We’re going through a series of questions to prepare for selling a privately-owned business. Okay, it’s time for some serious realism. How attractive is your business, and, while we’re at it, what’s wrong with it? Tell me about its good and bad points.
We’ve all done SWOT analyses: strengths, weaknesses, opportunities and threats. That’s all this is. Just a word of caution though. You need to be specific. I’m fairly sceptical about most SWOT analyses. For example, nearly every company lists one of its strengths as something along the lines that “we’ve got great people”. Actually most companies have great people, because people are mostly great (I’m very uncynical about that) so where’s the strength here? What are we really talking about? Likewise, people can be both over-critical and under-aware about weaknesses (listing every minor thing that could be improved while ignoring big problems like weak people in key roles).
We can explore whether or not opportunities should be addressed before sale, or promoted as part as part of the sale.
Threats are particularly important (e.g. being unable to renew a major contract or losing key staff). They increase the reasons to sell, but may also need addressing because they could scupper the sale. Say nothing? I’m not a fan of the bigger fool solution; i.e. that there’s a bigger fool than you who’ll buy that dog off you. You don’t think a business buyer isn’t as smart as you and not going through exactly the same analysis? Far better to have fixed or minimised the problem or have identified why it won’t be a problem for the potential buyer if they ask you. Selling a business is no different to any sales process. You have to plan how to handle the likely objections.
Okay, let’s review this SWOT analysis again. What’s worth spending time and effort on and what is just normal noise? We’ll come back to this in question 11 - “What can we do to improve your business attractiveness?” What shall we do to magnify the strengths and opportunities and eliminate, minimise or ignore the weaknesses and threats. But I’ve got some other questions we need to answer first. More soon.
First posted July 22nd, 2008
We’ve all done SWOT analyses: strengths, weaknesses, opportunities and threats. That’s all this is. Just a word of caution though. You need to be specific. I’m fairly sceptical about most SWOT analyses. For example, nearly every company lists one of its strengths as something along the lines that “we’ve got great people”. Actually most companies have great people, because people are mostly great (I’m very uncynical about that) so where’s the strength here? What are we really talking about? Likewise, people can be both over-critical and under-aware about weaknesses (listing every minor thing that could be improved while ignoring big problems like weak people in key roles).
We can explore whether or not opportunities should be addressed before sale, or promoted as part as part of the sale.
Threats are particularly important (e.g. being unable to renew a major contract or losing key staff). They increase the reasons to sell, but may also need addressing because they could scupper the sale. Say nothing? I’m not a fan of the bigger fool solution; i.e. that there’s a bigger fool than you who’ll buy that dog off you. You don’t think a business buyer isn’t as smart as you and not going through exactly the same analysis? Far better to have fixed or minimised the problem or have identified why it won’t be a problem for the potential buyer if they ask you. Selling a business is no different to any sales process. You have to plan how to handle the likely objections.
Okay, let’s review this SWOT analysis again. What’s worth spending time and effort on and what is just normal noise? We’ll come back to this in question 11 - “What can we do to improve your business attractiveness?” What shall we do to magnify the strengths and opportunities and eliminate, minimise or ignore the weaknesses and threats. But I’ve got some other questions we need to answer first. More soon.
First posted July 22nd, 2008