In our first Fix It or Flip It Blog #1 we answered the question, “When Should You Sell a Business?”
The next blogs in this series will address “Fix It Issues”. The significant “Fix It Issues” that we will address in this series include:
- Additional Investment,
- Defining the Problem,
- Building a Team, and the
- Risk associated with Fixing It
In this blog, we consider additional Investment. The “Fix It” decision will require additional investment. If you are not ready to make additional commitments the remaining “Fix It” discussion becomes irrelevant and it is likely time to consider the “Flip It” option.
However, the real drivers are the non-financial investments required to fix your business. Let’s discuss a couple types of these non-financial investments, modern technology and additional years of commitment.
The technology that many businesses depend is changing rapidly. In some cases, it is necessary to remain relevant using social media or the latest ways to market and reach out to your customers. Perhaps, you need an AP? In some industries change may be required by regulations, such as GPS tracking in the trucking industry.
It may seem that these are not big deals or that the owner can hire a millennial to implement these technologies. We contend that any attempt to abrogate the responsibility of understanding these changes is likely to backfire on the business owner. If you are not involved, investing time and energy, with these significant changes they are not likely to meet your expectations. Just ask yourself if any process in your business ever worked without your total commitment.
In all cases the “Fix It” scenario requires time. It will take time to identify the problems, implement the changes and then time to run your business to reap the benefits of the change or at least for the improvements to pay for themselves. If you do not have the enthusiasm or desire to run your business for additional years, three to five years, “Fix It” may not be the solution.
Some of you are not ready to put additional money into your business. Others are not ready to learn and implement modern technology. We have also met many business owners that are hanging in there trying to fix their business, but dreading the need to go to work every day. If these describe you the “Fix It” may not be appropriate and it is time to investigate the “Flip It” option.
Molliter Advisory is a boutique M&A firm that works with small-to-medium sized companies to value, market, negotiate and bring to close the transactions of their clients. Their deal sizes range from $500K to $20 million sales prices. This is the second blog in a series titled “Fix It or Flip It”. This series will address other high-level issues that business owners face when considering a transition plan. Molliter also has a short presentation on this subject that can made to your team or organization.