Most business owners think they are too young and too busy in the business to ask or answer questions about their exit strategy. Why should they start planning their exit strategy now?
You’re not one of them. That means your eyes have been opened to the imperative of thinking about your exit from the outset of your business – or at least from today forward.
You realize that you have no intention of working this hard for another 5, 10 or 20 years. You’ve built a business you are proud of, that rewards you nicely today and you want to be able to walk away on your terms on your timeline.
Simple and Reasonable
Sounds simple and reasonable. But for many logistical, emotional, and financial reasons, it can’t happen overnight. Unfortunately, most business owners neglect the topic, don’t consider the decisions, and leave the process to the last moment. Unlike their decisive leadership that got them to this point, they’ve sidestepped the following questions. You don’t have to.
There are five key questions about your exit strategy you do want to spend time considering. Explore the tradeoffs of different answers. Sometimes the answer to one dictates the answer to others, but if that one answer changes, you open up other latent possibilities you’d never thought of before. When you lay out your answers to these questions, you will be in a better position to take timely steps and integrate all the necessary elements for your ideal exit. You will be in control of effectively negotiating a successful business transaction to achieve your optimum transaction and transition to reinvention.
- How much longer do you want to be actively involved in the business?
Vague answers like ‘at least 5 more years’ are a way to avoid the question. Dig deeper. Is there an age or a date or a milestone at which time you want to bow out? Maybe it’s easier to look at what you want to accomplish in the business before you’re ready to walk away. This date is important because it triggers every other action, trigger and date along the way to get there.Most successful exit transactions take long-term strategic planning. They can’t and don’t come together in 60 days. You must start the process before you ever thought it would be necessary because it takes far more time than you imagined to line up all facets to suit you.To maximize the value of your business when you do exit, you need to have a clear goal for the company and a plan for your own/your family’s future.
- Who will be your likely successor?
Have you thought about who should be your successor? Should it be your children, one of your children? Should it be your employees? Or would you look for a buyer well-suited to the business, who can take it to new heights? Maybe you think it’s in your customers and staff’s best interest to be acquired by an industry giant or your biggest competitor?There are many options. What’s optimal depends on you, your goals, your industry, your company culture.
- What do you need out of a transaction or transition to have the financial independence for your next venture/adventure/retirement?
This is really two questions and to answer the first half, you need to answer the second half first.
What will you do next? Do you have a plan? Do you have a project, venture, hobby in mind? Will you travel for 2 years and then build a house up in the mountains? Will you go back to school as a student or professor? Will you volunteer?
Your plans for your next steps or avocation create the baseline of your financial requirements from any transition or transaction you decide on. Think through your aspirations for the lifestyle you want and the goals on your bucket list you want to fulfill once you exit this business. Clarify what you’ll be doing and what it will take to fund your financial independence. That will set some parameters on your company valuation and the structure of your exit to ensure your future.
Run the numbers so you know how much you need from the deal so you know with relative certainty that you can pursue and achieve your life’s goals. That has to include basic living expenses, health care costs, long term care costs; and any education funding for children or grandchildren, travel costs, replacement vehicles, vacation home, weddings, philanthropy, legacy planning, or tax liabilities.
In his book, Money, Master the Game, Tony Robbins outlines four levels of planning for the future:
- Financial Security – to cover the basics
- Financial Vitality – to cover basics plus 50% of regular ‘extras’
- Financial Independence – to cover 100% of current lifestyle
- Financial Freedom – to cover current lifestyle plus a few luxuries
What would those numbers look like for you?
- Do you know what your business is really worth on the market?
You need two numbers. In the end it’s up to you to make sure they match. You need to know how much cash you need to take away from the sale of your business, regardless of the form the transaction takes. And you need to know with brutal honesty the market value of your business – what it is actually worth, not what you think it’s worth. Market value always trumps what you ‘need’ out of the business. Don’t get trapped into terms you don’t like because you were only looking at a buyer’s offer number. Use independent experts to value the business before you get locked in during a negotiation. They can often show you some strategic changes to make now to increase market value in your favor that will increase your leverage with potential buyers.
