On your journey from service firm to sell-able company, you need to rethink the words you use to describe your company and its business. Take for example the way a company called “The Ad Agency” describes themselves on their website:
Since 1982, The Ad Agency has been recognized as one of the pre-eminent full service marketing, advertising, design, and public relations firms serving a regional, national, and international client base. As an aggressive and agile firm, we believe in the fundamentals of communication strategies and have developed a reputation for effective, on-target marketing. We are known for building and positioning brands and maximizing the exposure and response to our clients’ marketing efforts.
Words like “full service”, “firm” “client” telegraph that The Ad Agency is a service firm. There is nothing wrong with that, but ad agencies and similar service businesses are notoriously tough to sell for anything other than an earn out.
Potential acquirers will look carefully at how you describe your business to the public. You need to project that you are a business and not just a collection of temperamental service providers. Here’s a list of the top 9 words to erase from your vocabulary:
- “client” (change to “customer”)
- “our firm” (change to “our company”)
- We aspire to be the “trusted advisor” of our clients (anything other than this over-used cliché )
- “practice area” (change to “area of expertise”)
- “professionals” (change to “employees” “people” “management”)
- “proposal” (change to “price list” once you have created your Standard Service Offering)
- “alumni” (change to “former employee”)
- “per diem” (stop charging for your time and start charging for you Standard Service Offering)
- “engaged by” (change to “have a contract with”)
If you want an acquirer to see your business as worth buying, stop using the tribal language of the service provider and start using the language of a sell-able business.
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What I really like about John’s thought-process is his instinct to always start at the end and work backwards. If you conclude that you will sell your business one day, you will make better decisions today to create sustainable value. For owners of service businesses this blog is loaded with some powerful, practical and poignant tips. If you are taking pre-orders for your book — sign me up for ten copies!! I can think of lots of customers (not clients) who are making most of the classic mistakes you point out.
A word that I would like to see go away from sales lingo is the word “educate,” as in “educate my customer about the benefits of my product.” A senior VP does not want to be schooled by her sales rep. I would swap that with “inspire,” as in “inspire my customer to believe that they have found a solution to their business challenge.” Senior executvies who are inspired will take ownership of the evaluation process till the sale is closed.
Thanks Tom. As someone once told me, if you build a business that is sell-able, you at least have the option to sell even if you opt not to!
PS. the books are on their way!