I just happened to be reading an article in the November - December 2011 Edition of the CGA magazine entitled "Selling Goodwill" by Mark Wardell. The premise of the article is as a CGA how can you help a business owner increase the sale price of their goodwill and therefore their business.
There is a list of about 25 questions to ask yourself about your business and if you can answer yes to all of them your business will have significant value to a potential buyer. If you answer no to any of these questions you may have difficulty obtaining the price you want.
It would be difficult to have a positive answer to many of these questions without an effective ERP system. Here is a sample of a few:
1) Does your company have:
- systems for recruiting, retaining, developing, and managing employees
- systems for managing your customer service
- prospecting and sales systems
- key performance indicators to track ongoing success
The above would be addressed or at least assisted by implementing Human Resource, Customer Relationship Management, and Business Intelligence software. You could manage without but I would suggest that purchasing a business that did not address this with technology is not attractive or valuable as one that does.
2) Do you...
- Receive regular, current, and accurate financial reports
- Know which products and services you offer are most profitable
- Work less than 40 hours per week in your business
- Track and analyze your customer satisfaction ratings
Again the above is addressed with a good General Ledger, Business Intelligence, Sales Analysis and reporting software. Working 40 hours or less per week requires good systems that allow a business owner to monitor business performance quickly and easily. Properly implemented software can provide these benefits.
3) Are your employees doing the best job possible even when you are not present?
With remote access tools, the cloud, and other software we can easily monitor the business even when you are away.
4) Are you responsible for less than 15% of your total sales?
The business should not be reliant on your staff but as a business owner you many need to manage the other 85% of your sales. The best way to do this is with a properly implemented Customer Relationship Management system.
5) Are your financial reports and other KPI organized into a comprehensive analysis manual?
This question implied a manual or paper based organization of data. A good ERP system should provide an executive dashboard where all this data is maintained and updated automatically.
6) Have your profit margins increased over the last 3 years?
How would you know without an effective ERP system and if they have not increased how easy can you find the problem area if you are not using ERP software. Would it be easy or would it be a comprehensive project?
7) Could you take a 6 month vacation without effecting sales?
I can answer this question for my business and the answer is yes thankfully due to excellent sales and support staff. Without our ERP, CRM, HRMS, BI and Fixed Asset software my staff and I would be lost and frustrated.
The end result is more than half the questions in the article were addressed by ERP software. Contact Us today!