I’ve written on this many times, but that will not stop me from writing about it again, because it is so important.
In an article in Financial Worldwide, they wrote: “To maximize value, sellers must be able to steer the exit process by identifying objectives and enlisting the right external help. Prudent company owners prepare for a successful exit well in advance.”
When we are a small business, we don’t believe there will be value in knowing this ahead of time. We might think, “it is not a multi-billion dollar exchange, and it is really only ‘me’ making decisions, so I’ll just decide when it is time.” Of course, you can do this or you can find out if it will be better to prepare, before saying no. Here are three reasons why you might want to start earlier.
1. More Value
When you have a plan on how to exit your business in a way that the business continues without you, you are forced to build a business that can run without you. This focus changes how you set things up, what your expectations are of others, and how you can create process that is transferable to others. When your business does not rely solely on your efforts to make money, it can continue to make money without you.
For instance, I had a client that spent a lot of time writing articles and managing people on top of delivering training, talks, and coaching. When we spoke about how her people could take over some of her work, she was at first reluctant. We reviewed everything she did, and everything her team did, and then we brainstormed who could take on what. Some people were excited to step into different roles. Some were already capable. Some said no to some things and yes to others. She was able to offload her monthly article commitments, and her management of the team, completely, which opened up more opportunities and saw the company grow. Growth was not the goal, but it was the outcome.
The value here is in the transferability of the company when the owner is not the only one doing the work. It also gave her years of time to show this stable financial change, before she was ready to sell. Think about it; if you were going to buy a company, wouldn’t you like to know that you could take over the business without having to hire the owner to come back and teach you everything. A stable financial outcome of that sale would not be sustainable.
2. Faster
If you wanted to close down your business tomorrow, could you? Without knowing the steps required, even simply closing down the business takes longer than you would expected. Now let’s assume you want to sell your business and maybe make a little money to invest in your future. What assets do you have? Who would want to buy it? How do you keep your employees, and your stable service delivery, while you go through the sale? Knowing this and other items, ahead of time saves you from researching, making mistakes, and trying things out while you are trying to sell. In fact, you might not even be able to sell it in the form you currently have, if you have not looked at all the reasons why someone would or would not buy your business.
3. Estate Planning
Let me add a little mortality to the conversation. What if something happens to you? You may have a will, but does your executor know what to do with your business? If not, they are on the hook to research and sell the business, or shut it down. Things you wanted to happen, may not. Good people may lose their jobs. Suppliers lose future sales. The company may be sued. Preparing not only makes your job easier at exit time, it makes it easier for others as well.
If any of these three reasons strike a cord with you, then start your planning now. Build a better, more prepared business now, and you will more easily reap the rewards later, when you are ready to walk away from the business and the business is ready to be sold.
“This article is 100% original content – The articles you read in this newsletter are created by Barb Stuhlemmer, not by AI,
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https://bookme.name/BLITZBusinessSuccess/lite/call-strategic-assessment-session
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