Every business is ultimately for sale

“To be a designer today is to be an entrepreneur. Whether you’re a two-man operation in Shoreditch or a 3,000-person, vertically integrated brand, you need to have the wherewithal to run your business through investment, considering everything from start-up funds to your exit plan or what it takes to go public.”  — Natalie Massenet

The best advice I ever heard in business was to get out. Actually, it was to get out at the maximum price or value that could be generated by the owners over a given period of time. Over the years I have worked with, led, consulted to and witnessed many successful franchise businesses earn many more multiples in selling than that counterparts. 

Their view is that every business is ultimately for sale — so each day is working towards that ultimate end goal of maximising business (investor) value. This mentality can be applied by any business owner at the single site, right through to the entire system/franchise owner. Why could two seemingly similar businesses deliver such different outcomes for their owners? Or, put another way, why is one business essentially “future fit” whilst the other is “employees capable”? 

Let’s address some of these reasons.

Future fit

Firstly, the “future fit” franchisor takes the investor position, the observer on strategic interpretation, seeing the business that is there to earn a greater return than other investments and making decisions that influence their decision as distinct from the “employee capable” who immerses themselves in the detail of the business from day 1 — focusing on short-term profit as their mantra and inevitable daily “fire fighting”. 

Whilst this is necessary in the day to day, a disequilibrium caused by too much short-term and not enough long-term thinking typically builds a culture of reaction in the moment and not laying out that replicable framework (which buyers want to see), which gives a seller best return.

Great people

The second trait is great people. Great retail is great people — “Future fit” franchisors invest in their people, recruit the best and pay more, train, coach and delegate, letting them stamp their print on the business, buoyant from the same “franchise future juice” that the owner drinks.

 A good franchise business, like all businesses, is run by great people and is not reliant on the owner. This is crucial to the overall business value, such that a buyer can effectively run the business they have purchased from day 1 supported by great systems and people. The employee capable “everything relies on me” manager is yesterday’s news in a world of franchise “future fit”.