- What should you be doing now to minimize your future tax liabilities?
Don’t look at taxation in isolation. Revisit your business plan now and consider the tax implications for every investment, your projected growth and even your own compensation package. Expand your strategic planning to include contingency planning, succession planning, transition planning, and then run some financial models to see which options look most attractive for your future.
Whether you intend to sell your business in the next couple years, or you’ve set a date 5-10 years from now, it’s never too early to start the planning process. Planning now will help you clarify the ultimate goals you are aiming for. Early exit planning allows you to use your exit plan as a framework for every decision you make for the lifetime of your business.
You built your business as the primary vehicle in your portfolio to provide the financial freedom you intended to secure for yourself and your family. Ask and answer these five questions now to ensure your business will deliver on that promise for the future.
It’s a big step to consider hiring an exit strategist. When you decide you want an exit strategist on your team, hire someone who will help reduce risks, maximize the value of your business, and prepare you and your business for sale or succession. Here are ten fundamentals to qualifying your ideal exit strategist.
Qualify Your Ideal Exit Strategist
- Hire someone who has done what you set out to do (e.g., launch a new product line, bring in $10M new revenue, streamline production to eliminate all late and lost jobs) to maximize the value of your business.
- Work with an advisor who has built businesses, has taken leadership, ownership, and accountability to get things done; hired the team and has risked everything themselves.
- Work with an advisor who teaches you more than one way to get things done, so you can customize the learning to you, your team and your company as you prepare for a transition/transaction.
- Work with a mentor who will sit with you to collaborate, rather than a consultant who keeps himself or herself apart. You need someone so engaged in your company and committed to your goals they are always thinking of better solutions for you, a virtual partner at your side.
- Work with an authority, someone who delivers specific ideas and solutions to run your business more effectively not just ‘If you fix this, your valuation will be higher’. Work with an authority who also offers training programs engaging your entire team to increase company valuation.
- Work with an advisor who is a peer, who has been in your shoes, and who teaches you at your level. You want a mentor who understands your size business, your industry, your challenges, who recognizes and values both your short-term and long-term objectives.
- Decide if you need a specialist in marketing/sales/service/HR/finances to solve a specific problem in one area; or if you want a mentor who will help you assess the entire operation to institute and/or refine business fundamentals to add value and leverage before you get to a transaction.
- Decide if you want to give away your core value to an outsider to get a task done; or if you want guidance and direction from a virtual partner who will help you integrate systems and strategies to take your whole company to the next level so you can achieve the financial success you know is possible.
- Decide if you want to hire a trainer to get you started in a specific skill set; or if you want to hire a mentor who will stick with you to achieve very specific results, in this case preparing for an exit on your terms, on your timeline.
- Do you need information that a one-time consultant will produce? Or do you need the ongoing insight, experience and expertise of an exit authority to turn information into knowledge you can integrate into your business, adding value every day?
The advisors you choose to surround you, in preparation and through the transaction process, directly impact the outcome you achieve. Know why each person is on your team, the value they add, and what they deliver. Hire the best you can find, not just the best ‘you can afford’.
Hiring the team you need to cash out on your terms is an investment that offers you a high return while reducing your risk to get there.
Use your exit strategist as a resource working with your advisors, integrating them effectively into your team, as the conductor of your orchestra (advisors) performing your symphony (exit plan).
Your exit strategist is central to ensure the success of you and your team of experts in any sale, scale or succession plan. Use these 10 fundamental qualifications to help you identify your ideal exit strategist.
It’s a tough market for potential sellers. Are you making it tougher? Is your business at risk?
Too Many Businesses Are At Risk
Did you know that for every 100 businesses in the lower middle market:
80% of companies are not ready for a transaction. When they approach an intermediary (broker, IB, M&A)
they get turned away. (80 not ready)
40% of the remaining 20% will fail as well from poor planning/preparation. (8 fail)
>50% of M&A transactions fail because of low valuations (<$5M). (6 fail)
We can double those valuations in the years leading up to a transaction
>80% of mergers and acquisitions never meet their long-term objectives.
