Common Characteristics of Profitable Businesses

As a Business Broker I've had the opportunity to meet with and analyze more than 2,000 businesses. I have come to discover that there are 6 basic characteristics that are almost always found in profitable businesses.

6 Characteristics of Profitable Businesses:

1. The business owner has an firm grip on reality. They understand the good and the bad of their industry and their business.
2. The business owner spends the money to get good advice. They have an accountant, attorney and financial adviser that is competent in the specific industry and size business.
3. The business owner makes a good faith effort to have systems and procedures in place so that their product or service experience is repeatable. The vast majority of activity is done the same way each time. 
4. The business owner is always trying to find ways to do #3 better.
5. The business owner doesn't blame his employees and his customers for his results. It is shocking to me how often this is the case in bad businesses.
6. The business owner owns the business for a reason other than it's just a way to make a living. The owner might want to sell the business to fund their retirement or next venture or pass the business on to their kids or create enough profit to fund a charitable cause important to them or operate a business to allow them enough free time and money to pursue an important cause.

Businesses and business owners with the above characteristics are much more likely to be profitable, more valuable and easier to operate than businesses without these characteristics.

Are there other characteristics that are important to you as a customer? Can you identify businesses with these 6 characteristics?

What's the Value of a Small Business?  Here's your easy to use guide to Small Business Value.

20,000 days...give or take...... that's all we have.......

Live with purpose.......................

Click here for a guide.

The 2% Solution for Disputes among Business Partners and Partnerships

Preparation Avoids Business Partnership Problems that could Kill a Business     

Many people start a business with friends, neighbors, relatives or spouses and it's often a partnership 50/50 arrangement. Rarely is there a written business partnership agreement and this can be a big mistake. These arrangements often work well until there is a problem but then...the problem could be a big problem and the dispute can spin out of control quickly.

Small business partnerships should come with a warning label "Caution: Partnerships work best when the partners document the problem resolution methods before entering the partnership."

Interesting Article on getting farmers help

Some creative Entrepreneurs are on the case  CLICK HERE

Running a small biz is tough, but good and free advice is available!

Excellent info about employment practices for small businesses. The very best medicine is preventive medicine!

Take a look at this blog article by Attorney Alan Bush about overtime perils and pitfalls.

Click Here

Small Business - Management and Leadership Myths and Truths - Small Businesses and Good Employees

Why do so many small business owners say "I can't get good employees?"

The business owner's assumption seems to start from the premise that good employees are either no where to be found or will only work for big companies. In my experience I find both of these assumptions to be incorrect.

There are many small businesses with good employees and I believe there are many people working in large companies who would rather be working in small companies...if....they could find the circumstances that permit it. What's the problem? There are too many small business owners who have poor to terrible management and leadership skills. I meet with hundreds of business owners a year, I know small business owners.

If you want your small business to attract high quality employees here are the things I would focus on:

1. Your integrity - Say what you'll do, then do what you say.
2. Always be respectful to employees and customers, even when you're angry. Whatever anyone hears you say is what they assume you'll say when they aren't near.
3. Even if you know the answer, help the employee figure it out. 
4. Let your employees make little mistakes and then show the leadership compassion when you unscramble the problem.
5. Focus local  for employees, a short commute is high value these days.
6. Don't be afraid to hire people smarter than you...and...when you do hire someone smarter than you let them help you.
7. Focus on total compensation not just the salary. Put in place bonus plans so that when the business does well, everyone does well.
8. Hire slow, fire fast.

That's a start. Get focused on getting better people and you will have the opportunities. Now the real question is, how do you become a business owner who deserves better people?