David is the co-founder and Head of Growth at VBP, which shows Australian financial service businesses how to scale. He is passionate about showing his clients how to start, build, and maximise the value of their business.
At the 2024 Business Blueprint conference in Cebu, David took to the stage to share his ‘rules’ for building a sale-ready company. Take a look at the highlights of his presentation:
How to build a business and sell for millions
Building a business from scratch and selling it for millions is a dream for many entrepreneurs. However, achieving this requires a clear vision, strategic growth and meticulous planning.
While every business and every journey is different, these are the essential steps to build a thriving business that will attract high-value buyers.
Define your business
The first step is to have a clear definition of what a business is. From David’s perspective as someone who has been in the senior leadership space for many years, a business is a “Commercial, profitable enterprise that operates with or without you.This means creating a business that can function independently, allowing you to step back without operations grinding to a halt. Having this independence is crucial, not only for your peace of mind but also for potential buyers who see a self-sustaining enterprise as a valuable asset.”
Focus on growth
Growth should be a primary objective if you want to scale and eventually sell. This involves increasing revenue and reducing the time spent to generate that revenue. The ultimate goal is to create a business that provides time, money and significance. Achieving this balance ensures that your venture will stay attractive and viable for the long term.
Align your personal goals with your work
As you build your business, consider your personal ambitions. For example, you might want to work fewer days as the business matures. To achieve this, you need to plan and structure your business in a way that will accommodate these goals. Transitioning from working full-time to a more flexible schedule is a step by step process. You’ll achieve it by delegating responsibilities and finding suitable replacements for key roles. The end result will be a business that works without you and this is an asset you can sell.
Don’t forget about culture and values
A strong business culture is built on clear values and behaviours. These should be communicated regularly within the organisation. For example, David’s business sends weekly emails highlighting specific behaviours that align with company values to reinforce the desired culture. Celebrating wins and supporting your team during challenging times also help in building a resilient and positive culture, and a business that other people want to be a part of.
Strategic planning
If you want to sell your business, strategic planning involves more than just having a vision. It requires understanding what makes your business money and focusing on those elements.
This could mean identifying key areas for growth, improving client relationships, and enhancing your team’s skills.
Start by creating a one-page strategic plan. This can help keep everyone aligned and focused on the core objectives.
Leadership and succession
Effective leadership involves being transparent, caring, and sharing. It’s about getting the right people in the right roles and continuously nurturing their development. As a leader, it’s also essential to ‘fire and rehire’ yourself periodically. This will bring fresh perspectives to your role. As David explains, transitioning from CEO to Chief Growth Officer himself has been a way to provide new growth opportunities for the business.
“Over the years, you will need to ‘fire and rehire’ yourself, to bring fresh perspective to your role.” – David Carney
Valuation and exit strategy
Understanding the value of your business is crucial for a successful exit. Valuation is typically a function of profit multiplied by a multiple. While profit is straightforward, the multiple can be influenced by various factors such as market position, growth potential and operational efficiency. Enhancing these factors can significantly increase your business’s value.
Attracting capital partners
Bringing in capital partners can provide several benefits, including risk reduction, access to smarter minds and a structured succession plan. Choose the right capital partners and you can also introduce governance structures and funding mechanisms that enable further expansion and stability.
Final thoughts
You can design and create the most wonderful company in the world, but it takes people to make the dream a reality. Create a culture-led organisation and be aware of what business you’re truly in… according to David, his company is successful because it makes customer and employee experience a priority.
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