Tips for buying a business.

What criteria would you use to assess the value of a business you're interested in purchasing?

I heard a recent suggestion that the value of the business begins at zero and every Pound/Dollar above that needs to be justified by the seller. This paradigm shift puts the buyer in a powerful position to negotiate.


Here are my thoughts on factors that would make a good business buying opportunity:
1) Low asking price in relation to comparable businesses. (i.e. Low investment with high potential)
2) A sound business model that has the potential to generate repeat customers.
3) Depreciating fixed assets represent a small proporation of the overall investment.
4) The seller lacks confidence in the value of thier business (sometimes exhibited by a poorly run operation) This will tend to represent an opportunity to quickly add value once purchased.
5) Good management structure.
6) Enormous unrealised potential.


Those are my thoughts... What are your top buying factors?

BTW: here's a great resource if you're considering buying a business: Business Link.

How to generate better luck on large projects.

Today’s topic will include a look at typical project cycles and how to dramatically improve the 'luck' experienced on a project.

This posting focusses mainly on the Start-up and Final Delivery phases of a typical project and answers the question: What can we do during the start-up phase to promote success during the final delivery?

We will approach the answer by first looking at the 'What' and 'Why' before moving on to the 'How' and 'Who'.

So lets get started...

How can we generate better luck on our projects?

Step 1. Make sure you have the end in mind before you start.

• Identify the high-level project deliverables along with the main business drivers. (Business Case)


• These are powerful navigation tools essential for steering the right course.


• Conduct a study of who your Stakeholders are and what benefits they'll want from your project.


• Meet with your customers and ask them to help you to help them. Sounds cheesy, but it's a great way to build rapport and calibrate your approach. This will also demonstrate to them that your project is focussed on delivering benefits and not just another sterile solution.


• Develop an 'Elevator Pitch' for the project and have this adopted by your management team.


• Create a detailed Product Breakdown Structure taking into account the stakeholder input.
  

This takes care of the ‘WHAT’ and ‘WHY’ for your project. Now let’s look at the ‘HOW’ and the ‘WHO’...

Step 2. Conduct a full inventory check on the resources you and your team have at their disposal:

• People, skills, expertise, budget, time, infrastructure, sponsorship support etc.


• Consider the timelines for when these resources may actually be needed.


• Assess any gaps between the project demand profile and what you can supply in terms of resources.


• Work out how to fill the gaps. For example request more funding, skills etc. This is where you show your initiative and resourcefulness.

Step 3. Measure Measure Measure !!!

• There's an old saying: "What doesn't get measured doesn't get done."


• How will you know when you get there?



• Look at the Product Breakdown Structure and work out ways in which to measure the successful delivery.


• Carefully decide on the quality criteria for each one.
• Try applying the GQM method to get started.


• Make sure they are SMART criteria.
  

There is a strong cause and effect relationship between the decisions made at the start of a project and the ease of success of the output.

In short, effort invested in these techniques at the beginning will amplify the luck experienced at the end.

All the best,

P.s. Feel free to comment on this blog with your own experiences.

Make your mistakes early and cheap!

Take too long to deliver and you've missed that crucial window of opportunity!
Someone else gets to market with a competing product and again you've missed the boat!

This is where we can learn from today's entrepreneurs...

*** Make your mistakes early and cheap ***

(Featuring: Five easy steps to consider when planning your next deliverable ;-)

Last year we had a brand spanking new product to launch for a rather large internet start-up that sought to combine three major technologies; Mobile, IM and VOIP. The sheer volume of assumptions we were relying on made management very nervous. Their (quite natural) response was to consider extending the deadlines and increase quality control. Luckily, we managed to convince them to support our, seemingly counter intuitive, approach...
By thinking like a garage start-up we aimed to capture the essence of the business model in a cheaper and simpler solution. We found we were able to gain faster access to the revenue, drastically reduce the time to deliver and minimize the associated risk exposure. We planned several incremental releases that would respond to the feedback captured on the fly. This enabled us to maximize the revenue streams and easily ramp up the complexity. Working closely with these entrepreneurs gave me the idea for this post:

Here are five easy steps to applying the entrepreneur's lesson to your next project:

Step 1) Analyze the core requirement that your deliverable is addressing.
This is very much about WHAT your deliverable is trying to achieve as oppose to HOW. The answer will give you greater flexibility when generating pilot options.

Step 2) Conceptualize a Pilot version of your deliverable that meets this requirement.
As a rule of thumb, aim to scale the solution down to about 25% of the original budget.

Step 3) Plan to pilot this release to a select set of target users.
Identify and engage your customers early. Prepare them for the release and how they can best help out. Make sure you establish several ways for them to communicate with your team.

Step 4) Set-up your development resources to respond quickly to feedback.
Make sure your own team is setup to capture and manage the changes in the following releases.

Step 5) Start planning a series of releases as required.
Be ambitious with your delivery dates. Constantly re-prioritize the tasks to maintain alignment with the overall requirement. Think Triage! Follow this up with a schedule of release dates and commit to them publicly.