The Business For Ultimate Exit” (Lesson 9)
I always know a business owner has not focused on building the value of their business for the ultimate exit when I ask them this question: “When was your last vacation?” and they can’t even answer because they can’t remember!
I also see this blind spot show up clearly every time I engage with an employee of a company and that employee does not understand the company’s vision. When you’re too focused on running the business and preparing for exit, you might be leaving your staff in the dark.
You don’t necessarily want to tell all your employees that you’re thinking of selling or leaving your business, but you definitely want to keep them engaged in the business. You’re finishing your marathon. Even if you’re tired and winding down, you want to make sure that your employees continue to see they have a future so they don’t jump ship.
If you’re too focused on running the day-to-day business and not trying to plan for the ultimate exit, you still don’t have the right systems in place. You don’t have a recurring revenue model set up, you haven’t differentiated yourself in the marketplace, and you probably still don’t understand who your ideal customer is, which means you’re not reaching them consistently.
Worse, you might even have some customers that feel forgotten. You’re so busy running the business and focusing on what’s in front of you that you’re not maintaining the relationships you have with your existing customers. This leaves customers feeling ignored or forgotten.
You might be thinking you’re always putting out fires, but you haven’t got your eye on the fire that matters most: the business that’s aglow with life, and keeping it burning bright for your successor.
The One Sale That Really Matters
It’s common for business owners to enjoy doing all the work. I see this often. It feels nice and comfortable, you know how to do things, you feel in control.
But beneath this lies the truth that perhaps you’re afraid of what’s involved in actually overseeing the business. Managing people is a challenge if you haven’t had to do it before. Crunching numbers is tough if you’re not a numbers person. And crafting visionary growth plans is a skill of its own.
Still, this is no reason not to consider an exit plan for the business. Have you even considered selling your business? Or do you figure you’ll just stop eventually?
It’s not entirely uncommon for business owners never to consider retirement. But if you are doing this, it means you are also not considering what will happen to the business after you retire.
What happens when you start nearing retirement and you want to exit? All too often I’ve seen people get hit with a health issue and suddenly have to leave their business. Wouldn’t you rather avoid a sudden scenario and figure out your exit plan ahead of time?
From a legal standpoint a company is considered an ongoing entity. A company never dies like people do. This is why as business owners we have to remember to think of the life cycle of a business, and especially the end part of that life cycle.
Of course, even if you realize you need to exit someday, you may not be considering a sale. You might think you’ll just pass the business down to your kids. Thinking this way might trick you into believing you don’t have to make sure it’s a valuable company, because your kids are just going to inherit it.
The big mindset shift you’re not making is that, ultimately, at some point, your attention needs to move to selling your business. Failing to recognize that it’s time to focus on your business as the product and let go of the day-to-day sales leaves you unable to plan for the one sale that really matters.