The Key Competencies of a Marketing Plan

The Key Competencies of a Marketing Plan and How It Should Complement Your Sales Plan - Blog post by Rizolve Partners

A marketing plan encompasses several key competencies that are crucial for its success. These competencies help guide the overall strategy, execution, and evaluation of marketing initiatives to drive business growth.

Here are the essential competencies found in a comprehensive marketing plan:

Market Research

Conducting thorough market research is essential to understand your target audience, market trends, competitors, and consumer behaviour. This involves gathering data, conducting surveys or interviews, analyzing industry reports, and staying updated on market dynamics.

This competency helps identify opportunities, define target segments, and develop effective marketing strategies.

Target Market Segmentation

Identifying and segmenting your target market allows you to tailor your marketing efforts to specific customer groups. This involves categorizing customers based on demographics, psychographics, behaviours, or other relevant criteria to create personalized marketing messages and strategies.

This competency helps to develop a clear positioning strategy that differentiates your product or service from your competitors that resonates with your target audience.

Marketing Objectives and Goals

Setting specific, measurable, achievable, relevant, and time-bound (SMART) marketing objectives is crucial.

This competency involves establishing clear goals that align with your overall business objectives, such as increasing brand awareness, driving sales, expanding market share, or improving customer retention.

These objectives should provide a framework for evaluating marketing performance.

Marketing Strategies and Tactics

Developing effective strategies and tactics is essential for achieving your marketing objectives.

This competency involves determining the best approaches to reach your target audience, such as through advertising, public relations, digital marketing, content marketing, social media, events, or partnerships.

Branding and Communication

Developing a strong brand identity that reflects the company’s values, personality, and value proposition is essential to establish a favourable brand image.

This competency involves defining your unique selling proposition (USP) and unique value proposition (UVP). Upon determining these, craft compelling messaging and communication strategies to engage and connect with your target audience across various channels.

Your USP describes the unique advantage your product or service offers over competitors. Your UVP explains why a customer should care about that difference and why they should buy from your business instead.

Digital Marketing and Online Presence

Leveraging digital channels and platforms to reach and engage with the target audience effectively is a critical component of a marketing plan.

This includes website optimization, search engine marketing (SEM), social media marketing, content marketing, email marketing, and other digital strategies.

Budgeting and Resource Allocation

Allocating resources and establishing a marketing budget is crucial to ensure your plan can be executed effectively.

This competency involves estimating costs associated with all planned marketing activities, prioritizing investments, and tracking expenses to maximize the return on investment (ROI).

Implementation and Execution

Successful marketing plans require proper execution. This competency involves effectively coordinating and implementing marketing campaigns, initiatives, and activities across various channels and touchpoints.

It includes managing timelines, coordinating teams, and ensuring consistency in messaging and branding.

Performance Measurement and Analytics

Monitoring and measuring the performance of your marketing efforts is essential to evaluate the success and impact of your strategies.

This competency involves tracking key performance indicators (KPIs), analyzing data, using marketing analytics tools, and making data-driven decisions to optimize your marketing activities.

Adaptability and Continuous Improvement

A marketing plan should be flexible and adaptable to changing market conditions and customer needs. This competency involves monitoring market trends, staying updated with industry developments, gathering customer feedback, and continuously refining your strategies.

These competencies may vary depending on the nature of the business, industry, and specific marketing objectives.

However, a well-rounded marketing plan combines these elements to create a cohesive and effective marketing strategy that helps achieve business growth and success.

The Key Competencies of a Marketing Plan - Article by Rizolve Partners

Your Marketing Plan Should Complement Your Sales Plan

A marketing plan and a sales plan are two components of a business strategy that work together to drive revenue and achieve goals.

While the marketing plan focuses on creating awareness, generating leads, and nurturing customer interest, the sales plan focuses on converting leads into paying customers.

Here’s a closer look at how these plans complement each other:

Alignment of Goals and Messaging

A well-designed marketing plan and sales plan should be aligned and integrated to ensure a cohesive customer journey. Marketing efforts, such as advertising, content creation, and lead generation, should be designed to attract and qualify leads that are more likely to convert into sales.