(9 never hit long-term objectives)
50% of sellers are already under compulsion to sell when they reach out to an M&A. (3 compelled to sell)
That leaves <3 who prepare, sell successfully, and meet long term goals.
Will you be one of those 3:100?
1.You can proceed alone and assume all the risks,
2.You can reduce risk, maximize value and follow a holistic 4 step process using tools that drive value, to meet all your objectives. Check out Build Your Business Value to get started.
You’ve heard these phrases for a life time:
Be Prepared, Be Proactive, and Begin with the End in Mind.
These are core disciplines for success and prosperity as a business owner too.
For the Boy Scouts of America, the Boy Scout Motto BE PREPARED means a scout is always in a state of readiness in mind and body to do your duty.
The motto of the Girl Scouts of the USA also is BE PREPARED. For Girl Scouts, this means being prepared at any moment to face difficulties and even dangers by knowing what to do and how to do it.
Stephen Covey wrote The 7 Habits of Highly Effective People®, almost 20 years ago. It’s been a top-seller for proven principles of fairness, integrity, honesty, and human dignity. These habits are still essential and apply equally when you are planning to complete the lifecycle of your business. We’ll only look at the first two habits here.
Habit 1: Be Proactive
Being proactive is about taking responsibility for your life. Proactive people focus their time and energy on things they can control. The problems, challenges, and opportunities we face fall into two areas–Circle of Concern and Circle of Influence.
Proactive people focus their efforts on their Circle of Influence. They work on the things they can do something about.
Habit 2: Begin With The End In Mind
Sometimes people find themselves achieving victories that are empty–successes that have come at the expense of things that were far more valuable to them, e.g., playing 1000 hours of a video games instead of attending classes and flunking out of college.
If you don’t have a blueprint to build a house, the framework you build may never qualify for an occupancy permit. If you don’t have long-term as well as short term goals and objectives, you could Begin With The End In Mind is-the ability to envision and plan for what you cannot see at present. excel in the moment and never build a nest egg for the future.
It is based on the principle that all things are created twice. First we create it in our minds. Second, is the actual physical creation/execution.
To Begin With The End In Mind for your life, start by drafting your own Personal Mission Statement focused on what you want to be, do, and have (in that order). It is your plan for success, reaffirming who you are, focused on your long-term goals. Your mission statement makes you the leader of your own life, creating your own destiny and securing the future you envision.
Plan Your Exit From The Outset
When it comes to your business, now and long-term, you must roll up all three of these principles:
- Be Prepared
- Be Proactive
- Begin With The End In Mind
into one and Plan Your Exit From the Outset. If you take business ownership responsibility seriously, then it’s integral to your job to be prepared, to be proactive and to begin with the end in mind.
As an owner, that means, you will:
- Design Your Business Mission Statement
- Communicate it to all stakeholders
- Be prepared for all contingencies (death, divorce, disability, disagreements, and departures) and continuity challenges (severe weather (fire, flood, or blizzard), power outages, dangers (hostage, crash, or a state of emergency). Can your business withstand any of these surprises? How prepared are you, your team, your business, your systems?
- Eliminate excuses and procrastination that murder your business
- Be proactive about building your business as a wealth-producing asset not just an income stream:
- Develop Clean financials
- Grow cashflow balances
- Complete and up to date books, records, minutes, resolutions
- Document systems, procedures, policies
- Execute succession planning and leadership development
- Reduce customer or vendor concentrations
- Drive operational excellence and benchmarking intrinsic value
- Track and measure value drivers
- Become more strategic and redundant to day-to-day operations
- Expand market position
- Explore your endgame in the business and beyond
- Begin with the end in mind
At its core this means having your affairs in order and your plans for a business transition mapped out early to ensure you can cash out on your terms and on your timeline and transition to the reinvention of your dreams (some combination of a new venture, adventure, avocation or simply your favorite hobbies) knowing your legacy and dynasty are secure. This can only be achieved with early and consistent long-term planning, over the 2-5 years before a transaction is in sight.
