For motivated business founders, the route to exit is often seen as limited. Selling to another company, trying to hand over to the next generation or simply closing the doors having bled enough money out of it while it is still running.
There are so many more options, and each option is not mutually exclusive to others.
The harsh reality for many business owners is they either:
- Stay in the weeds of daily operations and never get to plan what needs to happen to allow them to sell – leaving them with fewer choices (sometimes no choice at all)
- Tell themselves “they are never leaving their business” – which is sticking their head in the sand because 100% of business owners DO leave their businesses; no one is immortal
Or
- Hope for an offer to randomly land and then let the buyer take the lead because they don’t know what the process is and how to prepare fully. Often giving away a lot of value that they could have kept for themselves.
Too many great businesses are floundering in mediocrity for the lack of knowledge as to what makes a great business. Too many business owners are reducing the value of their businesses by working long hours and keeping their businesses reliant on themselves.
Significant value and potential is being lost to the UK economy as a result of poor business transfers between one generation and the next.
The one thing I understand is the problems that businesses and their founders experience when they are trying to get value from their lifetime of work.
Having built my own companies from scratch and come to the rescue of businesses that are on their knees (the owners are usually literally on them and desperate to extract the value they’ve put in!), I know what it takes to get from unsaleable to exit success AND how businesses get exit ready in the first place.
If you want to benefit from the value locked in your business, the best thing to do is to start thinking about what it is YOU as the owner want out of your business. If you are just starting out, beginning with the end in mind is a great place to begin. It is much easier, cheaper and quicker to plan successful exit options from the start.
If you are already a significant way along your business journey, now is a good time to take a deep breath and think about what needs to happen for you and your family to benefit from all the value you’ve built.
Now is always a good time to think about “what next” and “what if?” No one knows what’s going to happen tomorrow but being prepared for the most common likelihoods means the assets you’ve been building over your lifetime are protected, and your family are looked after. It just takes a bit of planning and preparation.
That said it is not easy, it is still hard work
When I started writing my book SELL IT, I kept in mind an old colleague from +20 years ago who set me off on my mission to improve businesses. To protect the privacy of his family, let’s call him Trevor (he is a real person).
Trevor had left school at 17 because he’d got his girlfriend pregnant and “did the right thing” and married her (it was the early 70’s). He struggled through a couple of jobs before realising that he could set up on his own. He started building a product in his garage when he was 24.
By the time he was 35, his business had moved into new premises and Trevor was employing 20 people. He’s also bought in a business partner to get the business growing and take the pressure of himself as being the only decision-maker.
Life was pretty good, he now had 3 children, a bigger house and more outgoings. Roll forward another decade and Trevor met the love of his life – and decided to make a massive life change. He left his wife and started divorce proceedings. He bought a new house, solely in his own name. He started preparing to marry his new lady. It all looked like a bright new future in a new life. And he started to think about how he could spend less time at work in the business.
Trevor did not have a will. Or a shareholder agreement with his business partner. In fact, they’d been so busy building the business that they hadn’t really thought about how they would protect the value they were building. They were both heads down, getting on with keeping the wheels turning of what was now a £10m turnover enterprise.
Trevor was still a big part of the business and managed ALL of the customer relationships. His business partner was the back-office guy and kept the wheels of the operations in motion. He was also a minority shareholder and had limited voting rights but that was ok because of the verbal agreement that he had with Trevor about the future of the business.
While Trevor was making the new house ready for his new wife, and he was still legally married to his first wife, he fell off a ladder. This triggered a devastating chain of events. Sadly, Trevor died.
With no will, his estate transferred to his not-quite-ex-wife, including the house he bought with the intention of living with his new lady. His embittered wife decided she wanted to become involved in the business despite knowing nothing about it. The shareholding transferred to her and gave her voting rights and the rights to appoint directors.
With no clear instruction, this allowed her to start spending company funds on all sorts of activities that didn’t add value to the business. She decided to take over sales and marketing. She crushed the spirit of the team and they started to leave. It was a disaster. Within 2 years the business was closed, and a significant amount of the value was lost – as well as nearly 100 jobs.
How do you increase your opportunities for successfully protecting and extracting the value of your business?
This book shows you a tried and tested framework – S.E.L.L.I.T. – showing you options and “what needs to happen” so that you can do the right things in your business to get a richer, happier future. Often, it’s doing less that allows both you and your business to thrive.
Each stage of the process allows you to plan, review and decide on actions that have a direct impact on the value of your business without wasting precious time and cash. You’ll learn how to add value and enjoy the process and get more value along the way.
Life is hard enough without having the extra pressure of learning how to sell a business effectively when you don’t have the experience or knowledge – or the time to learn.
Being exit ready takes the pressure off you. When you know what you need to pay attention to BEFORE you have to leave your business, it makes it easier to get ready. It is much better to be prepared and be proactive than reacting to circumstances. You’ll be less stressed, more productive and a much better leader of your business as a result – and your family and friends will thank you for it too!
Click here to contact Christine 0r by email alternatively you can book a call with the Business Mentor of the Year 2020, author and speaker. Who helps business founders get their businesses exit ready so they can enjoy a happier, richer future. She saves them THOUSANDS and increases the value of their businesses by MILLIONS.