The sales plan then takes over to engage and convert those qualified leads into customers through personalized selling strategies. The messaging and positioning developed in the marketing plan should seamlessly transition into the sales process, ensuring consistency and reinforcing the value proposition to potential customers.

Lead Generation and Qualification

The marketing plan plays a crucial role in generating leads for the sales team. Through various marketing activities such as advertising, content marketing, social media, and lead generation campaigns, marketing efforts can attract potential customers and nurture them through the sales funnel.

This includes providing valuable information, addressing pain points, and building relationships with prospects until they are ready to engage with the sales team.

The sales plan utilizes these marketing-generated leads and further qualifies them through direct sales interactions, understanding their specific needs, and offering tailored solutions.

Market Intelligence and Customer Insights

Marketing activities provide valuable market intelligence and customer insights that can inform the sales process. By analyzing data from marketing campaigns, customer interactions, and market research, companies can better understand their target audience’s preferences, behaviours, and pain points.

This information can be shared with the sales team to tailor their approach, identify opportunities, and provide a more personalized sales experience.

Sales Enablement

A well-designed marketing plan supports the sales team by providing them with the necessary tools, resources, and collateral. This includes creating sales presentations, product brochures, case studies, and other materials that align with the marketing messaging.

The marketing plan should also involve training and educating the sales team about the target market, buyer personas, and key selling points to enhance their effectiveness

Having a Scalable Sales Process Before Investing in Sales Acceleration

While marketing efforts can generate leads and create awareness, it is crucial to have a reliable and scalable sales process in place to effectively convert those leads into customers.

Here’s why this is important:

Efficiency and Optimization

Without a scalable sales process, companies risk inefficient operations, missed opportunities, and inconsistent results. Establishing a scalable sales process involves defining clear sales stages, documenting best practices, setting performance metrics, and implementing sales automation tools.

By establishing a well-defined and repeatable sales process, organizations can optimize their sales operations, improve conversion rates, and ensure that they can handle increased sales volume effectively.

Resource Allocation

Investing in sales acceleration without a scalable sales process can lead to inefficiencies and wasted resources. If your sales process is not well-defined or lacks scalability, scaling up the sales team or increasing marketing efforts may result in leads falling through the cracks. This could result in inconsistent customer experiences or overwhelmed sales representatives.

A scalable sales process allows you to allocate resources effectively and make informed decisions about scaling up or investing in sales acceleration initiatives.

Enhanced Customer Experience

A scalable sales process ensures consistency and quality in customer interactions. It enables the sales team to provide a seamless and personalized experience, deliver value, and address customer needs effectively.

This, in turn, enhances customer satisfaction, increases repeat business, and generates positive referrals.

Performance Evaluation

Accelerating sales efforts without a scalable sales process can lead to challenges in managing increased workload, maintaining quality, and ensuring a consistent customer experience.

A scalable sales process provides a framework for tracking and evaluating sales performance accurately. It allows you to measure key sales metrics, identify areas for improvement, and make data-driven decisions.

By establishing a scalable sales process early on, companies can confidently scale their sales efforts, onboard new sales representatives smoothly, and handle increased demand without compromising quality.

A marketing plan and a sales plan should work in harmony to drive revenue growth. However, it is wise for companies to ensure they have a scalable sales process in place before significantly increasing sales spending.

This foundation enables efficient resource allocation, optimization of sales operations, and accurate performance evaluation, ultimately setting the stage for successful sales acceleration initiatives.



Rizolve Partners understands what needs to be done to achieve sustainable, high-quality growth.
To learn more, check out our process expertise tips sheets here.

What is Transferable Value and How Do I Build It?

Transferable value refers to the value that a business holds for someone else, without the original owner’s involvement. It is important to understand that transferable value is not the same as profit. Although a business may generate substantial profits, it may not necessarily have transferable value. The transferable value of a business is determined by its ability to function effectively in the absence of its owner, rather than how efficiently the owner manages it.

