurants had no value outside of the owners and whatever physical assets they contained.

Which is why many only sold for the value of their hard assets and why the children grew up wanting to do anything else except take over and own the restaurant – which provided good money but was a 24/7 365 day job at best.

What does that mean for you? 40 and 50 years later?

It means there are some huge advantages and strong arguments why you want to create a sellable business – today. Even if you don’t have any intentions to sell soon.

Why?

Financial Stability
A sellable business, by definition, has more consistent and predictable revenues with clear growth paths ahead.

So even if you are not selling soon, you will benefit from consistent cash flow that you can better invest and manage your business – and avoid the valleys and troughs of revenues and profits that spike up and down.

Furthermore, when it does come time to sell, you’re likely to receive a lump sum payment that can provide you resources to pursue other interests or even retire. It’s like having a financial safety net that can give you peace of mind knowing that you have money set aside for whatever the future holds.

Return on Investment:
Your business is often your most risky and opaque asset you own. It can offer a significant return on investment, but only if you are able to sell it at your price and terms.

Here’s the thing. You never know when an opportunity may present itself, so you want to build from now a business that can sell at a price that represents a substantial return on your investment.
I’ve seen cases where people have been approached by keen buyers who then walked away because the business was profitable, but not in a position to be sold. That can sometimes be millions walking out the door – often never to return or at a much lower value.


Lifestyle Flexibility:
Running a business can be all-consuming, taking up much of your time and energy. When you own a business that you could sell, however, you are free to explore other options and enjoy more lifestyle flexibility. You could take time off to travel, volunteer in your community, or pursue a hobby that brings you joy.

You’re able to do all these things because a sellable business is an independent business. It has the processes, systems and teams in place to run the day-to-day business so you are free to spend your time where, when and how you want.

Successful Legacy
Building a business is no small feat, and it’s an accomplishment to be proud of. When you own a sellable business, you have one that is also much easier to pass down to your children – and which they would be happy to own.

So as you can see, having a sellable business means a more profitable, valuable and enjoyable business to run.

But to the first step? Knowing when you own a business that is sellable or not.