That’s why early exit planning is the only option if you are committed to all three principles of Be Prepared, Be Proactive, and Begin With the End in Mind. If you’d like to have a conversation about being prepared and being proactive in your business, call us at 508.820.3322 or email us.
August was a rollercoaster ride for stockholders. Triple digit wins followed by even larger losses left the average investor reeling and were a good reminder that markets move in both directions.
Valuations of privately held business have also been somewhat turbulent of late.
Have you missed the opportunity to sell your business at the peak?
Maybe. But should you care? Probably not.
The thing many of us forget is that when you sell your company—possibly your largest asset and the biggest wealth-creating event of your lifetime—you have to do something with the money you make.
These days, that means you’ll have to turn around and invest your windfall into an asset class that is arguably somewhat ‘bubbly’ in historical terms. The stock market has more than doubled since 2009. The price of residential real estate has been growing at a rate of 1 percent per month in many major centers. The same trend can be seen in many markets that offer exclusive beach houses or ski chalets.
Who Is Richer: Samantha or Scott?
Indulge me in a hypothetical example. Let’s look at two imaginary business owners, each running a company generating a pretax profit of $500,000. Let’s imagine that Samantha sold her business into the teeth of the recession for three times her pretax profit back in 2009. She would have walked away with $1.5 million pretax to invest in the stock market.
Now let’s imagine business owner Scott who decides to try and time the market. Scott waited out the recession and sold his business last month for four times pretax profit, walking away with $2 million before deal costs. At first glance, Scott looks like the winner because he sold at the peak and got four times profit instead of Samantha’s three times. But when we take a closer look, Samantha would probably be better off today. Assuming she had invested her $1.5 million in the stock market back in 2009, when the Dow was trading below 7,000 points, she would now have more than $3 million, or a third more than Scott, who waited and sold at the “peak.”
Is there a perfect time to sell your business?
Timing the sale of your business on the basis of external markets is often a zero-sum game, because unless you’re going to hide the proceeds of a sale under your mattress, you’re probably buying into the same market conditions from which you’re selling out.
A better approach is to optimize your business by reducing risk, improving operations, and maximizing value to showcase the elements ideal acquirers look for when they buy a business, regardless of what’s happening in the economy overall.
To find out how your business is at risk, where to shore up your operations and how you could maximize your valuation in a few short years, check out our Build Your Business Value 12 month program here.
Sell your company while things are going really well.
Makes sense. Sounds straightforward enough.
In this context, ‘well’ is a metric of success that will make ideal buyers take notice. What would make your ideal buyer/acquirer take notice? It could be any and all of the following:
- Number of users on your ‘app’
- Viral growth
- New channels you are opening
- Market monopoly opportunity
- Recurring revenue streams
- Happy customers
- Caliber of channel partners
- Growing diverse client base
- Penetration of the marketplace
- Operational excellence
- Strong leadership
- Strong corporate culture
- Achieving revenue, profit margin,
and growth goals
- Measurable value drivers
- Strong forecasts
- Reduced risk
- Maximizing value
- Do you run your business on metrics that can be measured or do you run your business from personal experience?
- Do you hit your goals for the business? Is your business a showplace to be proud of?
- What more could you do so that your ideal buyer starts to take interest in your business?
Timing an External Sales Process
So when is the right time to consider selling the business? When should you launch an external sale process?
First, get clear on your exit criteria. If you don’t know your criteria that would make you say yes to a deal, start there. It’s time for thoughtful consideration of your exit criteria, dreams and goals in terms of:
Second, monetize what you built. To sell well, you should secure:
- the business
- your team
- your family and
- your finances
before starting the transaction process.
Third, determine the best timing before committing to the transaction process.
- What’s the best timing for you personally – 3 years from now, or 3 decades from now?
- What’s the best timing for the business – is it already a turnkey operation, do you have a successor groomed, is the business at or approaching its peak?