Peter Christman, the co-founder of the Exit Planning Institute, in his book, “The Master Plan”, identifies the three legs to the stool of a successful exit strategy:

  1. Maximizing Transferable business value;
  2. Ensuring that the Owner is financially prepared; and
  3. Ensuring there is a plan for “What next?”

Each of these key elements of a successful exit strategy need to be understood as they are critical. In this blog we will focus on Transferable Value.

The acquirer of a business whether it be a family member, employees, or third parties, are really looking to take possession of a business that produces cash into the future on a sustained basis with predictable results.

To build transferable value in your business, it’s essential to assess your value drivers. By implementing and improving value drivers, you can develop a business that can be transferred to someone else without any significant disruption to its cash flow.

So what are prime examples of transferable value and issues surrounding it that an incoming owner would prize highly and pay fully for?

Leadership and Human Resources

A strong team of human resource assets that work towards a common vision and set of goals within a defined culture that establish the boundaries for strong working relationships. Within that team would be competent management that can help ensure the smooth running of your business, maximize profits, and make informed decisions that drive growth towards the Company Vision.

Supporting management should be a balanced team with multidisciplinary skills that facilitate the execution of the Plans to individually and collectively defined goals and who motivate each other. The key quality is a team that can execute a plan consistently to increasingly valuable ends.

Examples of issues found in due diligence that would raise value in the mind of the buyer:

  • Strong, skilled, balanced and competent management teams;
  • Retention agreements with key staff to ensure that they stay with the company to facilitate transition;
  • A succession plan for leadership positions as the Owner transitions out of the business, and no gaps in skills in the human resource matrix.

Maintenance of Good Financial Records

Maintaining good financial records is another crucial step in building transferable value in your business. This includes having a clear record of your revenue, expenses, and cash flow. By keeping accurate and up-to-date financial records, you can track your business’s financial performance, identify areas for improvement, and demonstrate to potential buyers or investors that your business is financially stable and well-managed.

Here are some reasons why maintaining good financial records is important:

  • Financial transparency – creates trust and confidence;
  • Better decision-making – to make informed decisions on cost cutting or new initiatives;
  • Tax compliance – to stay compliant with regulations and make appropriate deductions;
  • Improved cash flow management – to track cash flow and manage finances; and
  • Valuation – to show a clear picture of prospects to help the evaluation of future value.

Being able to deliver future projections and estimate the net cash flow that the business will generate, informs decision making and enables nimble management as economic conditions change. Evidence of the repeating cycle of success: Strategic plan; Budgeting process; Performance review; and Rolling forecasting, demonstrates that the business possesses up-to-date information on goal attainment as the central focus of its tactical decision-making process. It also highlights the business’s capacity to adapt and modify plans to embrace emerging opportunities and address potential risks on a timely basis.

During due diligence, a buyer will be assessing:

  • What the quality of the reported numbers are – audited financial information is presumed to be the highest quality;
  • The value of future plans with projections that are predictable and sustainable. This will help the buyer assess future returns so an offer can be made based on both reported and anticipated cash flows;
  • The current status of compliance reporting; and
  • The appropriateness of accounting policies with GAAP and consistency with their presentations.

Issues that could create transferability issues are: Loss making businesses; qualified audit opinions; or contingent liabilities such as the outcome of current lawsuits.

Legal Protection

A company contract is a legally binding agreement between two or more parties that outlines the terms and conditions of their business relationship. Contracts play an important role in protecting business interests, reducing risk, and increasing transferable value.

Having clear legal contracts in place that document agreements with Customers, Suppliers, Employees, Partners, Shareholders and other key stakeholders to the business is important for a third party, particularly when the buyer is purchasing shares of the company.

It is commonly the case that Companies have short-cut creating legal documentation as they grow and have avoided incurring legal fees by “copying” other company document formats. While this serves a purpose at the time (keeping costs down), it is important for a lawyer to review the existing documents to confirm that they are appropriate for the current business conditions especially in contemplation of a change of control.

