If you want to build a business that you can sell in the future, one of the worst mistakes you can make is to build that business such that everything relies on you. When it comes to selling, buyers get all shaky because they're not sure if the business can survive without you. In the book, Build to Sell, John Warrilow says that every business should be built to sell, even if you have no intention to sell it. If you are thinking about starting a business, this is one of the best books you should read. In a nutshell, John says that a sellable business has a sales team that sells scalable services or products on a recurring basis with a positive cash flow cycle, and a management team in place for the long haul. Oh, and it can run completely without you being involved. In this summary, I’ll share with you three key lessons that I learned from the book.
Key Lesson #1: Don’t generalize; specialize
If you want to succeed in business, stick to one service instead of taking every project that comes your way. Trying to handle too many things at once can make none of them truly fruitful. But, by zooming in on one and becoming the best at it, you'll enjoy more significant rewards. By specializing in one thing, you position yourself as an expert. Clients love that—they get to see exactly what you're good at, and you become the go-to person for top-notch service. Being an expert not only brings in more business but also gives you the upper hand in negotiating better prices. Specializing also lets you build a dream team of experts. It's tough to hire specialists for everything when your company is small. But if you focus on just one area, you can bring on top talent and provide the best service to your customers. So remember this business rule if you want your business to be sellable, don’t generalize, be a master of one. Focus on doing that one thing really well, hire specialists, and watch your work shine above the rest. Skip the distractions and unfinished projects; put your energy into selling the one thing your business is good at.
Key Lesson #2: Don’t rely on one big client
This is all about the risks of relying too much on a single big client for your income. If that client is, say, 40% of your revenue, any problem, like a late payment, can mess up your cash flow. And you don't need that extra stress in the startup hustle. Having just one or two major clients also makes negotiating a bit tricky. You might want to raise your prices or get more time for projects, but you can't risk losing those big clients by suddenly changing the game. But It's not just about money; it's about your team too. If a big client needs a project ASAP, your best employees might have to work weekends, and that's a surefire way to risk losing them. Why does this matter? Well, if you dream of selling your company one day, potential buyers aren't fans of businesses with all their eggs in one basket. It sends out some pretty bad signals. So, diversify your income streams early on. The rule here is that no single customer should make up more than 10–15% of your revenue. So, diversify your customers and spread the risk.
Key Lesson #3: Develop a standard offering and don’t customize
Once you've picked your special thing to offer, you gotta create a Standard Service Offering (SSO). Think of it as a step-by-step guide for delivering your special service in the same awesome way every time. Your offering needs to be something customers find super valuable, and the process should be something you can teach to others. Take Alex from the book, for example. He focused on designing logos and made a manual explaining exactly how it's done. That way, his team could nail it just like him. But here's the key: Once you've got this standard process, don't go changing it for every customer. If you start customizing, they'll keep asking for changes. Sticking to your process is crucial, especially if you ever want to sell your company. Buyers love knowing that there's a solid, repeatable way of doing things. So, keep it standard, and resist any pressure from your clients to customize your offering.
So, in summary, if you ever want to build your business in the future, you need to make sure it can be run without you. You need to pick one service and only specialize in that. You need to also diversify your customers and don’t rely on any big customers for most of your revenues. And most importantly, you should develop a process for delivering that offering that you can teach to others.
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