Build a business worth selling, even if you never sell it

A job you own, or a business?

Michael Gerber's The E-Myth Revisited makes a sharp point: many small-business owners haven't built a business at all. They've built a job they can't quit. If everything depends on the owner, there's little to sell, because the value walks out the door when the owner does.

John Warrillow's Built to Sell tells the story of a service-business owner who turns his company into something sellable by standardizing what it sells, documenting how it's done and stepping out of daily operations. The lesson applies whether or not you ever plan to sell.

What makes a business valuable

• It doesn't depend on the owner. Clients, processes and decisions don't all run through one person.
• Revenue is predictable. Monthly plans, contracts and repeat clients are worth more than one-time projects.
• No single client dominates. See concentration risk on Clients & Pricing.
• The work is documented. A new owner can see how things are done. See Systems.
• The books are clean and trustworthy. Buyers and lenders want records they can verify.
• Profit is healthy and growing. Small businesses are often valued as a multiple of the owner's earnings, and the multiple depends heavily on the points above.