Given the focus of the buyer on the future and sustainability and growth of current business, the existence of patents to protect intellectual property into the future is of heightened importance – even if the patent protection is in place but “pending”.

Finally, having no disputes outstanding and a clean record is valuable. Conversely, the existence of lawsuits is often a blocker to transferability. It is therefore highly recommended that legal disputes are settled well in advance of any transaction.

Recurring Revenue and Efficient Sales Processes & Systems

The process and systems that exist in a company to identify, prospect, engage, excite, sell to and convert prospects and customers in the Sales process is a key leverageable asset. A buyer will want to ensure these are in place to facilitate their plans to operate and grow the business into the future. The absence of good quality, repeatable systems is likely a significant issue for a buyer that can negatively impact transferability and business value.

In particular, the existence of a sales pipeline and a sales back log will be the subject of detailed due diligence, and the probability of conversion of the pipeline into future cash will determine how transferable the business is.

During due diligence, the quality of the processes and systems will be assessed.The existing pipeline, as often captured in a CRM, will be scrutinized and is often key to the value placed on a business.

Transferability will be impacted where:

  • Systems and processes are undocumented, impacting scaleability; and
  • Sales pipeline and evidence over the probability of converting a lead is poor, leading to low visibility behind sale projections.

The repeatability of sales to customers should be emphasized during due diligence both historically and in showcasing the ability to convert prospects.

Marketing and Customer Service to Support a Strong Brand

Developing a strong brand is a critical step in building transferable value in your business. A strong brand creates a lasting impression on your customers, making your business more memorable and recognizable. It can differentiate your business from competitors, increase brand recognition, build customer loyalty, support premium pricing, and provide a competitive advantage. By doing so, you can create a more attractive business for potential buyers or investors.

The transferable value is often documented in:

  • The development of a marketing brand book – that documents characteristics of brand identity;
  • Documentation outlining the company’s Unique Selling Proposition;
  • A history of strong and improving customer satisfaction scores using widely accepted scoring benchmarks such as Net Promotor Score; and
  • Marketing conversion metrics giving a clear track record of understanding the ideal customer and their needs and wants.

Operational Capacity and Ability to Fulfil the Sales Promises

Operational capacity is the business’s ability to fulfil orders in a timely manner such that the customer is satisfied that the brand promise has been fulfilled time and again.

The buyer of a business is interested in whether the Operations of the systems of fulfilment and Customer service are repeatable and set up such that the promises made by Sales are satisfied no matter what time of year and in spite of different influences on the business.

They also focused on whether such practices are scaleable and therefore sustainable. In this regard they would want to know if Standard Operating Procedures (“SoP’s”) are in evidence and are teachable to facilitate higher volumes.

Transferable value is contained in:

  • Documented SoP’s;
  • Documented training in Systems and Procedures;
  • Products that are standardized as opposed to being customized; and
  • Human resources that are onboarded and trained in procedures with defined job descriptions so that they can become a productive member of the team in the minimum time possible.


In summary, this presents several key value drivers and indications for you on what represents transferable value. This is by no means an exhaustive list, and you should seek professional help in identifying transferable value in your business. Your company’s transferable value needs to be showcased and emphasized during due diligence with prospective acquirers.

As a final thought, the “three legs to a stool” is a powerful symbol in this context when you consider what happens to the three-legged stool that is short one leg. Note that 75-80% of businesses fail to sell when they are brought to market *. Beware ignoring the components of a successful exit strategy and in particular the drivers of transferable value.

By focusing on the key value drivers, you can build transferable value in your business and make it more attractive to potential buyers or investors. It is important to remember that building transferable value takes time and effort, but the long-term benefits can be significant.



* Tom West, Business Reference Guide


Rizolve Partners understands what needs to be done to achieve sustainable, high-quality growth.
To learn more, check out our process expertise tips sheets here.

What is Pricing Power and How Can It Drive Company Value?

What is Pricing Power and How It Can Drive Company Value - Blog post

Pricing power refers to a company’s ability to set and maintain prices at levels that are higher than its competitors. It also involves being able to do so without losing significant market share.

