Foundations for Growth and Value / by Kerri
The foundation for growth and value for your business starts with planning.
“The average business owner spends 80 hours
preparing a business plan and
only 6 hours preparing for their exit”
ROCG 2007 Survey of Business Owners
Read that statistic again:
“The average business owner spends 80 hours preparing a business plan and only 6 hours preparing for their exit”!
That lack of preparation and planning is the reason why owners are ill-prepared to achieve an ideal exit from their business. Instead, they settle for only 50-70% of the value of their business when they sell.
It’s up to you to maximize the value you can receive at exit. It’s up to you, the owner, to demonstrate future value for the buyer, including growth projections to justify the selling price you want to receive on your terms.
You can delay and minimize your efforts and go for a sale that leaves 30-50% of the value of your business on the table or you can plan and strategize over time to prepare you, the business, and your team for the best possible outcome.
Exit planning starts with two exercises, one for you as the CEO, and a parallel exercise for the business. In this exercise you will list your personal core values, your vision and your mission.
Repeat the exercise, with or without your management team, and list your company’s core values, vision and mission.
With values, vision and mission in mind, you can start planning for your exit and what that will mean for the business as well.
By planning ahead, you can be more strategic with each hire, each goal, each decision you make between now and your target exit.
When you have a clear plan for your exit, you will make better decisions, easier, faster, with less risk, fewer mistakes and hit fewer deadends in every area of your business.
With an exit plan integrated into you business plan, corporate goals and strategy will be tied to your end goal, your personal end game.
The first step in exiting on your terms and your timeline is planning. Here are a few areas where you can start planning at absolutely no cost. Planning covers a wide range of issues, decisions and changes. Planning doesn’t have to be expensive. But it takes concentrated time, effort, commitment and follow-through to see results.
Here’s where you can get started now.