Ready to Exit? What Does It Take?
Being an entrepreneur is, to say the least, challenging. While being an entrepreneur is filled with opportunities beyond your wildest dreams, those dreams can also become the nightmare you never wanted.
Working with business owners, I find most of the challenge is in the day to day operations of the business. Working day in day out, to deal with cashflow, hiring, firing, marketing, selling and servicing customers can be a 24/7 job, unless you know how to start running your company and stop having your company run you. If your company runs you, you will burn out, it’s just a matter of time. What happens next is you want OUT. You want out of the business and have no idea how to make that happen or what to do next.
The truth is, we will all exit our business at some point. For some it is a well planned and executed event, for others it is a reaction to a set of circumstances that can be either personal or economic. What really matters in each situation is the ability to have control over the end result.
You may have heard the phrase “Begin with the End in Mind.” The concept is to start and then run your business with the mental attitude that you will exit your business and know the result that you want in the end.
In this situation, your CPA, attorney, business brokers and business coach will all tell you that you need to prepare, plan and have your business perform as well without you as it does with you. This doesn’t happen overnight, or even in the first few years of running the business. But you still have to spend the time building an operation that has the right systems, a great team, financial checks and balances so you can get the desired value out of the business when you leave it.
Here are 2 examples: First, say you own a company that has the training and documented (yes that means in writing not in someone’s head) systems in place for all aspects of how the business operates. You track all critical Key Performance Indicators (leads, conversion rates, average dollar sales, revenue trends, profitability etc.) You have a team that knows what to do and how to do it, that carries what I call an above the line attitude (ownership, accountability and responsibility). The business is profitable month after month, quarter after quarter. The executive team knows the vision and mission of the organization and executes to it – even in your absence.
Now let’s look at another hypothetical company, one that is built around your strengths. Customers want to deal only with you. You are often turning over team members. The team doesn’t perform the way you want them to and is constantly blaming others. They have excuses and most deny that any issues are their fault. Cashflow is unpredictable and profitability is a word not often in your vocabulary.
Which business would you want to purchase? Which business will be easier to get a higher valuation and sell? What makes the difference between the two business owners and the results they receive?
After having run businesses for 30 years and now coaching business owners for many more, there are a couple of principal differences.
- Practice the concept that “Today Matters” What do you do each day in building your business makes a difference in the long run. Each day do at least one thing that isn’t working in your business, but “on” your business. Have written specific goals that steer the business in the right direction. Read the book by John Maxwell – “Today Matters” for very practical tips
- Learn the power of leverage. Document what you do, how you do it and train others. Hire differently than your competitors. Hire on attitude first, skills second.
- Know your Key Performance Indicators for financials, team, customers and overall business. KPI’s will help you see trends both good and bad and allow you to plan accordingly without reacting.
- Have a team of outside advisors who hold you accountable to results. Whether you have run a business for 2 or 20 years you need someone from the outside challenging you to look at things differently and push you outside your comfort zone. Eleanor Roosevelt stated: “Do something every day that is outside your comfort zone.” That keeps making that zone larger and larger.
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