As we enter the festive season (ugh – I’m coming over all ‘bah humbug’ just writing the phrase), many people take the increasingly long enforced break at the end of the year as an opportunity to take stock of their lives, their achievements – and to start making mental plans for their future.
When I had the marketing services business in Oxford, I often wondered how many of the staff would come in to the office on January 2nd and hand in their notice. Likewise summer holidays.
Sometimes a couple of weeks away is just what’s needed to stimulate plans for the next stage of the adventure we call life.
When you’re running your own business of course, the operative word is ‘running’. Running to keep up, get ahead, or sometime just to stand still. Constantly on that wheel, trying to make it turn a little bit faster.
And very rarely taking the time (finding the time, making the time) to stop and think where all this is taking you. Is there a master plan, with an end-game, or is it just more and more of the same until the Grim Reaper knocks on the door?
Very few claim to want to exit their business in a wooden box, and fewer still want engraved on their tomb-stone, “I wish I’d spent more time in the office”, and yet an equally small proportion of business owners make real and substantive plans for their eventual exit from the business.
Well. as we come to the end of another year, perhaps it’s time to start thinking about it, between the turkey and the strains of Auld Lang Syne.
Even if you’re a sole trader, the question still applies. There’s going to come a point at some stage when you can’t, or don’t want, to keep doing it, doing it, doing it.
And whether you have no employees or hundreds, the big questions remain the same:
- What do you want to do next?
- How do you manage the transition from this to that?
- Have you got enough money to achieve those ambitions?
And all an exit strategy is, is putting in place some relatively long-term plans to ensure that the transition, when it comes, is as painless as possible.
If you have a business with employees of course, then you may have a saleable asset, but unless you’ve managed things exceptionally well, your assessment of how much it’s worth is probably massively over-optimistic.
Many – perhaps most – business sales take place either opportunistically (somebody makes you an offer out of the blue), or as a result of the owner/manager coming to the end of his/her tether and just chucking it on the market in a fit of almost desperation, through ill-health, age, infirmity or because they’re just sick of the hassle.
Any such sale will almost certainly under-achieve in terms of value.
As I never tire of telling anyone who will listen, the best way to maximise the value of your business is to organise it so that it runs efficiently and profitably without you in it. A concept that many business owners find very difficult to accept, and even harder to implement.
But it is also the only way to achieve sustainable organic growth (which of course also adds value) without the growing pains that so often accompany it.
And if you’re organising the business to make all that happen, then you can pick and choose pretty much any exit strategy you like with a high degree of confidence.
Sometimes it helps to have an objective outsider with no axe to grind, to help you see the wood for the trees.
And since I’ve been through the opportunistic business sale, I like to think I bring a degree of experience to the table.
But the key thing, as with all things in life and business, is planning. Without that, you’re flying blind.
David Croydon: 01844 238692 or e-mail firstname.lastname@example.org