Around the Web: A Week in Summary
A recent article posted on the Axial Forum entitled “Is a Third-Party Sale Really the Best Exit Path?” explores third-party sales and their efficacy across different situations. Statistics show that 59% of owners looking to sell their businesses in the short to medium term favored a third-party sale over all other types of sales, but the truth of the matter is that sometimes this option isn’t always the best option. Although third-party sales seem to be the most common and most highly desired by sellers, each business has its own strengths and weaknesses that may not be best suited for this type of sale.
The article goes on to explain the various advantages and disadvantages of a third-party sale, while stating that the only real way to know what is best for any particular business is to build an exit-planning advisor team that will help to develop the best course of action.
A recent AllBusiness.com article entitled “Buying a Business? 5 Essential KPIs You Need to Review Before You Buy” explores five essential Key Performance Indicators (KPIs) for a potential buyer to review before buying a business. These KPIs are important because they help to measure the success of a business on a very high level, which can help a prospective buyer understand where a business stands against their goals but also where they stand among their competition. Important KPIs to understand include:
- Customer Acquisition Cost
- Customer Retention Rate
- Profit Margin
- Employee Turnover
While these are just a few of the many different KPIs that can be measured and tracked, they are some of the most important to know for anyone looking to buy a business. Understanding these numbers will give a buyer important insight into whether a business is on par with the competition, while also giving them the ability to make a personal judgement about whether or not an opportunity is worth pursuing.
A recent article posted on Inc.com entitled “Maintaining Business Value When a Company Leader Leaves” explores the available options in situations where a prominent member of a small business leaves the company. The loss of such a valuable contributor to the business can take an emotional toll on the workforce, but can also negatively affect business value: revenue streams and profitability can take a hit during this process. While a leader’s absence may be noticeable, there are steps to take to ensure a smooth transition to business as usual without them. Some of these steps include, but are not limited to:
- Create a transition plan
- Document knowledge
- Focus on core business functions
- Calm the workforce
- Reassure customers
- Identify the reason for the exit
Following the example above can not only promote confidence of a smooth transition among management and other leaders, but help to assure current employees and customers that much of the process has been accounted and planned for. Leaving no stone unturned can not only provide emotional security, but financial stability as well in the long run.