Summary: Built to Sell

Review and Analysis of Warrilow's Book

BusinessNews Publishing

• Publisher: Must Read Summaries
• Year: 2016
• ISBN:
  9782511022344
• Topic: Commerce
• Subtopic: Petite entreprise

The must-read summary of John Warrilow’s book: “Built to Sell: Creating a Business that Can Thrive Without You”.

This complete summary of the ideas from John Warrilow’s book “Built to Sell” shows how difficult it can be for business owners to become less involved in their business. In his book, the author explains an eight-step process that entrepreneurs can use to ensure that the business can run without them and become a valuable asset that can be sold. By following this plan, you can increase the value of your business and ensure it is successful in its own right.

Added-value of this summary:
• Save time
• Understand key principles
• Expand your business knowledge

To learn more, read “Built to Sell” and follow the eight-step process to make your company more independent and a high-value asset.

Summary of Built To Sell (John Warrillow)

1. The Problem

Lots of business builders go into business because they love doing something and are good at it. They therefore end up creating a company which takes full advantage of their talents and interests. This is all well and good and if you do that you can end up making good money, but having a company which is totally reliant on your talents and input becomes a problem:

• When you want to retire and would like to cash out on all of your efforts over the years to create a viable business.
• When you want some cash to start another business which looks interesting but the only major asset you currently own is the business you’ve built.
• You need cash to deal with a personal financial matter of any significant shape or size.
• You want more time to pursue your other interests and would like to have less hands-on involvement in the day-to-day running of your business.
• You want the security and peace-of-mind which comes with knowing you could sell your business tomorrow if you wanted to or needed to.

If that’s the case, then the key to resolving your problem is to restructure your enterprise so it will run and make money without yourconstant hands-on involvement. In other words, you need to build a business which will function without you being there to generate all the deals, follow through and see everything is done and be the chief mover and shaker behind everything that happens.

“When a service company is sold, the owners typically get some money up front and the rest of their money is contingent on hitting performance targets in the years ahead. It’s called an earn-out, and often the owners need to stay on for three years or more to get their money. During those years, a lot can happen that makes it difficult for the owners to meet the acquiring company’s performance goals. In an earn-out, you put a significant amount of what your company is worth at risk. An earn-out is almost always a disappointment for an entrepreneur. You’ve assumed most of the risk and the acquiring company gets most of the reward if you’re successful. Acquiring companies use an earn-out formula to buy a business when they know the founders are the business.”

– John Warrillow

“Many business owners find themselves trapped in an unsellable business. Customers ask to deal with the owner, the owner becomes personally involved in serving the customer, reinforcing the customer’s reliance on the owner, and the cycle continues. A business reliant on its owner is unsellable, so the owner becomes trapped in the business. The eight steps provide a road map for creating a company that can thrive without you. Once your business can run without you, you’ll have a valuable – sellable – asset.”

– John Warrillow

1. Isolate the right product

Identify a product or service you sell which has the potential to scale without your hands-on involvement

The first step in creating a business which can thrive without you is to identify a product or service you can sell which has the potential to scale. Genuinely scalable products or services meet three key criteria:

1. Scalable products are teachable – you can train your employees to deliver them rather than being the only person in your firm who can deliver the products and services your customers are buying.
2. Scalable products are valuable – they are something your customers will pay for because they solve a problem which costs them good money.
3. Scalable products are repeatable – customers need to return again and again to buy more. Also, you don’t have to set up customized production lines but can deliver using your established production capacities and operations.

You can look at your existing business and figure out which of the products and services you offer at the present time best match these three criteria. Coming up with the ideal offering in this step is sometimes difficult because when you dig deeper, you might find most of the products you currently deliver customers buy only once, or the teachable products you offer are the ones your customers value the least. In order to create a business built to sell, you’ve got to come up with an ideal offer...