It is a measure of a company’s pricing flexibility and its ability to capture value resulting in improved profits. This, in turn, also improves shareholder value. Developing pricing power is crucial for companies to drive value and achieve long-term business success.

Pricing power is influenced by various factors including:

  • market demand,
  • competitive landscape,
  • customer perception,
  • brand strength,
  • product differentiation, and
  • overall market dynamics.

When a company has pricing power, it has the ability to set prices strategically, adapt to changing market conditions, and command premium prices. This allows the company to generate higher revenue, improve margins, and ultimately capture a greater share of the value they create.

Here are some strategies your company can use to develop pricing power…


1) Build a Strong Brand and Reputation

A strong brand and reputation can significantly impact pricing power. A well-known and respected brand can create customer loyalty, trust, and perceived value. Customers are often willing to pay a premium for products or services associated with a reputable brand.

Building a strong brand involves consistent delivery of high-quality products or services, excellent customer experiences, and maintaining a positive reputation. Invest in building your brand identity, brand image, and brand equity through effective marketing and communication strategies.

This includes:

  • creating a compelling brand story,
  • establishing brand recognition,
  • cultivating loyalty, and
  • maintaining a positive reputation through customer testimonials, reviews, and feedback.

A strong brand can justify higher prices, differentiate your offerings from competitors, and enhance your pricing power.


2) Focus on Customer Value

It’s important to effectively communicate the value proposition of your products or services to your customers. Highlight the unique features, benefits, and value that your offerings provide. Use marketing and communication strategies to clearly convey the value of your products or services, and how they address customers’ needs.

Show how your offerings are superior or differentiated from competitors, and why they are worth the premium price.

This can help justify higher prices in the minds of customers and build perceived value, which can enhance your pricing power.


3) Differentiate Your Offerings

One of the most effective ways to develop pricing power is by differentiating your products or services from your competitors. When customers perceive your offerings as unique, superior, and valuable, they may be willing to pay a premium for them.

Differentiation can be achieved through various means, such as superior product quality, innovative features, exceptional customer service, exclusive branding, or customization. Conduct market research to understand customer needs, preferences, and pain points. Then develop offerings that address those needs in a unique and compelling way.

By offering different products or services, you can create a competitive advantage that allows you to command higher prices and develop pricing power.


4) Develop Expertise

Build expertise in your industry or niche and establish yourself as a thought leader.

Customers perceive expertise as a mark of excellence and trustworthiness. When you are recognized as an expert, customers are more likely to trust you and be willing to pay a premium.

This can result in higher prices and improved profits, as customers are willing to pay for the added value and trust.


5) Improve Quality

Continuously improving the quality of your offerings can justify higher prices and create customer loyalty. High-quality products or services are associated with superior performance, reliability, and durability.

When you consistently deliver products or services that meet or exceed customer expectations, it enhances customer perceptions of your brand. Customers are willing to pay a premium for quality as they perceive it as an indicator of value and reliability.

By improving quality, you can position your offerings as premium products or services, commanding higher prices and developing pricing power.


6) Optimize Pricing Strategies

It’s important to constantly review and optimize your pricing strategy to develop pricing power. Conduct pricing analysis to evaluate the effectiveness of your pricing strategy. Evaluate factors such as price elasticity, customer segmentation, competitive benchmarking, and profit analysis.

Test different pricing strategies such as value-based pricing, cost-plus pricing, or dynamic pricing. Do this to determine which approach works best for your business and market. Consider using pricing software or tools to help you analyze data, make informed pricing decisions, and optimize your pricing strategy.

Regularly review and adjust your prices based on market conditions, customer feedback, and competitive landscape. This will ensure that your prices remain relevant and competitive while also reflecting the value of your offerings. By optimizing your pricing strategy, you can maximize your pricing power and drive value for your business.


By developing pricing power, your company can drive value in several ways. It can increase revenue and profitability by capturing higher prices and improving margins. It can also enhance customer perception of your brand, build customer loyalty, and foster customer advocacy. These efforts can lead to repeat business and positive word-of-mouth marketing.