- What’s happening in your market – is the market expanding, is it consolidating, are there opportunities your company is in a position to leverage?
Changes and Challenges
Pay attention to personal and family factors, which impact us all. Any number of changes and challenges from retirement, health, or family obligations can compel a sale, even if, those same challenges (e.g., conflicts, litigation, shareholder diversity, disability, etc.) can reduce the value of the business or make the business un-saleable!
You Can’t Sell Well In A Vacuum
In addition to attracting your ideal buyer/acquirer, you also must prepare:
- your company
- your team
- your family and
- your finances
or you won’t be in a position to sell well.
That preparation, planning and forethought takes time, commitment, focus and resources to position your business to sell well. That’s time you can’t be tied to day-to-day operations of the business. It’s imperative that your team can shine hitting your numbers independent of you at the helm. It’s time you need to focus on the strategic imperatives of an ideal transaction and your successful transition.
To Sell Well, Surround Yourself With A Team
It takes a team of experts around you to get all the pieces done and done right. You want all-star specialists around you. Do not accept ‘dabblers’ in any role on that team. Check out the whitepaper: How to Manage a Gaggle of Advisors to Build Your All-Star Exit Team.
The lead-time investment in pre-transaction/pre-transition planning will pay handsome dividends when you sell well to your ideal buyer/acquirer.
Business owners get lots of support, training, and direction on starting and growing their business. They engage a business attorney and an accountant from the outset. Along the way, they may hear a question or suggestion about how they will cash out the business they built.
But the idea that exit planning and the lead-time to maximize the value of their business could take years is unfathomable for most owners in the lower middle market.
It’s unfathomable, because:
- No one told them how long the process takes, the range of advisors they and their buyer will call in to assess the sale-ability of their ‘baby’, or its value.
- No one prepared them for the gauntlet of demands in the transaction process
- They never knew they’d have to reveal so much about the inner workings of their business – their secret sauce, as well as their personal takings from the business.
- The [costly] expenses they have avoided along the way are now mandatory to demonstrate the business is a turn-key operation that can run successfully under new ownership
- They did not need all these different experts while running the business, why should they need any more help to sell the business, after all it’s it as simple and straight-forward as selling a house isn’t it?
- They’ve been operating the business successfully for decades, generating a healthy income and lifestyle, so why would anything need to change for someone else to buy them out?
The shock of what that valuation could look like if they fast-track a transaction process, vs. the potentially greater valuation if they extend planning time, (to better prepare the business from a few weeks to even a few years), can put a big wrinkle in their retirement plans.
Just a few of the incentives of extended exit planning:
- Better prepared companies command higher valuations and higher multiples
- Extended Lead-time can showcase increased growth, reduced risk, improved quality of operations, stronger forecasts, etc.
- A Planning Phase of 3-5 years gives an owner time to prepare:
- The business
- Financials [personal and business]
- Owner’s future plans
- Reduce advisor and transaction costs
- Leverage the business to the strongest terms in the seller’s interest
- Ensure the owner gets a successful transaction the first time
- Clarify, address and focus the owner on their reinvention
Without an exit plan as a framework for every decision you make, owners end up working harder, not smarter for the lifetime of their business. Starting years before an intended exit date to prepare and plan for your ideal transaction and transition will position you, the owner to:
- Increase business value to increase transaction value
- Reduce risk
- Command higher multiples
- Grow revenues and profit margins
- Make the business buyer ready and buyer attractive
- Minimize the tax burden you will incur
- Plan and test your reinvention
- Ensure you don’t sabotage the deal once it’s made
- Surround yourself with an all-star team of advisors
Transaction Value increases with the length of time invested in early exit planning.
Most business owners assume that selling their business is a sprint to the finish-line, but the reality is it is more like a marathon. Whether you are prepared for it or believe it or not; it takes a long time to sell a business – if you want to command full value.
The sound of the starter gun sends adrenaline flowing as you leap forward out of the blocks. Within five seconds you’re at top speed and within a dozen your eye is searching for the next hand. Then you feel the baton become weightless in your grasp and your brain tells you the pain is over. You start an easy jog and you smile, knowing that you did your best and that now the heavy lifting is on someone else’s shoulders.
