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Selling your business

Imagine being able to write this letter to your prospective buyers!

(Our example below is of a real estate firm)

Dear Prospective Purchaser,

 When we started this business we wanted it to be an investment not just a job. We wanted it to grow in value as you would expect any investment would, we wanted the growth to reflect a fair appreciation of the dollar amount that we have invested plus an amount that would reflect the risk involved. Not to mention normal wages if we were also employed in the business.

In order for that to happen we realised that it had to be an entity in its own right, it had to function separately from ourselves. We didn’t want it to rely on personalities, as they may come and go. Instead we wanted it to succeed based on a structured format.

In essence we have viewed ourselves as shareholders of (xyz real estate).

Our first step in creating ( xyz real estate ) was to look at what we would have to achieve in order to be successful.

In other words

 “What do we need to be competent at (good at) to be successful in this type of business”

Much of this information was gained from looking at successful businesses both locally and elsewhere to form a picture of what makes these businesses stand out.

Our conclusions led us to believe that the following broad areas are the ones that should demand our utmost attention. Some are unique to our industry others like Accounting, Financial Management and Staff Management are common to many industries. Whilst these are not unique to our industry, management of these we consider crucial to our success.

 

  • SALES
  • PROPERTY MANAGEMENT
  • MARKETING
  • ACCOUNTING
  • STAFF MANAGEMENT
  • FINANCIAL MANAGEMENT
We then broke each of these down in to more specific areas such as:
  • Gaining New Business
  • Selling
  • Property Marketing
  • Auctions
  • Negotiations

PROPERTY MANAGEMENT

  • Gaining new business
  • Leasing
  • Arrears Control
  • Maintenance
  • Correct Paperwork

To ensure that we didn’t just pay lip service to these needs we created roles within the business that would be accountable for each of the key areas.

For example :
SALES Sales Manager
Gaining new business Salesperson
Selling “
Property Marketing Marketing Secretary
Paperwork Sales Secretary
PROPERTY MANAGEMENT Property Manager
Gaining new business Rental Clerk
Leasing Rental Clerk
Arrears Control Rental Clerk
Maintenance Maintenance Clerk
Paperwork Rental secretary

 

A job description was written for each role which clearly defined the duties and responsibilities.

Overall we found that we had (30) roles to fill and only (7) staff to fill them but this is not a problem as we find that one staff member can have multiple roles and as the business gets larger additional staff can be employed to wear the burden. So in reality as the business grows the roles don’t change its just the people who are doing them.

For example:

As in the above example, when the business gets larger it may mean that becomes a full time Sales Manager and we employ a new person to take on the role of a Salesperson.

Our business has become role based not personality based.
At this stage we know what are the key areas of our business and we also know who will be responsible for them.
This only leaves the question of how we do it!
We then created the business format i.e..
STAFF MEMBER ACCOUNTABLE ROLE
Peter Sales Manager
Salesperson
Anne Property Manager
Arrears Clerk

 

“This is how we do business”

Under the broad and more specific key business areas we then looked at functions that would be undertaken on a daily, monthly and quarterly basis etc.
We asked ourselves these questions:
  • What do we need to do ?
  • How do we do it ?
  • When do we do it ? and
  • Which role will be doing it ?
To help us formulate these functions we used the key business areas as our guide.
Key Business Area Policies & Procedures How we do it When we do it Which Role?
Sales
Prospecting Door to door see manual Ongoing Salesperson
Sales Sales process see manual Ongoing Salesperson
Appraisals Appraisal process see manual Ongoing Salesperson
Auctions Auctions process see manual Ongoing Auctioneer
Open for inspections Conducting open for inspections see manual Weekly Salesperson
Property Management
Arrears Control Arrears process see manual Daily Property Manager
Leasing Leasing & marketing see manual Daily Rental clerk
New Business Prospecting methods see manual Ongoing Rental clerk
Maintenance Handling maintenance issues see manual Weekly Salesperson

 

By doing this eventually we had created a  policies and procedure manual which would become the structure and format of our business.

The manual is unique in that it not only describes what to do but using flow charts and images it gives a quick visual reference.
TKO Business Modeller will help you create the ideal business
It’s a tool to help a business owner create a complete plan or format for managing and operating their business.

Ultimately they can say “This is how we do business”