Pricing power can create a barrier to entry for competitors as customers are willing to pay a premium for your offerings. This can help your company establish a sustainable competitive advantage and position itself as a leader in the market.

Overall, developing pricing power requires a deep understanding of your customers, market, and competitive landscape. By focusing on building a strong brand, providing value to customers, and continually improving your offerings, you can create pricing power that drives value for your business!



Rizolve Partners understands what needs to be done to achieve sustainable, high-quality growth.
To learn more, check out our process expertise tips sheets here.

How Do I Grow My Business?

How do I grow my business?

Acquiring new customers is a good thing, but growing your business is easier and more cost effective when you increase sales to existing customers.

To accomplish this, strategically focus on your customer relationships and improve the customer experience.

Sounds simple, right?

After all, you’ve already acquired the customer; all you have to do is keep them and expand your working relationship!

But with so much competition vying for “your” customers, you’ll need to work hard to earn their loyalty.

So, instead of jumping to look for new ways to grow your business.. it’s best to start with Growing Your Business by Building, Maintaining, and Improving Customer Relationships.


Here’s how you can make it easier to grow your business through building,
maintaining, and improving your existing customer relationships:

Understand the Value of Customer Loyalty

Research from various sources* indicates it costs 5 times more to convert a new customer than to sell additional solutions to an existing customer.

Furthermore, your probability of converting a new customer may be as low as 5% on average while your probability of selling additional solutions to an existing customer can be as high as 70%.

And yet, too many companies focus most of their time, energy, and marketing dollars on new customer acquisition while taking current customers for granted.

In doing so, they neglect customer satisfaction and jeopardize customer loyalty.

Make no mistake: a satisfied customer is more inclined to be a loyal customer and buy more. This can be true even if the customer sees value – typically economic value – in changing solution providers.

All things being equal, why are customers predisposed to staying put?
Because they know change is stressful. They know change is time-consuming. They know change is harder than not changing.

Nonetheless, if a customer doesn’t feel well-served or appreciated, change becomes appealing.

Ultimately, because your competition is working hard to lure your customers away, you must work hard to keep them. So, read more for some ways to help ensure customer loyalty by building, maintaining, and improving customer relationships.


Know Your Customer and Keep Them Engaged

At some point, by some means, you acquired that customer.
Now what?

If you focus more on attracting and acquiring new customers, it can be easy to take your current customers for granted. But by ignoring them, it’s also easy to lose sight of what makes your customers unique and important to your company.

To avoid this trap, go back to the basics.

Start with your CRM system. Review your customer information and keep your CRM updated as the relationship unfolds over time.

Refer to your customer data before making frequent customer interactions. Communicate regularly, but don’t rely solely on mass media.

Data confirms that customers love being treated as an individual, not a number on a spreadsheet.

Personalize your communications with direct, one-to-one messaging. Send a handwritten follow-up card. Pick up the phone. Visit face-to-face.

Perhaps most importantly, don’t approach customer interaction as an opportunity to sell. Instead, ask questions. Seek feedback and input. Listen, relate, engage. Have a conversation.

Your customer will be surprised, delighted, and more likely to buy from you again if your goal is to provide value.

They’ll also be less likely to jump ship when a competitor comes calling. Remember, you don’t want your customer to feel like the only time you want to talk to them is when you are trying to sell to them.


Provide Exceptional Customer Service

It should be obvious, but don’t underestimate the value of superior customer service.

Anything less opens the door to a customer defection. Excellent customer service is easier if you are truly engaged because you will know what excellence looks like to your customer.

To deliver superior service, deliver on your promises. Follow through.

Understand that details matter, so make the effort to “sweat the small stuff.”

Hard work? Sure, but it all becomes easier if you adopt a “servant leadership” mindset.

Servant-leaders gain followers, earn respect, and attract success because of their outward focus and a desire to give from the heart.