That’s probably how most people think of starting and selling a business: as something akin to a 4 x 4 100 meter relay race. You start from scratch, build something valuable, measuring time in months instead of years, and sprint into the waiting arms of Google (or Apple or Facebook) as they obligingly acquire your business for millions. When they hand over the check and you’ll ride off into the sunset. After all, that’s how it worked for the guys who started Nest and WhatsApp and many others – right?
Unfortunately, the process of selling your business looks more like a grueling 100-mile ultra-marathon than a 100-meter sprint. It takes years, a lot of planning and a lot of preparation to ensure you can make a clean break from your company – which means it pays to start planning sooner rather than later. Here’s how to backdate your successful transaction and transition to a reinvention to get started.
Step 1: Pick your sell-by date
The first step is to figure out when you want to be completely out of your business. This is the day you walk out of the building and never come back. Maybe you have a dream to sail around the world with your kids while they’re young. Perhaps you want to start an orphanage in Bolivia or a vineyard in Tuscany.
Whatever your goal, the first step is writing down when you want out, identifying why that date is important to you, as well as what you will do after you sell, with whom, and why.
Step 2: Estimate the length of your earn out
When you sell your business, chances are good that you will get paid in two or more stages. You’ll get the first check when the deal closes and the second at some point in the future — if you hit certain goals set by the buyer. The length of your so-called earn out will depend on the kind of business you’re in.
Earn outs these days average two – three years. If you’re in a professional services business, your earn out could be as long as five years. If you’re in a manufacturing or technology business, you might get away with a one-year transition period.
Estimate: + 1-5 years
Step 3: Calculate the length of the sale process
The next step is to figure out how long it will take you to negotiate the sale of your company. This process involves hiring an intermediary (a mergers and acquisitions professional, investment banker or business broker), putting together a marketing package for your business, shopping it to potential acquirers, hosting management meetings, negotiating letters of intent, and then going through a 60 to 90-day due diligence period. From the day you hire an intermediary to the day the wire transfer hits your account, the entire process usually takes six to 12 months. To be safe, budget one year.
Estimate: + 1 year
Step 4: Create your strategy-stable operating window
Next you need to budget some time to operate your business without making any major strategic changes. An acquirer is going to want to see how your business has been performing under its current strategy so they can accurately predict how it will perform under their ownership. Ideally, you are in a position to give them three years of operating results during which you didn’t make any major changes to your business model, financial structure or ownership.
If you have been running your business over the last three years without making any strategic shifts, you won’t need to budget any time here. On the other hand, if you plan on making some major strategic changes to prepare your business for sale, add three years from the time you make the changes. These could include such things as: a new accounting software package; a clean financials; or changes in cashflow, risk tolerance, operational quality, pricing, cost structure, market channels, etc.
Estimate: + 3 years (after changes implemented)
Figuring out when to sell
The final step is to figure out when you need to start the process. Let’s say:
- You want to be in Tuscany by age 50, your sell-by date.
- You budget for a three-year earn out, which means you need to close the deal by age 47.
- Subtract one year from that date to account for the length of time it takes to negotiate a deal, so now you need to hire your intermediary and commit to the sale process by age 46.
- If you’re still tweaking your business model – e.g., experimenting with different target markets, channels and models; you will need to lock in on one strategy by age 43 so that an acquirer can see three years of operating results.
It certainly would be nice to make a clean, crisp break from your business after an all-out sprint, but for the vast majority of businesses, the process of selling a company is a squishy, multi-year trek to reduce risk and maximize value. The sooner you start, the better.
So if you wanted to command full value and be out by age 50, and you’re 45 or 47 now, you may have to delay that sell-by date or tie down operations right now, and get started planning earlier rather than later.
How do you know when it’s time for a transition? Is it a transition or a transaction or both? Is it your conscious decision, or are things so out of control in your business, you are at a distinct disadvantage? How do you know?
