I was talking to a new client recently, and when I mentioned that one of the things I do is Exit Planning his response was, “Exit Planning, I’m not ready for that.”
He was just starting his business and was relatively young. I thought about that and responded, “Exit planning isn’t about exiting, it’s about planning.”
You can’t wait until you are about to exit your business to start planning. You should be planning today, so you can be ready, no matter when you exit. You need to put systems and processes in place to add value to your business. You’ll benefit from that added value today.
Two of my nieces recently got married. About a year in advance they booked a wedding hall for the reception, hired a band and a caterer. Pretty much all the planning was done long before the wedding. Wedding planning is more about planning and not as much about the wedding itself. What would happen if they tried to hire a band or a caterer on the eve of the wedding? How about a reception hall? It might be a disaster. Fortunately, they averted disaster by properly planning for success.
Last month, I booked my vacation condo in Marco Island, Florida. We leave on December 14, 2019 and will be there one week. About two months in advance of this date I will confirm my car rental and airfare. Far in advance of the trip we’ll start to plan our itinerary because vacation planning is not so much about vacationing as it is planning. You can’t plan a successful vacation the day before you leave, or you may encounter some trouble.
Business owners shouldn’t expect to obtain the highest value for their business if they wait until they are ready to retire to begin planning. Unless you are a serial entrepreneur, you only exit your business once and you need to get it right. Your future happiness depends on it. Many owners have as much as 95% of their net worth tied up in their business and, according to various research groups, many have spent more time planning their vacation, if they’ve even taken one, than they have preparing for the single most important liquidity event of their lifetime.
To get the highest return on the your company, it must be as valuable to a potential buyer as it is to you. What drives value? What does a buyer value?
Take this free 22-Q assessment to gain a good idea of the things you can do to add value to your business. If you start today, you’ll have plenty of time to implement the strategies that will add the most value to your company and avoid problems. If you’re an adviser, think of the clients that can benefit from taking the assessment and forward this information to them.
And I am willing to help. Call me at 330-650-4033 after you have completed the assessment and I will go through the answers with you and help where I can.