Will it be a story about explosive market share gains? Rapidly rising revenue in a new product line? Expanding profitability? Declining SGA expense ratios? Dizzying free cash flow? It would be great to tell a story of all this and more. But chances are you aren’t telling the Zappos story.
The reality for most owners is their best story hinges on a few well-conceived strategies, executed brilliantly.
But it also hinges on the target audience. Who do you want reading your story, and why? And when do you want them to read it? And most importantly, how do you make it more compelling than the other stories they read?
The answer: start writing your story today! Maximizing the value you can command in today’s market is a direct function of the quality of your story. It is what attracts a highly qualified investment banking team to represent you in the sales process. It is what will make your company stand out among all the other baby boomer business owners who want to exist. And it IS what buyers pay a premium for.Of course, the story is not a fictitious tale of your company, or even a well written description. It is the retelling of your business attributes and accompanying performance, your track record of success, and the yet unwritten potential a new owner could capitalize upon.
It’s a story of the past, the present and most importantly, the untapped future.
External buyers’ greatest fears are about sustainable financial performance, and future potential. The first proves value, and provides the fuel to realize the second. Mis-stepping on either of these leads to the #1 fear: paying too much. Which for the exiting owner means getting too little.
So how do you tell a great story? Well, a great performing company is a good start. But you also need to begin drafting your story so your business shines, and entices the ’reader’ to delve deeper, understanding the nuances, savoring the details and finally becoming part of the story themselves.
The goal: the reader forms a vision of the story’s end in which he is the successful protagonist.
So here is how you can start today:
Get yourself a notepad and start by answering these questions:
1. Every story has colorful characters, who are yours? Your key managers? Talented engineers? Rock star sales people? License bound customers?
2. What is the setting? Describe what you see- a highly organized work environment? A highly competitive marketplace? Well oiled operations and procedures?
3. What is the theme? Organic growth? Expanding profitability through new products? Exceptional expense control?
4. What about the plot line? Burgeoning list of new customers in a down economy? Defying industry trends through innovation? Capturing greater share of wallet through data mining and customer cross selling?
After you have drafted your thoughts, put the pad away for a few days.
When you revisit your answers, ask yourself these questions:
1. Is this a compelling story?
2. Does it portray a positive, optimistic, ‘success is certain’ trend or a dark and stormy narrative of impending doom?
3. Do you like the characters? Would you be drawn to working with them?
4. Is the environment attractive? Would you want to visit? Would you want to stay?
5. Does the theme make sense? Does it dovetail to the plot line? Is it all believable?
If the story is not exactly what you had hoped for, you are not alone. Business owners are often so buried in their business, they cannot see their business as others would. This is why having an advisor who understands how to write the story, and even shape the story as it happens, is critical to maximizing your value. Your buyers want a story they can believe, proudly share with others and have confidence will come true. To achieve this you need to be certain you are writing the right story, starting today.
Feel free to share your company's story in the comment area below. I would love to hear it.
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