In your business, deciding it’s time for a transition can be colored by a myriad of issues, events, or individuals. A transition can take years to explore, refine and execute.
Strategically planning each step will keep you in control. In contrast, having no plan will take away all your control and leave key decisions up to others.
Take a moment to read the following statements. Do you AGREE or DISAGREE with each statement?
- The business is running well, but I’m bored.
- There’s more to life than running this business, I want to do something different.
- That burning desire to compete isn’t there anymore. I may be “burnt out.”
- I thought all along that my children would take over the business. Now they’ve found other ventures they want to pursue. I don’t know what’s next.
- I’ve been approached by a competitor, I want to know what he’ll pay for my business but I don’t want to ‘give away the store’.
- The market for companies like mine is hot. It may be a good time to sell, but I’m not ready.
- I/my spouse had a health scare. I hope it’s not too late to ‘smell the roses’.
- I’ve been working in my business so long I really don’t know what it would be worth to anyone else.
- I’m tired and drag myself to work most days.
- I don’t know if I can afford my lifestyle if I let go of the business now.
- I can’t sleep at night because I feel like I’m being held hostage to my business.
- My company is starting to lose market share, revenue and/or profits. It’s a trend I don’t know how to fix.
- Most of my wealth is illiquid tied up in the business. I want to diversify by taking some chips off the table.
- We never drafted any contingency agreements. Now family and partnership relationship issues are emotionally draining me and putting the business at risk.
- When I leave my business, I want it to be on my terms and from a position of strength.
How many of these statements describe you right now?
If you AGREE with 0-2
Your company is not facing an imminent transition.
If you AGREE with 3
You would benefit from a frank conversation with a specialist about your transition timeline
If you AGREE with 7-10
Call for a free consultation now, before one more issue arises to derail the business or your transition opportunities
If you AGREE with 10-15
You needed to start transition planning years ago. We can get you back on track and in control. Call today.
David Kong in his Fortune.com commentary: Best Western CEO: Why you should never get promoted too quickly, stated:
“When we’re young, especially in our 20s, no one is thinking about retirement. But everyone’s career comes to an end, at some point. So it’s never too early to start focusing on your legacy. We should think about how we want to be remembered not just in our company, or our industry, but in our family and amongst our friends.”
It can take a lifetime to build a legacy or it can be galvanized overnight. The challenge is to consciously choose what you want to be remembered for. If we abdicate this opportunity, others will decide what our legacy will be or if it (meaning us) is even remembered.
If you value how you will be remembered, what do you want it to be?
There are two sides to legacy
On the qualitative side, your legacy preserves what you stand for personally and in your business:
The challenge is that most business owners are so busy operating their business that these larger parameters which have long term impact get sidelined or neglected.
On the fiscal quantitative side, your legacy will depend on a number of extremely personal decisions:
• How much money do you need for personal financial freedom?
• What lifestyle are you planning for beyond the business?
• How much money do you want to be able to pass on to family to secure their future for generations?
• What philanthropic commitments do you aspire to make in your lifetime or as bequests?
Your answers to these questions depend on many factors. In some ways the financial decisions are easier than the qualitative ones!
Starting now, take time to reflect:
• Are you having a positive and lasting impact on your team or customers?
• Do your actions inspire the people around you?
• Have you made a transformational impact on the company you built? On your industry? Or the people you care the most about?
• How do you want them to value that experience?
In building your legacy and providing security for your dynasty, it’s imperative that your plans ensure you do not outlive your money. You do not want your legacy clouded or tarnished by inadequate planning for your own lifetime.
Your business and personal legacy plans take time to define, test and execute. It does not come together overnight, or in the midst of the intense transaction process. Rather, it takes contemplation and preparation over the years leading up to that transaction and transition.
The planning for your reinvention, legacy and dynasty should be established before you let go/cash out of your business. To focus on your legacy, integrate your reinvention planning with your exit planning to achieve your ideal qualitative and quantitative outcome.
Your legacy is about your journeys, your values and the truly lasting and positive impact you make. What will yours be?