Build to Sell, Not Just to Run

The richest business owners I know all have one thing in common:

They built their business to sell it from Day 1.

Here are the 14 ingredients that turn any business into an asset someone will gladly pay millions for:

1. Exit-based goals

The first step to building a sellable biz - start with the end in mind.

Most founders think they’ll run their biz forever, then burn out and sell under pressure. Instead, plan the exit early so you sell on your terms.

My own framework for Contrarian Thinking:

Once you’ve set your goals, the next step is knowing what your biz is worth.

Most small businesses sell for a multiple of revenue or profit - think 2-3X profit for a laundromat or car wash… versus 10X+ for a tech company.

Your job is to nail down three numbers:

1. What your biz is worth today

2. What you want it to be worth

3. The plan to close that gap

The rest of these steps will help you do that…

2. Documentation

If a process takes >3 steps and you’ve done it 3 times, it should be documented.

We built a Wiki in Notion with every workflow and decision tree laid out.

Each process is captured step-by-step (or recorded on video) then handed off to a team member to test & improve until it’s bulletproof.

Also, a classic profit-and-loss (P&L) statement is a must - without it, you don’t have a business, you have a mess.

3. Diversified Revenue Streams

Buyers pay premium for stability - so, ideally, no client or product should bring in more than 15% and 60% of revenue respectively.

We learned this the hard way back when our ads made up 100% of our revenue. One bad month could tank our cash flow, so now we balance ads, education products, subscriptions & investments.

Also, never let one platform or payment processor have control over your business - diversify your providers.

4. Recurring Revenue

This is your holy grail.

Six common forms:

1. Long-term contracts (e.g., B2B or government agreements)

2. Auto-renewal subscriptions (e.g., software or memberships)

3. Replenishment models (e.g., Keurig’s coffee pods)

4. Pay-as-you-go subscriptions (e.g., monthly beauty boxes)

5. Loyalty programs (e.g., airline miles)

6. Consumables (e.g., coffee shop regulars)

Recurring revenue is predictable, scalable - and increases your business’s value.

5. Repeatable Sales Process

"I'm the best salesperson" is almost the worst thing an owner can say. Because if you're irreplaceable, you're unsellable. Build:

- A sales team with enablement resources (e.g. objection-handling guides)

- Multiple acquisition channels (organic content, ads, sponsorships)

Plus, measure everything - close rates, lead conversion, market size. This data helps buyers predict future revenue and boosts your valuation.

6. Productize Your Service

Service businesses are harder to sell because they're less scalable.

Solve that by turning your service into a productized system with clear packages, fixed pricing, and a proprietary process.

Avoid custom work as much as possible.

7. Cash Flow

Every business is one of two types:

- Cash-suck: Do the work → chase payment → hope they pay

- Cash-flow: Get paid → then deliver

Buyers love cash-flow.

Improve yours with upfront payments or milestone-based billing.

8. Brand Loyalty

If you’ve named your business after yourself…Congrats, you played yourself.

Buyers run from businesses that depend on the founder's personality. That’s why you need to build brand loyalty, not personal loyalty.

Start by hiring key execs and building a management layer so the biz can start to function without you.

9. The Right Buyers

There are two types of buyers:

- Financial buyers who mostly care about cash flow

- Strategic buyers who mostly care about synergies

Strategics often pay more because YOUR biz accelerates theirs.

So make a list of companies that would benefit from owning you - then build towards what THEY want.

10. The Right Broker

Wrong broker = wrong buyers = wrong price. Match the broker to your business size:

- Business broker for small deals

- M&A advisor for mid-size

- Investment banker for big exits

Don’t be afraid to shop around until you find one whose incentives align with yours.

11. Seller Story

Buyers see 1000 deals a year. Why should they care about yours?

That’s where having a narrative helps.

Stand out by creating a killer seller story that highlights your business’s success and growth potential.

That doesn’t mean you should lie… You can be both honest and strategic.

12. Prepping Your Team

The last thing you want is employees jumping ship. So when it's time to sell:

- Share the post-sale vision with your team

- Offer retention bonuses, profit-sharing or equity plans

- Make them part of the win

Your team built the value, so include them in the upside.

13. Due Diligence

Always assume buyers will dig into everything. So be ready with:

- 3 years of clean financials

- Legal documents & records

- SOPs for every department

Don’t risk being a messy seller - organized sellers get better prices.

14. Time

This is the secret ingredient… Just like you can't cook a great meal in 30 seconds, you can't build a sellable business in 30 days.

Give yourself 12-18 months minimum to put these steps into action.

If you rush through it, you might end up selling for half of your biz’s true potential.

Look, you can spend the next 5 years figuring this out alone.

Or you can learn from the people who have already done it.

Come to MSOWS in November to learn from those people:  https://t.co/AN5NGfoAUY