Time to say goodbye?
Business Succession / Exit Strategy
A first question I ask any new client is, “When do you want to get out of the business?” Their look is typically the same, one of shock (sometimes horror). “I’ve just started this business, and you want to know when I want to leave?” they exclaim!
The fact is starting with the end in mind is definitely one of the seven habits of highly effective people.
Too often I encounter business owners who are in a routine. Get up, work, go home, sleep (sometimes), get up, go to work, go home, sleep, get up… Sure there are goals and milestones they are trying to achieve but what of the ultimate goal. To actually exit or be extracted from the business.
Please note that purposely said “exit” and “extract” as opposed to retire. To some it’s the same thing, but it begs the question how can a business best serve its owners? A very good (regrettably now deceased) colleague of mine used to state that retirement should be a function of wealth not age. I concur.
There are a very large number of baby boomers about to head into “retirement” and what is to happen to their businesses? The old school thinking was (and too many still is) - sell it. Trouble there is that the new Generation Y often don’t want to buy them, they think (and many can) scratch build one for a fraction of the cost.
There are so many options on exiting a business when the time is right, they include selling, simply shutting the doors, handing on to a family member, selling out to management, retaining an ownership stake and merely extracting oneself from day to day activity… the list goes on.
The secret in the last sentence was exiting when the time is right. The time needs to be right for you, the owner. This date is typically a moveable feast but by working to a plan you can rest assured that the businesses is always groomed for exit/extract, by strategy and by design. Many has been the time a client has had someone walk in off the street and ask if their business is for sale – and a top dollar settlement has been secured. Yet others have been privy to unplanned mergers and acquisitions, but by living an ethos that the business is just a vehicle to create wealth to fund your lifestyle then magnificent opportunities can arise – by plan and by mere preparedness.
The key to being able to exit your business is having the right people doing the right job at the right time with the right tools for the right price. Sometimes a HUGE ask, but not an impossible one. By having adequate systems you can make yourself totally replaceable in your own business and that’s exactly what you need to do to effect a successful exit and extract.
Article written by Martz for Canterbury Today