This is the second post in this series. In our prior post, we looked at what a lifestyle business is, why it’s hard to sell and what are the characteristics of a saleable business. This post is going to focus on how to transition from a lifestyle business to a sellable business.
If you’re currently running a lifestyle business but plan to sell in the future, here are steps to help you make the shift toward a sellable model:
- Document Key Processes: Standardize and document key operational tasks. This ensures that as the business grows, new employees can be trained efficiently without placing too much strain on the business or you.
- Build a Capable Team: Hire and develop a strong team that can manage the business without your constant involvement. A cohesive, aligned, and motivated team focused on the company’s goals will contribute to its long-term success.
- Diversify Revenue Streams: Minimize dependency on a single client, product, or market. Ideally, no one client should account for more than 15% of total revenue, as this level of concentration introduces risks that could deter potential buyers.
- Prioritize Scalability: Create systems and strategies that enable growth without increasing dependence on you. Well-defined processes and team disciplines ensure consistency, quality, and the ability to scale operations efficiently.
- Develop a Standalone Brand: Build a brand identity that is independent of your personal name or reputation. If your business’s success is too closely tied to you, it may be harder for potential buyers to envision it thriving without you. A brand tied to an individual creates several challenges:
- Transferability: Buyers prefer businesses that can operate without the owner. If the brand is linked to you, they may fear losing customers who associate the business with your personal presence.
- Customer Perception: The departure of the owner might cause customers to question the business’s quality or reliability, decreasing its value.
- Scalability: An owner-centric brand may struggle to appeal to a broader audience, limiting its growth potential.
- Marketing Difficulties: Rebranding after the sale can be costly and time-consuming, complicating the transition for new owners.
Focusing on developing a brand that emphasizes the business’s unique value, products, or services—not the owner—makes it more attractive to buyers and strengthens its long-term potential.
If you can execute on this plan, you have just massively increased the value of your business and increased the likelihood of a successful sale. We would love to connect with you on how we can help – please reach out.