Summary
"Built to Sell" by John Warrillow is a business book that focuses on helping entrepreneurs build sellable and valuable businesses. Warrillow tells the story of a fictional business owner named Alex who is stuck in the daily grind of running his business and feels trapped by its limitations. Through Alex's journey, Warrillow reveals common mistakes made by business owners and shares strategies for building a business that is attractive to potential buyers and investors. The book emphasizes the importance of creating systems and processes that can operate without the owner's day-to-day involvement and focuses on creating a business that is not solely reliant on the owner's expertise. Additionally, Warrillow provides a step-by-step guide for preparing a business for sale, including identifying potential buyers and valuing the business. Overall, "Built to Sell" is a practical and insightful guide for entrepreneurs who want to create a successful business that can provide long-term value.
Key ideas
1. Build a business with a specific focus: The book emphasizes the importance of building a business with a clear focus on a particular niche. For example, the author suggests a graphic design company that specializes in designing logos for healthcare companies. This focus allows for the development of a reputation and strength in the sector, which can lead to a higher chance of being sold at a premium price.
2. Create a unique selling proposition: A unique selling proposition (USP) is a statement that differentiates a company's service or product from its competitors. It is achieved by creating a unique value proposition that aligns with the company's core competencies. In the book, an example of this is a marketing automation business that focuses on small accounting firms, providing them with a tailored marketing solution that none of its competitors provide.
3. Increase recurring revenue: The book highlights the importance of increasing recurring revenue, as it helps with predicting future revenues and makes the business more attractive to potential buyers. For example, an IT service provider that provides ongoing maintenance services to clients through monthly subscription billing will have a higher perceived value than a provider who only takes on projects on an ad hoc basis.
4. Build a scalable business model: A scalable business model means that the business has the potential to grow without a significant increase in operational costs. This can be done through processes such as creating standardized services and products. An example in the book is a landscaping company that focuses on a specific niche and creates a standardized process for landscaping, which enables them to complete the job more efficiently and effectively.
5. Develop a well-defined sales process: A well-defined sales process is critical to the success of the business, as it leads to increased revenue and a higher chance of being sold. The author suggests creating a sales process that streamlines the process for both the customer and the business. For example, a marketing agency that specializes in restaurants could develop a pre-defined package that contains all necessary services for a restaurant's online presence.
6. Reduce dependence on the owner: The book suggests reducing dependence on the owner by delegating tasks to employees, creating a culture of ownership, and documenting all processes. This reduces the risk of the business losing value due to the owner's absence.
7. Focus on financial management: The book emphasizes the importance of financial management, as it can help to maintain a healthy business and make it more attractive to potential buyers. This includes having accurate financial statements, keeping up-to-date on tax compliance, and maximizing profits.
8. Create a culture of excellence: The book suggests that a company with an exceptional culture can greatly increase its value. A culture of excellence can be created by developing a clear mission statement, hiring the right people, and implementing a system of rewards and recognition for high performers.
9. Identify and fix problems early on: Identifying and fixing problems early on can prevent further damage to the business and ensure its longevity. This includes regularly reviewing the business's processes and identifying any potential risks or inefficiencies.
10. Plan for succession: The book highlights the importance of planning for succession, as it ensures that the business can continue to operate effectively after the owner exits. This includes developing a succession plan and preparing the successor to take over the business gradually.
2. Create a unique selling proposition: A unique selling proposition (USP) is a statement that differentiates a company's service or product from its competitors. It is achieved by creating a unique value proposition that aligns with the company's core competencies. In the book, an example of this is a marketing automation business that focuses on small accounting firms, providing them with a tailored marketing solution that none of its competitors provide.
3. Increase recurring revenue: The book highlights the importance of increasing recurring revenue, as it helps with predicting future revenues and makes the business more attractive to potential buyers. For example, an IT service provider that provides ongoing maintenance services to clients through monthly subscription billing will have a higher perceived value than a provider who only takes on projects on an ad hoc basis.
4. Build a scalable business model: A scalable business model means that the business has the potential to grow without a significant increase in operational costs. This can be done through processes such as creating standardized services and products. An example in the book is a landscaping company that focuses on a specific niche and creates a standardized process for landscaping, which enables them to complete the job more efficiently and effectively.
5. Develop a well-defined sales process: A well-defined sales process is critical to the success of the business, as it leads to increased revenue and a higher chance of being sold. The author suggests creating a sales process that streamlines the process for both the customer and the business. For example, a marketing agency that specializes in restaurants could develop a pre-defined package that contains all necessary services for a restaurant's online presence.
6. Reduce dependence on the owner: The book suggests reducing dependence on the owner by delegating tasks to employees, creating a culture of ownership, and documenting all processes. This reduces the risk of the business losing value due to the owner's absence.
7. Focus on financial management: The book emphasizes the importance of financial management, as it can help to maintain a healthy business and make it more attractive to potential buyers. This includes having accurate financial statements, keeping up-to-date on tax compliance, and maximizing profits.
