Often, when a business owner hears what I do for businesses, they think, ‘I’m not ready to exit’. It is true that they are not looking at the date they plan on leaving their business, but there is a big problem with not being ready.
The challenge with this is that being ready is not about selling or closing the doors, it about having a business that could be sold if something were to change. What might change, you ask? Well, the obvious is that you get to a point in your business when you think, “I don’t want to do this any longer”. You have internal decisions, ideas, and motivations that draws you in a new direction. Maybe that is retirement, or maybe you just want to focus on part of your business.
But what if that statement was “I can’t do this any longer”, meaning there was external forces that make continuing difficult or impossible. What if your health is failing and you now need to make significant changes in your lifestyle?
Being ready is not leaving, it is creating something you will have control over in the future, for whatever circumstance your life path takes you through. Here are three ways you can look at being ready.
1. Future Value
By creating a business that could be sold, you create something that has value to another person or entity. Someone else can assess your business and think, I see the value here, I want to own this, because I know this business can continue to make money after I take it over. Future value is tied to all aspects of the business that add value, like the people, the processes, the systems, the market, the brand recognition, the product or service, etc. What is not part of the future value is YOU. Creating a business that can Run Without You, ensures you have a business with future value to others.
2. Easy Transition
If we look at the transition of your business to the next owner, there are several stumbling blocks. If you control all the decisions and all the operational oversight, transition to another person will be very time consuming and will likely reduce the value of the business. No one wants to be a full time employee in the business they built, working for another person, indefinitely. No outside owner wants to buy a business where the operations depend on your continued employment, indefinitely. Look for ways to remove yourself from as much of the operations as possible so that future transition will take less time.
3. Support More Growth
If your business can easily run without your constant care and control, your business has more opportunity to take on more growth. One of the reasons you have not been able to grow (or you have not wanted to grow) is because you simply could not do any more. By creating a business that has systems and process that is known, trained and managed by your employees, you have created something that has options for even more in the future. More growth possibilities means more value and also ensures your transition will be easier, because you are not the one ‘DOING’, you are the visionary and overseer of all that can be.
Now?
These three options take time. They cannot be put into place in a couple months, when you finally say to yourself, “Yes, I’m finally finished in this business, I want out.” If you want a business that has future value, with a recognizable transition process, and lots of opportunity for future growth, you need to start early, long before you are ready to EXIT.
BTW – You may have noticed that I talked about all three of these points as if the business was to be sold. I do this mainly because, when someone else was looking in, with the perspective of a buyer, this gives a critical view that focuses on evaluating what you are doing. It does not mean selling is what you need to do. It may be that you want to have your heirs take over. With that scenario, you can do an estate transition with more success. Following these three points will give you your best results for whichever transition you envision.
This article is 100% original content – The articles you read in this blog are 100% created by Barb Stuhlemmer, not by AI.
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