We are exploring the recently released book, “The Exit Strategy Handbook” by Jerry Mills, the founder and managing partner of B2B CFO®.
Last week this blog focused on the need for the owner to enhance sales and sales diversification. Another way owners can improve marketability of their firm is to improve processes and efficiencies. Classic examples of process improvements include:
- Streamlining the order-to-invoice process, getting an accepted quote filled and out the door as quickly and efficiently as possible. That may include how paperwork is handled, whether inventory is available quickly, prompt order fulfillment, low cost and timely shipment to the customer and accurate timely invoicing. Do order terms and pricing move efficiently from those committing to the order to those processing the order?
- The purchasing side of the house may also be an area to review for process improvements. Does the firm have the best combination of product quality, price, availability and delivery from its suppliers? Does purchasing ensure that quantities acquired are moved quickly? Are excess items moved out quickly to convert them back into cash and not clutter up the warehouse?
- Employee processes are also important. Do new hire processes flow well, so that the employee is quickly in place with the proper tools? Are compensation plans achieving company goals and motivating employees? Is turnover higher than normal for the industry? Are compensation levels competitive in the market?
- Is the company leaving cash on the table by not collecting from their customers in a professional and timely manner? Are vendors paid as agreed to by purchasing? Does the firm have the appropriate level of business insurance and is it purchased at competitive rates? Are services provided by consultants and service providers at market prices?
This list just scratches the surface. Mills suggests in The Exit Strategy that The Success Team™ oversee a detailed analysis of the following areas:
- Sales prices charged to customers
- Discounts given to customers
- Gross profit margin
- Cost of sales
- Fixed expenses
- Variable expenses
- Discounts available from vendors
This is such a critical topic that I will explore it in greater depth in future blogs.
B2B CFO® has over 200 experienced chief financial officers have deep knowledge of transactions and business improvement that can be tapped to help you sell your business. You can explore the backgrounds of our team at www.B2BCFO.com/index.php?page=cfo-directory .
 Mills, Jerry L. (2013). The Exit Strategy Handbook. ISBN 978-0-09886932-1-0, Jerry L. Mills and B2B CFO, LLC., pp.71