Just shared a playbook with an older owner of a nat gas and water parts distributor in NY
Similar to one I used to grow cash, increase our multiple, and find a great buyer for 2 previous smbs
here is what I shared with him for his business 👇🏼
(As long as its typed, ill paste)
1. Write down how to do everything you do, knowledge-based or not. Write them using instructions as if you were delegating to someone with no experience.
This will help us bring new people as we grow.
Scale with fewer errors.
Package the business up for a buyer in 36 months.
2. repeat our model in more territories that are underserved.
These are easy to identify, and our service model will attract customers, with higher than industry retention.
3. Automate the things that can be automated:
a. emails with supplier invoices are auto processed and paid
b. when jobs are completed, customer is auto invoiced
c. sales, quoting, and basic followups are auto built in
d. inventory monitoring
e. fulfillment of lower service items
4. Between training and documenting, the business will need you less and less. That is good. We make this business run with or without you. We systemize everything you currently do - even your problem-solving techniques and solution arrivals.
5. Use some simple inventory optimization techniques to lower your onhand and buying strategies to free up NWC without affecting service levels.
We have 5 years of history making this easy.
6. Create and document a repeatable sales funnel.
You currently do things that help. Its not consistent, but can be. Parts can be automated, parts can be augmented, all of it needs to be repeatable and trainable, and it all will be a completed system when we are done.
7. Work on putting digital ads where your clients are. There is currently little to no marketing down. This is a place for some quick wins once we nail the right copy.
8. Take the small app we are using for customer management, and build it out to a full portal for the customers, interactions, service delivery, etc. Most of the infrastructure is there.. so we just need to structure it, add permissions, and flip the switch.
9. Create an online pricing / quoting tool. 30% of your time is looking up prices on a price sheet and emailing people back. There are other, less time-intensive ways to deliver this information in a quick and accurate way. Online, SMS, no-code mobile app etc.
10. Create an online order system. (store, payment, shipping)
Currently receive and entering orders using the accounting system. We'll create an "eCommerce" setup to receive the orders where they know what they need based on job specs.
11. Possibly outsource fulfillment.
Lots of the work is 1. knowing what the customer needs for the job, 2. installing it. No need to keep our own warehouse, and daily ship this stuff. Might make sense to outsource fulfillment.
Every #SMB is a little different, but there some basic principles.
Whether you want more cash, more sales, or more value... the steps are the same - selling or not:
Grow cash, increase cash growth rate, increase the multiple someone will pay for that cash and growth.
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Still going for me, so I'm sure this isn't a complete list.
First... 👇
2/7 Common Sense
Learning business basics. This is about all an MBA does for you. There are far faster and cheaper ways to acquire.
A few books, a few frameworks, a few conversations with owners and you are there.
Still, people pass common sense and end up in trouble
3/7 Psychology
As time passes you realize business basics aren't enough. You work with people, you sell to people, you buy from people. You need to understand people.
Once you get people, why they act, and learn to read them - you're performance will improve in all areas.
Listing agencies can help, but most likely won't. Your best strategy there is to set filters for industry and location for daily emails for all the major buy/sell business listing sites. If something is added in your realm, you'll see it and can email/call.