RING, RING… I picked up the phone. “Mary, we can barely pay the bills. We haven’t gotten paid in three months. We have worked so hard and invested all our money into this business. We need to find a way out – will you work with us?” Panic was in their voice. The business owners were watching their life savings drain away.
To prevent this from happening to you it is best to start with a clear vision of success. When someone starts a venture or project they have the expectation of success. Why would you even attempt it if you thought you would fail? Many dream of success but very few plan for their grand exit. The clearer your picture, the more likely you will achieve it. The sooner you decide what you want, the sooner you can get started moving toward your end goal. The best time to start your grand exit is when you make your entrance.
When you get married you think of happily ever after. To create a clearer picture let’s break it down to specific elements. Happily ever after to me means; to appreciate every day being with my spouse, to have adventures, to raise children, to share meals, to spend time with, to laugh with, to share dreams, etc. Focus on what you can control. By starting with a detailed picture you have a better chance of finding someone that you can appreciate, have adventures with, raise children, etc. The best time to start this quest is before you get married.
For a business owner the grand exit may be a sale to fund their retirement years. Preparing for that grand exit takes time and focus. Focus on what that grand exit means to you. It may be a sale to an outside party, or a transfer to a family member or employees. If you don’t exactly know how you will exit the business – prepare for multiple options. You will exit the business one way or another.
To maximize the value and prepare for your exit they recommend giving yourself years; years to develop the management team and years to create and implement systems.
To maximize the value it helps to view your business from a buyer’s perspective. What will they look for? Here is a list of the key elements.
- Excellent Financial performance
- High Growth potential
- Cash flow
- Recurring revenue
- A Unique value proposition
- High Customer satisfaction
- Strong management team in place
Every year you are in business you can build on each of these key elements. Each of these items help creates a financially strong and stable business. So even if you don’t know exactly how you are going to exit your business, start with a plan to build it to add value. Any plan is better than watching your life savings going down the drain.
So get started now, if you haven’t done so yet.