Successful, active business owners seldom slow down. Many business owners are great at planning for their businesses and terrible at planning for themselves. There are so many business challenges to tackle that planning for your personal ownership future can get pushed to the back burner. We all know that the only things likely to reduce your pace of work are death or terminal burnout. This is not to imply that you are not well intentioned; quite the contrary. You may be so well intentioned that you are responsible for more tasks than you can possibly complete.
Today, our goal is not to alter the number of hours in your workday but to alter your mindset. To do that, let’s look at the story below.
Renaldo LeMond owned a growing hospitality services business. As business increased, he hired more employees and learned to delegate. Both these improvements freed up time to sell more, to manage more, and to grow the business more.
No matter how much LeMond delegated, there were always additional tasks and new priorities. His daily activities left no time to plan. Even if he could find the time, LeMond really didn’t know how to create a plan that created definable steps subject to deadlines and accountability.
This was LeMond’s situation when he was approached by a would-be buyer for his business. He hadn’t actively considered selling his business, but at age 49, he was beginning to think that life after work might have something to offer. He was open to talking about and exploring the idea of selling his business because business growth, and more importantly, profitability, had been slowing for years.
LeMond found an hour in his schedule to talk to the interested buyer. In only 60 minutes, his blinders were removed and his priorities were turned upside down.
The buyer turned out to be a large national company seeking to establish a presence in LeMond’s community. It was interested in his business because of its reputation, as well as its broad and diversified customer base. The buyer was looking to acquire a business that could grow with little more than financial support.
Naturally, it sought a business with a good management structure because, like most buyers, it did not have its own management team to put in place. LeMond, however, had not attracted or retained solid management, nor had he created a plan to do so. His business lacked this most basic value driver.
Like many buyers, this buyer also looked for two other value drivers: increasing cash flow and sustainable systems throughout the organization (from Human Resources to marketing and sales to work flow). LeMond quickly realized that his business was a hodgepodge of separate systems, each created to patch a specific problem.
Finally, the buyer asked LeMond to describe his plans for growing the business. LeMond had none. What this buyer and LeMond now understood was that this business revolved around LeMond.
As he left the meeting, LeMond expected that, given his company’s deficiencies, he would receive a low offer from the buyer. He waited weeks but no low offer was forthcoming. In fact, the buyer disappeared.
The message is clear: Unless a business is ready to be sold, many buyers, especially financial buyers, are not interested. They have neither the time nor the in-house talent to correct deficiencies. The look for (and pay top dollar for) businesses that are poised for ownership transition.
It is a fact of life for owners that unless you work on your business, not just in your business, you will never find time to plan for your future and for the future of the business.
Is there a way to change your priorities before your 60 minutes with a prospective buyer? Of course. You simply acquire new knowledge (about exit planning) and apply it to your life.
Exit planning requires time: time not only to create the plan but also to implement it and achieve measurable results. That timeline may be considerably longer than you anticipate because in creating an exit plan, you need to rely on others who are also busy (at minimum an attorney, CPA and financial planning professional). Also, you can not anticipate all of the issues that might arise, and it is unlikely that everyone you work with is as motivated or experienced as you are. Finally and inevitably, not everything will go as planned.
Exit planning encompasses all sorts of planning: your growth, strategic, tactical and ownership succession planning for your business, as well as your personal financial and estate planning. By wrapping business, estate and personal (or family) planning into one process, exit planning is all-encompassing rather than a subset of the planning that you are sure you will one day undertake. In short, there is much to do.
It may be helpful here to recognize that planning, properly undertaken, can help enrich your business as well as your personal life. According to Brian Tracy, "A clear vision, backed by definite plans, gives you a tremendous feeling of confidence and personal power." The same is true for exit planning.
The Cornerstone team includes former C-Level executives, successful entrepreneurs and advisors who offer unmatched experience in delivering advanced, custom-tailored, results-oriented solutions for business leaders. As a member of the Business Enterprise Institute (BEI), Cornerstone is an authorized distributor of BEI’s content and Exit Planning Tools. We developed the Performance Culture System™ to help clients implement best practices and drive high performance throughout their organization. For more information, visit www.launchgrowexit.com, call (910) 681-1420, or email [email protected].
With the New Year here, many businesses are busy planning and forecasting via a fresh start. For those operating by fiscal year, however, st...
Various network marketing companies – such as Avon, Thirty-One, Rodan + Fields and Mary Kay – attract a number of would-be entrepreneurs, es...
More than 15 years ago, experts predicted that explosive growth would come sooner rather than later to Brunswick County. Although the Great...