By adopting this attitude in your sales and customer service efforts, you can turn a strictly business relationship (one that is transactional in nature) to a relationship built on trust and shared goals.


Become a Partner in your Customer’s Success

Customers do business with people and organizations they know, like, and trust.

To earn that trust, you must show you care about your customer and their success.

You must support, you must be a resource, and you must be their advocate!

If you – and your business solutions – can help your customer solve problems, serve their customers, and become a market leader – then you will be more than a vendor; you will be a trusted partner.

And customers are far less likely to abandon a trusted partner, even if it means saving a few dollars.


The Bottom Line

While the value of current customers should be clear, and while the costs of acquiring customers can greatly exceed the costs of selling more to current customers, research has shown that nearly half of companies have a greater focus on customer acquisition while less than one in five focus on retention*.

Chances are, then, you have a golden opportunity – a cost-effective opportunity – to grow your business by focusing on building, maintaining, and improving existing customer relationships.

Rizolve Partners understands the importance of nurturing existing customer relationships to maximize revenue growth while minimizing sales expenses.

To learn more about sales processes that boost company value, download our Sales Process Expertise one-pager here.

* Data compiled by Invesp from various sources.

Will your business be more valuable this time next year?

For many, January is a time of rebirth and resolutions. It’s a time to reflect on last year’s achievements and to set goals for the year ahead.

Some people will set personal goals like losing weight or quitting a habit, and most company owners will set business goals that focus on hitting certain revenue or profit milestones. But if your goal is to own a more valuable business next year, you may want to make one or more of the following New Year’s resolutions.

Tips to build a more valuable business:

  • Take a two-week vacation without checking in with the office. When you return, you’ll see how well your company performed and where you need to make a key hire or create a new system.
  • Write down at least one process per month. You know you need to document your systems, but you may be overwhelmed by the task of taking what’s inside your head and putting it down in writing for others to follow. Resolve to document one system a month and by the end of the year you’ll own a more sellable company.
  • Offload at least one customer relationship. If you’re like most business owners, you’re still your company’s best salesperson, but this can be a liability in the eyes of an acquirer, which is why you should wean your customers off relying on you as their point person. By the time you sell, none of your key customers should think of you as their relationship manager.
  • Cultivate a new relationship with a new supplier. Having a “go to” group of suppliers is great, but an over-reliance on one or two suppliers can create a liability for your business. By spreading some of your business to other suppliers, you keep your best suppliers hungry and you can make a case to an acquirer that you have other sources of supply for your critical inputs.
  • Create a recurring revenue stream. Valuable companies can look into the future and see where their revenue is going to come from. Recurring revenue models can vary from charging customers a small amount for a special level of service to offering a warranty or service contract.
  • Find your lease (and any other key contracts). When it comes time to sell your company, a buyer will want to see your lease and understand your obligations to your landlord. Having your lease handy can save time and avoid any nasty surprises at the eleventh hour in the process of selling your company.
  • Check your contracts and make sure they would survive the change of ownership of your company. If not, talk to your lawyer about adding a line to your agreements that states the obligations of the contract “surviving” in the event of a change of ownership of your company.
  • Start tracking your Net Promoter Score (NPS). The NPS methodology is the best predictor that your customers will re-purchase from you and/or refer you, which are two key indicators of a healthy and successful company. It’s also why many strategic acquirers and private equity companies use NPS as a way to measure the health of their acquisition targets during due diligence.
  • Get your current Value Score. All goals start with a benchmark of where your Company value is today. By understanding it and what it is composed of, you can pinpoint how you’re doing now and which areas of your business make-up are dragging down it’s value.

A lot of company owners will set New Year’s resolutions around their revenue or profits for the year ahead, but those goals are blunt instruments. Instead of just building a bigger company, also consider making this the year you build a more valuable one.

Rizolve Partners is a trusted strategic advisory firm dedicated to helping business owners achieve peak value. If you’d like to learn more, let’s have a conversation. Are you curious about how transferrable your company is and what you would need to adjust to transition it successfully when you’re ready? Then perhaps it’s time to for us to connect so we can discuss your company’s current value and how to make your business (and your life) more attractive! You can reach us in any number of ways here.