8. Create a culture of excellence: The book suggests that a company with an exceptional culture can greatly increase its value. A culture of excellence can be created by developing a clear mission statement, hiring the right people, and implementing a system of rewards and recognition for high performers.
9. Identify and fix problems early on: Identifying and fixing problems early on can prevent further damage to the business and ensure its longevity. This includes regularly reviewing the business's processes and identifying any potential risks or inefficiencies.
10. Plan for succession: The book highlights the importance of planning for succession, as it ensures that the business can continue to operate effectively after the owner exits. This includes developing a succession plan and preparing the successor to take over the business gradually.
Quotes
1. "Build a business, not a job."
2. "The most valuable businesses are systems."
3. "You don't make money when you sell your business; you make money when you build it."
4. "A business that's too dependent on its owner is not scalable or saleable."
5. "A successful business does one thing really well."
6. "A recurring revenue stream is the ultimate business model."
7. "Your best customer is not always your ideal customer."
8. "A business that can't be sold is a hobby."
9. "Simplify everything."
10. "The key to a successful sale is to create a sense of scarcity."
2. "The most valuable businesses are systems."
3. "You don't make money when you sell your business; you make money when you build it."
4. "A business that's too dependent on its owner is not scalable or saleable."
5. "A successful business does one thing really well."
6. "A recurring revenue stream is the ultimate business model."
7. "Your best customer is not always your ideal customer."
8. "A business that can't be sold is a hobby."
9. "Simplify everything."
10. "The key to a successful sale is to create a sense of scarcity."
Action items
1. Create a Sellable Product: The first practical advice that John Warrillow gives in his book "Built to Sell" is to develop a product or service that can be easily sold. It should be unique, scalable, and not dependent on the business owner's personal skills.
2. Identify Your Ideal Customer: The next step is to know your ideal customer and focus on serving them. This will make your business effective, and you can streamline your processes to generate maximum value for your customers.
3. Systematize Your Business Processes: The third practical advice that John Warrillow gives in his book is to standardize your business processes. Your business should have systems and processes that anyone can follow, which makes it easier for you to delegate tasks and free up your time.
4. Create Effective Marketing Strategies: The fourth step is to create effective marketing strategies that attract new customers. Your marketing should be based on what your customers are willing to pay for, not what you provide.
5. Establish a Reliable Team: The fifth practical advice that John Warrillow gives is to establish a trustworthy and reliable team. You should build a team that shares your vision and values, and they should be able to operate the business without your constant supervision.
6. Set Goals and Measure KPIs: The sixth step is to set measurable goals and track key performance indicators (KPIs). You should have a clear understanding of what you want to achieve and what success looks like.
7. Focus on Profitability: The seventh practical advice is to focus on profitability instead of revenue. Your business should generate enough profit to cover your expenses while still having money left over.
8. Prepare Your Business for Sale: The final step is to prepare your business for sale. This includes having accurate financial records, creating a transition plan, and establishing a reliable management team that can run the business without you.
Overall, "Built to Sell" provides practical advice for entrepreneurs who want to create a successful business that can be sold for maximum value. The book highlights the importance of creating a sellable product, identifying your ideal customer, standardizing your business processes, creating effective marketing strategies, establishing a reliable team, setting goals and measuring KPIs, focusing on profitability, and preparing your business for sale.
2. Identify Your Ideal Customer: The next step is to know your ideal customer and focus on serving them. This will make your business effective, and you can streamline your processes to generate maximum value for your customers.
3. Systematize Your Business Processes: The third practical advice that John Warrillow gives in his book is to standardize your business processes. Your business should have systems and processes that anyone can follow, which makes it easier for you to delegate tasks and free up your time.
4. Create Effective Marketing Strategies: The fourth step is to create effective marketing strategies that attract new customers. Your marketing should be based on what your customers are willing to pay for, not what you provide.
5. Establish a Reliable Team: The fifth practical advice that John Warrillow gives is to establish a trustworthy and reliable team. You should build a team that shares your vision and values, and they should be able to operate the business without your constant supervision.
6. Set Goals and Measure KPIs: The sixth step is to set measurable goals and track key performance indicators (KPIs). You should have a clear understanding of what you want to achieve and what success looks like.
7. Focus on Profitability: The seventh practical advice is to focus on profitability instead of revenue. Your business should generate enough profit to cover your expenses while still having money left over.
8. Prepare Your Business for Sale: The final step is to prepare your business for sale. This includes having accurate financial records, creating a transition plan, and establishing a reliable management team that can run the business without you.
Overall, "Built to Sell" provides practical advice for entrepreneurs who want to create a successful business that can be sold for maximum value. The book highlights the importance of creating a sellable product, identifying your ideal customer, standardizing your business processes, creating effective marketing strategies, establishing a reliable team, setting goals and measuring KPIs, focusing on profitability, and preparing your business for sale.