The ultimate test to determine if you own a valuable “business” or just have a “job” can be found in a simple question: would someone want to buy your company?
Would your customers continue to do business with the company (and its new owners) after you are gone? In other words, will the revenues and discretionary cash flows generated by the business continue after your departure? This is a major issue for many smaller personal services businesses that have few, if any, employees and are very dependent on the owner(s) for generating business and performing specialized services.
If you are planning to one day sell your business you should address this issue now to understand what, if anything, must be done to turn your “job” into a salable “business”. Whether you want to sell next year or a decade from now, you must build an asset someone would buy – otherwise, you have a job, not a business.
Here are eight ways to ensure you are building a salable business and not just doing a job:
1. A job requires that you show up at work to make money, whereas a business generates revenue whether you are there or not.
2. If your company is so reliant on a single customer that they can dictate how you deliver your product or service, your company is more like a job than a valuable business.
3. A job is a place where your personal reputation impacts your results, whereas a business is a place where the brand is more important than the personality of the founder(s).
4. A job requires you to use your personal experience and expertise to get a result, whereas a business is a place where a process – not a person – consistently produces a desirable result.
5. In a job, you get fired for taking too much vacation, whereas if you own a business, the more vacation you can take without impacting your company’s performance, the more valuable your business will be.
6. In a job, the harder you work, the more money you earn. In a business, the smarter you work, the more money you earn.
7. In a job, you solve the problems. If you own a business, your employees solve the problems.
8. If the majority of your customers know your personal phone number, it’s likely you have a job, not a business.
If you are unsure as to the extent to which you own a valuable “business” or just have a “job”, you should get your Sellability Score. Whether you are looking to sell now or in a decade, the Sellability Score assessment allows you to see your business as a potential buyer would see it and to identify areas to focus on continue building a salable business.
Complete the Sellability Score questionnaire at www.sellabilityscore.com/vsp/jason-kwiatkowski and we will send you a summary report showing just how your business stacks up on the “job” versus “business” issue.