Every Business Owner Must Have a Plan to Exit or Sell
Kevin Brownlee, Agora Strategic Consultant
Most companies fail to plan. Studies show that 90% of business owners in the United States have no plan in place to exit their business in a proactive manner. When those businesses do try to exit or sell, 80% will not complete the transaction and will sadly just cease to exist! Not having a plan kills any chance you have of creating value and a successful transaction.
You need to Paint a Picture of Success! What does success look like and what do you need to do to get there? Your picture should have at least two main components:
1) A picture of what your business should look like.
2) A picture of your exit goals.
First, you must have a plan of where you want your business to go, what results you want to achieve, and what your success looks like…and work that plan. Really successful companies have those three articulated and align their efforts to meet them. Included in that is also setting the stage for a thriving exit.
Second, picture your exit. What does your business need to look like to get the kind of value you would like to see? What assets, products, services, customers, processes, and trained replacement personnel do you need to have in place to position your business for a successful transition? What about your leadership continuity, employees, and vendors? Picturing success is the first step in creating success!
Your Business Picture
If you know the game of baseball, you will know that it can be pretty complicated. What pitch to throw? Where to position your fielders? Do you hit and run or just steal a base? Yet when you break it down baseball only consists of 3 things – throwing a ball, catching a ball, and hitting a ball. If you can master these 3 basic things, you will be a very successful ball player!
Business can also be very complicated, but if you can master the basics, you will have a successful business and create a good exit.
Your Picture of Success should concentrate on these simple basics:
1. An effective sales capability;
2. Products and services that fill a need and I can get paid appropriately and allow for a reasonable profit;
3. A happy and loyal customer base;
4. Wonderful employees and low employee turnover;
5. A supply chain and operational capability that delivers value to my customers – on time, with good service, and at a reasonable cost;
6. An effective amount of working capital and little or no debt;
7. Strong and growing net income;
8. A wonderful impact on our local community;
Picturing success is the first step in creating success!
Your Exit Picture
What would you like your exit or transition to look like? At the termination of your involvement as an owner, what would you like to see? What would you like your final “pay-check” to look like? What will you be doing the day after you close? You can really have fun with this!
Here are a few things that might be in your picture:
1. The characteristics of my buyer – financial, strategic (industry company), large, small, flashy, quiet, national or regional, able to bring capital and grow my business, respectful of my employees and my values, etc.
2. Do I want to stick around awhile or do I want to head for the beach?
3. What do I do next?
4. Do I have a specific or target price in mind?
5. Do I share my proceeds with my employees?
6. What should my legacy be?
Remember the old adage – Failure to plan is a plan to fail. Take time to create a solid, well thought out, realistic plan.
Knowing where you want to be and how to get there is the most important thing you can do to Dramatically Increase the Value and Probability of your Company’s Sale/Exit.
At Agora Strategic Consulting, our Transition Consultants are experts at helping you paint your picture of success, including a successful transition or sale…we’ve done so with over 400 companies! We are surprisingly affordable, and have 100% positive feedback! Contact us today!
We are so focused on helping you, we even have a FREE guide so you can start the process on your own! You can download it by visiting our web site and clicking on the popup “Selling Your Business With Confidence” at www.agoraconsulting.us