Built to Sell - Creating a Business That Thrives Without You

I had the pleasure to interview John Warrillow the author of Built to Sell, Creating a Business That Can Thrive Without You. Now, as a business owner… the concept of allowing your business to run without you is an excellent proposition! It reminds me of the robot vacuum. What a great invention! The book is an excellent read and I recommend it to anyone who runs a small business.

Tell us about yourself. How did you get started?

I used to produce a nationally radio show called “Today’s Entrepreneur”. We interviewed a different entrepreneur every day of the year for three years. Based on the radio show, I wrote about what drives entrepreneurs in my first book and then started a couple of companies – one of which was a research business where we ended up interviewing 10,000 business owners a year on behalf of our subscribers who were big companies like HP, Microsoft, Google, IBM and Apple. That company was acquired in 2008 and now I write (columns for Inc.com and BNET, latest book “Built to Sell”) about my experiences studying and being an entrepreneur.

How can people market more effectively? What techniques can they use?

I think a lot of service companies have a tough time marketing their service because service is something you have to experience to understand. I recommend service providers “productize” their service like Tide markets its laundry detergent:

Name it

Tide is the brand and is always written in the same font. Having a consistent name avoids the generic, commoditized category label of “laundry detergent.”

Package it

We use the “2 X Ultra” version of Tide, which is packaged in a unique bottle with two pour spouts. The depression knob spigot allows us to carefully measure out a dollop of Tide, whereas the twist cap provides quick flow. Service providers need to think about the packaging of what they sell at every customer touch point.

Write instructions for use

Tide gives customers instructions for best washing results. If you want your service to feel more like a product, include instructions for getting the most out of your service.

Provide words of caution

My Tide bottle tells me that the product “may irritate eyes” and is “harmful if swallowed.” Provide a caution label or a set of “terms and conditions” to explain things to avoid when using your service.

Barcode it

The barcode includes pricing information. Publishing a price and being consistent will make your service seem more like a product.

Copyright it

P&G includes a very small © symbol on its bottle to make it clear that the company is protecting its ideas.

Once you have “productized” your service, consider changing the way you talk about your business. Replace the words usually used by service providers with their equivalent used by product companies:

Change “firm” to “business”

Change: “client” to “customer”

Change: “engagement” to “contract”

Change “Principal” to Vice President”

Change “Associate” to “Manager”

What are some of your favorite business strategies?

I think the most important strategy a business owner can pursue is to make sure their business can thrive without them. I have found the secret to scaling up a business is to narrow down a set of services and products to just the ones that meet three criteria:

1. Teachable: they have to be teachable to employees (or you can program technology to deliver)
2. Valuable: something that you do better than any one in the world so it is not commoditized
3. Repeatable: customers need to repurchase regularly creating an annuity stream

What is the fundamental rule for allowing your business to thrive without you?

Most business owners use their Profit & Loss statement as their report card at the end of the year but there is another report card that is just as valuable: your Valuation Statement. Sometimes what makes you more profitable will actually make you lest valuable. For example, if the business owner personally does most of the selling in a business, that can make a company more profitable in the short term (since you don’t have to hire sales or service staff) but much less valuable because a business dependent on its owner for sales will be heavily discounted or even worse – it can be worthless.

You talk in your book about marketing by becoming an expert. How can someone do this?

I think it’s dangerous to become an expert personally. Instead, you want you business to be an expert. My suggestion for experts who are trapped with customers asking for them to personally handle their project is to get out of the “Break / Fix” mentality of fixing people’s problems and get into the business of preventing them. For example:

• The IT services company can train a part timer to monitor a client’s network and install the latest virus protection software updates but it often requires the owner to rid a network of a virus once it has invaded.

• The heating and air conditioning company can dispatch a relatively green associate to perform a basic set of preventative measures to keep a furnace clean and efficient but may need to call on the owner’s expertise to fix a furnace that has gone on the fritz.

Do you see a difference between the marketing of BtoB and BtoC?

Sure, lots. One key difference is when you’re marketing to a consumer, you know who you’re talking to. When you’re marketing to a business, you need to ensure your message resonates with the right person (e.g. receptionist vs. sales manager vs. owner)

How did you learn so much about running a business?

By making every mistake possible. Twice. I’m a slow learner.

It’s easy to feel success in good times. What about in the bad times?

One of my mentors said that for a business owner, the emotional highs and lows are so pronounced, it is important not to ramp up too high on the highs and not too low on the lows. He said that, “it’s probably never as good as it feels on the good days and never as bad as it seems on the bad days”. I’ve always remembered his advice.

Please explain about the concept behind Built to Sell

A business owner who has a company that is “Built to Sell” has the best range of options available:

• run the business without the stress of dealing with the details and cherry pick just the fun jobs

• grow beyond the ceiling blocking most owner-dependent businesses

• install a manager and become a shareholder,

• or—if the price is right—sell it.

How can people buy your book, Built to Sell?

Anywhere you buy books. Go to BuiltToSell.com for a list or:

http://www.amazon.com/Built-Sell-Creating-Business-Without/dp/1591843979/ref=ntt_at_ep_dpi_3