Four Steps to Finding Your Sell-By Date

Most business owners think selling their business is a sprint, but the reality is it takes a long time to sell a company.

The sound of the gun sends blood flowing as you leap forward out of the blocks. Within five seconds you’re at top speed and within a dozen your eye is searching for the next hand. Then you feel the baton become weightless in your grasp and your brain tells you the pain is over. You start an easy jog and you smile, knowing that you did your best and that now the heavy lifting is on someone else’s shoulders.

That’s probably how most people think of starting and selling a business: as something akin to a 4 x 100-meter relay race. You start from scratch, build something valuable, measuring time in months instead of years, and sprint into the waiting arms of Google (or Apple or Facebook) as they obligingly acquire your business for millions. They hand over the check and you ride off into the sunset. After all, that’s how it worked for the guys who started Nest and WhatsApp – right?

But unfortunately, the process of selling your business looks more like an exhausting 100-mile ultra-marathon than a 100-meter sprint. It takes years and a lot of planning to make a clean break from your company – which means it pays to start planning sooner rather than later.

Here’s how to backdate your exit:

Step 1: Pick your eject date

The first step is to figure out when you want to be completely out of your business. This is the day you walk out of the building and never come back. Maybe you have a dream to sail around the world with your kids while they’re young. Perhaps you want to start an orphanage in Bolivia or a vineyard in Tuscany.

Whatever your goal, the first step is writing down when you want out and jotting some notes as to why that date is important to you, what you will do after you sell, with whom, and why.

Step 2: Estimate the length of your earn-out

When you sell your business, chances are good that you will get paid in two or more stages. You’ll get the first check when the deal closes and the second at some point in the future — if you hit certain goals set by the buyer. The length of your so-called earn out will depend on the kind of business you’re in.

The average earn out these days is three years. If you’re in a professional services business, your earn-out could be as long as five years. If you’re in a manufacturing or technology business, you might get away with a one-year transition period. (Estimate: + 1-5 years)

Step 3: Calculate the length of the sale process

The next step is to figure out how long it will take you to negotiate the sale of your company. This process involves hiring an intermediary (a mergers and acquisitions professional, investment banker or business broker), putting together a marketing package for your business, shopping it to potential acquirers, hosting management meetings, negotiating letters of intent, and then going through a 60 to 90-day due diligence period. From the day you hire an intermediary to the day the wire transfer hits your account the entire process usually takes six (at best) to 12 months. To be safe, budget one year. (Estimate: + 1 year)

Step 4: Create your strategy-stable operating window

Next you need to budget some time to operate your business without making any major strategic changes. An acquirer is going to want to see how your business has been performing under its current strategy so they can accurately predict how it will perform under their ownership. Ideally, you can give them three years of operating results during which you didn’t make any major changes to your business model.
If you have been running your business over the last three years without making any strategic shifts, you won’t need to budget any time here. On the other hand, if you plan on making some major strategic changes to prepare your business for sale, add three years from the time you make the changes. (Estimate: + 3 years)

Figuring out when to sell

The final step to finding your sell-by date is to figure out when you need to start the process. Let’s say you want to be in Tuscany by age 50. You budget for a three-year earn out, which means you need to close the deal by age 47. Subtract one year from that date to account for the length of time it takes to negotiate a deal, so now you need to hire your intermediary by age 46. Then let’s say you’re still tweaking your business model – experimenting with different target markets, channels and models. In this case, you need to lock in on one strategy by age 43 so that an acquirer can look at three years of operating results. (Estimate: 4-7 years)

It certainly would be nice to make a clean, crisp break from your business after an all-out sprint, but for the vast majority of businesses, the process of selling a company is a squishy, multi-year slog. So the sooner you start, the better.

Rizolve Partners is a trusted strategic advisory firm dedicated to helping business owners achieve peak value. If you’d like to learn more, let’s have a conversation. You can reach us in any number of ways here.