One of the occupational hazards of writing about building a sellable company is that I’m constantly evaluating businesses for their ability to be sold — even when I should be focused on other things.

My wife arranged a sitter last weekend so we could go on a date. Unencumbered by kids for five glorious hours, we spent the day wandering around downtown Toronto. The only real fixed appointment we had was for my wife to get her hair cut by her favorite hairdresser who had just changed salons. As I waited for her to emerge, the only thing I could think about was the low multiple that a mom & pop hair salon would fetch. The business of cutting hair has some brutal attributes:

• Customers are loyal to their stylist (not the salon)
• No standard systems — each stylist seems to have their own approach to cutting
• Pricing seems to be subjective based on a mixture of how long the customer is in the chair and how well they know their stylist

We leave the salon and a few blocks later stumble upon this poster hanging in the window of a law office:

Here is a law firm – arguably one of the least scalable businesses around — trying to add some standardization to their business by pricing a set of standard services, packaging them like Procter & Gamble and merchandising them in the window like Macy’s.

I have a friend who is a lawyer and judging from his schedule and stress levels, I think law firms typically suffer from some of the same ailments as hair salons:

• Highly dependent on their employees
• Customized service for every customer
• Pricing that seems arbitrary to the uninitiated

To her credit, it was my wife who pointed out the comparison of the hair salon and the law firm because she knew I’d want to write a story about it. Now maybe I can start being a better date.

Last week I wrote 3 articles for The Globe & Mail that I thought you might find of interest:

Business in a small town can be a tough sell

– published March 23, 2010

Imagine owning a business in the year-round outdoor sports playground of Fernie, B.C. — powder skiing and single track in your backyard. Or being the CEO of your own firm nestled in the heart of Prince Edward County’s wine region in Ontario.

Does it sound like an idyllic life? It could be … until you try to sell the company. A smaller town can pose unique challenges given the more limited pool of immediate potential buyers and the speed at which news spreads.  » more

Is $13.25 reasonable for a cup of coffee?

– published March 24, 2010

This morning started as most mornings do around our house: Blurry-eyed, I went to Starbucks for a grande Americano. It cost me $2.65.

I could have ordered a regular drip coffee or even brewed one at home, but I’m lazy and I’ve become addicted to the powerful jolt of three shots of espresso in the morning.

Now $2.65 for a coffee may not sound like a big deal, but if you’re preparing to sell your company, that coffee may be costing you four or five times that. »more

Don’t make a business of your hobby

– published March 25, 2010

They say all you need is passion to start a business. I don’t buy it.

People who are too passionate about their company create a job, not a business.

Take, for example, a young person finishing school who is encouraged to start a business around “something they are passionate about.” Having enjoyed photography as a hobby, they might open a photo studio and offer to shoot everything from weddings to food ads to T-ball teams. They are good at what they do because they are passionate. Customers like them because they are passionate. Subjects give them their best smile because they are passionate. »more