Welcome back to my weekly articles on business building. In order to extract value from a business it needs to be sellable. Businesses that are efficient and deliver value to their customers are attractive to buyers. In my last article I spoke about the importance of Standard Operating Procedures (SOPs). In this article I provide an overview of the basics steps in writing effective SOPs. Effective SOPs will lead to enhanced efficiency, higher quality delivery of goods and services, they will set a business up for scalability, will mitigate risk, will limit institutional knowledge loss, and will create salable value, all of which provide for a smoother transition to new ownership which will not jeopardize future success and profitability, should the business be sold.
Most owners get one chance to get it right when they decide to sell, yet most owners cannot sell the business they built (only 1 in 10 are successful) because they did not build a sellable asset. If selling your business to fund your future lifestyle is a must, ask yourself whether you are prepared or not, and then identify what you need to do to get to where you need to be.
With up to 76% of Canadian businesses reporting that they hope to exit in the next 10 years, being unprepared might cost you both your legacy and your retirement.