Creating business value is not easy. The facts are sobering: Out of 27.3m US enterprises, 26.7m are employing less than 20 people and only 5,000 to 10,000 US enterprises are selling out for $10m or more each year. Now not everyone wants to build a business to sell but it would be nice to have the option. It would be nice to know that all your hard work as an entrepreneur is actually building value year after year.
However unless you build your business aware of the perspective of the acquirer, the private equity player, or the investor then there is a danger you are going to be a busy fool. You are potentially going to work really hard on the wrong stuff and you are going to miss huge areas of relevance in building business value. Entrepreneurs are not fulfilling the potential of their businesses.
As an ex CFO, investment banker, venture capitalist and CEO of award winning software businesses, I’ve realized more $400m over the last 25 years for shareholders. After over 100 blog posts of The Smith Report detailing ways to build business value, I decided to bring these one-page business tutorials together in one place and in a sequence that makes sense. You start with a great a story and build a business around it! The secret sauce is not just about executing these compelling playbooks but it’s about “Alignment”. It’s about aligning all of these smart ideas. The book uses 60 chapters to explain these ideas as follows:
- To create alignment the order of events is crucial. You start with defining your compelling story. Articulate your unique positioning. Create a memorable and inspiring boilerplate.
- This story then drives and aligns all marketing activity. This includes all campaigns, collateral and web site copy. All focused on telling the story and designed to drive relevant prospects to the web site to read more, or to engage in conversations.
- Sales scripts can now be crafted with your unique positioning in mind. Scripts should be framed around insightful questions that demonstrate your understanding of your unique market and the issues faced by your prospects.
- Product teams now have a defined canvas to play on. Your story effectively sets down the limits to the dream.
- Recruitment policies now have a story to tell. Candidates especially the 90% not looking for a job can now see your story and are intrigued. All interviews now have a framework to them and it’s not only about the specific job but how it fits into the bigger picture, its relevance.
- Who you are is what you measure. Analytics, the auditing of the signals can now be conducted in context. By aligning your story, your marketing, your sales strategy and your product road maps, it becomes much clearer which key ratios both financial and non financial you need to measure.
- Business models are much easier to design when you know who you want to make happy and how you want to make them happy. Because of a clarity of purpose, you are able to define the most appropriate way to be rewarded.
- Raising capital becomes so much easier with alignment. It all stacks up. The vision and the operational blueprint hang together.
- Compliance and risk issues are exposed far quicker as you align the resources and tactics needed. Because your growth plans are focused, aligned and reconciled across departments, it is now easier to spot gaps, risks, missing controls.
- Acquisitions now have a strategic context. You are buying a business that you want to buy whether it is up for sale or not