There's a new resurgence in entrepreneurism today with 147,000 new businesses started last year. The motivation for such entrepreneurism has changed, however.

Traditionally, people started their own businesses to provide a lifestyle of independence and a source of income. It was a long-term deal. Today, more and more companies are being created specifically to be sold.

This change has profound effects on what business owners can and should be doing. In fact, I strongly believe that today, all business owners must be focused on the sale of their companies.

When Did the Model Shift?
Before the industrial revolution, most people were self-employed. They farmed, fished, offered their personal services or goods to the public, and so on. The industrial revolution ushered in the era of working for someone else and the notion of lifetime employment. However, that did not work for everyone, and entrepreneurs left their jobs to start companies and chase their dream (and desired lifestyle).

For much of the past century, the reasons to do this were independence, opportunity and income. Over the last 15 to 20 years, though, increasing merger and acquisition activity gave rise to a new model. People still created businesses for lifestyle, but they saw opportunity to generate real wealth through a sale, merger or an initial public offering (IPO) of their companies. The concept of "exit strategy" came into being.

In just the last 18 months, the frenzy of merger and acquisition activity with dot-com companies has created yet another mindset. Now, companies are routinely being created specifically to be sold, and the sooner the better. This new market, with its rash of instant millionaires and even billionaires, should make every business owner take pause.

If you own a company and wonder, "Hey, what about me?" you are not alone. Many business owners, in fact, are taking the action steps needed to participate in this wealth creation. They are changing their focus. They are concentrating on building the value of their companies in order to realize the true wealth opportunity.

The Company Itself is the Product
Owners who are building businesses to sell realize that the companies themselves are the ultimate products, not the products, services or technology they sell.

The company-as-a-product includes the cohesive sum of operations, systems, management, markets, opportunities, technology and relationships with the company's vendors, customers and employees. Clearly, these are not typically thought of as a company's "products." However, for a company to be saleable, they are essential, and when developed properly, these intangibles can immensely increase the value of the company.

Another critical component of a company's value as a saleable commodity is its image and brand value. A company with a good image and strong brand value is most certainly worth more than a comparably profitable company with an underdeveloped image or brand. Intangibles often make the difference between an ordinary company and one that is sought after by numerous buyers. Business owners who are building companies to sell are creating something that other companies will need.

How to Build A Company to Sell
The first thing to do is "look through the eyes of a buyer." What is your company's potential if someone else owned it? What kind of buyer could take your company to the highest level? Next, determine your company's core competencies objectively. This is something that is very difficult for most business owners to do themselves -- how do you stand back from yourself? - so it may be wise to engage professional assistance. Determine how your core competencies can be transferred to a larger company, or replicated to multiple locations or operations.

For example, in preparing for several recent transactions, we identified internal operating systems and supporting technology that we believed had significant proprietary value. We determined how these competencies could be leveraged by larger companies. Our clients became capable of providing potential buyers with much more than just their ability to generate revenue or profits. This positioning had an immense impact on the eventual sale price we obtained for the owners.

More Must-Do Items to Build to Sell
The second must-do item is to know who your buyers might be. Ask yourself, "Who wants what I have and can do more with it than me?" The answers can often be found in your systems, processes, people, technology, teams, training, suppliers, customers, locations, geography or some combination of these. There is an adage we constantly use in our business: "Buyers seldom buy what the sellers think they're selling." You must know why a buyer will want you.

A very important function performed by merger-and-acquisition professionals is identifying prospective buyers. This is a creative process that couples the value of your company's competencies and capabilities with the professionals' extensive knowledge of types and kinds of businesses. It is an expansive exercise that should be revisited from time to time. Whether you use professionals or you develop your own list of buyers, it is paramount that you build your company knowing the type of buyer that needs what you have.

The third to-do is to enhance the competencies and intangibles that make your business attractive. To do this you must become familiar with your potential buyers' worlds. For example, if you have a manufacturing process that you believe could be applied to medical products, you should attend medical product trade shows, join associations and read journals to learn where they are going, the state of their processes and what they need. This may provide you specific ideas to incorporate into the business now. That is building value.

Fourth, consider alliances and partnerships to leverage what you already have. For example, we worked with a company in the ink business that found another company with better light-fast technology. By licensing that technology, the ink company immediately doubled its value to those who understood the synergy.

Fifth, deal yourself into a global strategy. This is part of making your company bigger than life (with a bigger price tag). Of course, the fastest way to go global today is via the Internet.

Sixth, understand lifecycles of both products and companies, and how those apply to you. The key is to sell your company when future opportunity is greatest, not when past history is greatest. Buyers want the future potential, not yesterday's news.

Finally, while there are nuts-and-bolts actions to take (in financial, management and operational areas), you need to do one more big-picture thing. Keep your exit strategy firmly in mind ("resident," to use a computer term) every day. Think about it and let it influence every major business decision. That will keep you focused on building the strategic value of your company and creating wealth instead of a job.

Phillip L. Currie is Managing Partner of Shoreline Partners LLC, a San Diego-based, middle market investment banking firm that handles sales of privately held companies with $10 to $200 million in revenue and acquisitions for public companies. Currie can be reached at 858/587-9800 or via Email.