Doubling profit isn't the same thing as doubling business value. I know this is shocking coming from me, I'm Mr. Double Your Profit in 18 months, but here's the thing. Buyers pay for future profit with reduced risk.

So we need to increase the profit of your business while we reduce the risk associated with your business if we're going to sell your business for a higher multiple sometime in the next 18 months. Let's talk about the three ways that we can help increase profit while we reduce risk. First and foremost, owner dependency is a big problem.

If the entire business revolves around you or all the critical decisions in the business revolve around you, you've got nothing to sell. You essentially have worked yourself into a situation where you're important, in fact, you're too important to the business. Ego is one of the number one reasons why a business doesn't sell, the owner's ego.

So here's what you should do. You should immediately look at your leadership team and look at their roles and responsibilities. And you should begin on paper to offload your responsibilities to the business to different members of your leadership team.

If you can't get all of your responsibilities portioned out among the members of your current leadership team, you probably need one or more new leaders in each of the roles of your business. So starting today, I want you to write down everything you do in your business. Keep track of it for the next month.

You can take a daily planner and write down hour by hour what you're doing. Then after the month is over, look at that daily plan and create common themes among all the things you do. Then take those themes and divide them up among the leaders in your business.

Begin to train each leader on one of those themes every month moving forward, wherever you find gaps, that's where you need help in your leadership team. If you can't assign all of these responsibilities out, your business isn't ready to be sold. Now, if you're under pressure and you need to sell your business tomorrow, let's say because you're ill or a member of your family is ill, we can help you bring in an outsourced CEO and the outsourced CEO can step into your shoes immediately and work to get your leadership team ready.

The second thing that we can do to increase profits while reducing risk is installing systems and processes into your business. So we talked about reducing owner dependency and part of reducing owner dependency is installing the right systems and processes. So each of your leaders in each of your different disciplines, so sales and marketing, finance and accounting, operations, all of them should have systems and processes that their department heads are responsible for overseeing.

Managers work on systems and processes, leaders work on developing people. So each of your areas should have systems and processes and there should be standard operating procedures which outline what needs to be done, why it's important, how to do it and when to do it. These standard operating procedures are run by people in each area of the business.

If you have all of these in place and if they're all running at a high level and your managers are constantly updating them to update with changes in the market, changes in personnel, if the systems and processes continue to evolve, your business is ready for sale because the risk is reduced. Think about it from this perspective. You're an investor coming in to buy this business.

You wanna know that every area can run independently of everyone else. This means systems and processes, standard operating procedures and great leaders are in place throughout the business. The third area we look at for helping you increase the value of your business while reducing the risk is strategic positioning and looking at the market fit for the business overall.

You need to have an accurate competitor analysis done every year at a minimum every three years so you know where you fit in the marketplace. If your business is ready to be sold, you need to bring us in 18 months in advance to do a competitor analysis and plot out where your business fits in the entire market. We can also help you understand what your competitive advantages are, what your strengths are, what your weaknesses are, where there's opportunity and where there are threats.

This is essential so that a buyer knows where there's room for improvement. Buyers buy businesses that produce predictable profit for the future and they also look at ways they can improve that profit and where they have a competitive advantage. So you should know if your business is positioned in the market so that when a buyer comes in, they can vertically integrate your business into a channel and immediately unlock new value.

This is an opportunity for the buyer that other people don't have. You should also know if a competitor buys you at what percentage the market share will increase. So if you're number one in the market and you have 20% market share, number two in the market has 15% market share and there's no overlap.

If number two buys number one, they'll immediately have 35% and be dominant in the market. It's important to know where you stand and where you fit in. Buyers buy strength in the market.

Buyers do not buy weakness in the market. If you have a weakness and a competitor is gobbling up market share, they're probably just gonna steal your customers. They're not gonna buy your business.

You need to develop a competitive advantage to prevent them from stealing the customers and then you have something you can sell. Remember, buyers buy future profit minus risk. So growing your profit alone isn't enough.

We're here every day with great new audio and video programs just like this. I want you to join me back here again tomorrow for another edition of our show. We're gonna take you inside business strategy because that's what we do here on the Inside BS Show.