Every business owner has a big dream for their business and wants to make it happen. The problem is many business owners don’t have a clear strategy of how we’re going to transition the ownership and management of the business to another party because we’ve done no planning. We have our heads down working in the business and haven’t spent the time working on the business, especially the succession plan. Years later, it hits us. We’re ready to exit, but have no plan. What decisions must be made and are the decisions we’ve made helping or hurting? Reality sets in. Am I the obstacle that’s standing in the way of a successful exit because I just don’t want to leave my business or don’t know how?
I’m working with several businesses with multiple owners right now. One company has been in business for almost 20 years and has built a great business. They are thinking about an exit, but the business labor force is centered around the two owners. If they exited their business today, it would be for significantly less value than if they continued to build it. So, we worked together to create a plan.
- Set clear goals and objectives. These two owners have a good idea of how much they want financially to retire and some clear objectives on how to get there. They’ve factored in taxes and any debt to be paid.
- Create a plan. Their plan includes investing in marketing with a new website and messaging, building out their staff in sales and operations, and documenting business processes. A business plan is a roadmap for our company. It will help us to stay on track and to make sure that we’re making progress towards our goals.
- Get the right team in place. We can’t do it all on our own. We need to surround ourselves with talented people who share our vision for the company. This company in particular needs more sales and operations staff, so that’s the focus when hiring new employees.
Sometimes a lack of planning or an owner thinking, “I just don’t want to leave my business” are only one layer of the onion. Upon peeling several layers, other underlying issues getting in the way of exiting may be:
- Your business may not be in good financial shape. Buyers are more likely to be interested in a business that is profitable and has a strong track record. If your business is struggling financially, you may need to make some changes before you can sell it.
- You may not have the right buyer. The right buyer for your business is willing to pay a fair price and who shares your vision for the future of the company. It may take some time to find the right buyer, but it’s important to be patient and persistent.
- You may be emotionally attached to your business. It’s natural to feel attached to your business, especially if you’ve built it from the ground up. However, if you’re serious about selling, you need to be able to let go of your emotional attachment.
- You may not be ready to retire. If you’re not ready to retire, you may not be ready to sell your business. Selling a business can be a lot of work, and it’s important to make sure you’re up for the challenge.
Ask yourself, “Am I standing in the way of my business exit?”. If so, this article is just for you. A dream without a plan is just a wish. Make a plan and work your plan. It’s never too early to start.
