How do you boost the ‘transferability’ of your business?
No matter how valuable your Amazon business is, if it isn’t transferable, you can never sell it to a new owner.
And while not everyone starts a business to sell it to a new owner, later on, selling is a nice option to have. The ease with which a business could be run by someone other than its current owner or team is determined by its transferability. Would it be an easy operation or a disaster if someone new took over tomorrow?
The more transferable a business is, the more valuable it is to a potential buyer. So here are five key ways to improve the transferability of your Amazon business and increase your chances of profitable sales one day.
Consider a guacamole company that relied on a “secret recipe” known only to the owner, who kept it locked up in a safe only they knew the key to, only to die tragically without passing the recipe on.
Even if this company made millions of dollars per year, it would have no transferable value because it relies on the owner. You may not be dealing with such a dire situation, but you should still make a concerted effort to disseminate your knowledge to your employees and keep everything in writing.
Of course, disseminating knowledge to employees is only beneficial if those employees remain with you. Buyers are drawn to a devoted team capable of guiding a new owner through the transition period.
You can’t force your employees to stay, but you can incentivize them to do so by making sure they like the company culture and have a good salary. Set up some meetings and get your work done.
You can’t predict the future or control your employees’ decisions, no matter how dedicated they are to your company or how well you treat them. What you can do, however, is develop a thorough onboarding process and training manual to increase the likelihood that any new hires will be as good as your current team.
If the main selling point of a product or service is that Kylie Jenner runs the company, what happens if Kylie Jenner leaves the company? Chaos.
Don’t panic if you’ve built a business around your brand; instead, start the process of transitioning to a new company identity.
Which vendors do you purchase from? Do they have a strong bond with you? What impact would a new owner have on your current business relationship?
Before you try to sell your company, make sure that the deals you have in place will still apply to a new owner. Otherwise, your business model and profit margins may suffer significantly.
You’re probably curious about how assignable and valuable your company is; whether you’re ticking off a mental checklist knowing you have already met most of the criteria outlined above or if transferability is a brand-new concept to you.
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