How Do You Know You Need To Plan For A Transaction And Your Transition To Reinvention? / by Kerri
Too often, business owners don’t recognize the signals and symptoms that they need to start now to plan for their ideal exit transaction and their transition to the reinvention of their dreams. No one ever told you what those symptoms are.
As an owner you surround yourself with exceptional experienced advisors who help you increase sales, build out your team, manage your finances, upgrade your infrastructure, stay compliant with a myriad of licenses and regulations, etc. But who monitors your business readiness to sell, scale or pass the business on to your successors when it is opportune, instead of too late?
Symptoms to Look For
Here’s my list of symptoms to look for. If you recognize that any of them describe you now, then indeed you need to start planning for both that transaction and your transition plan to reinvention. That’s because it takes 3-5 years to prepare you, your business, your family and your finances (personal and business) to leverage that ‘once in a lifetime’ transaction to achieve the reinvention you’ve been dreaming of.
- Age. You are 55+ and you keep postponing any exit or transition planning (“I don’t need to start thinking about it for at least another 5 years”).
- Successor. You keep on keeping on because you have not identified your successor or groomed the assumed successor.
- Retirement. You find yourself pondering about what comes next; retirement, reinvention, golden years. This question in itself can stifle business and cause insomnia.
- Change. You resist changing your business model to compete effectively, grow and strengthen your market positioning. Maybe things have grown stale, and you’ve run out of ideas to keep your business moving forward. Or maybe you would need to pour tons of money into updating your business and you are resisting the investment.
- Motivation. What drives you now? Do you have a hard time getting up in the morning and going to work, or making the calls necessary to keep your business running?
- Focus. Your focus is drifting away from the business. Life changes, demands and opportunities may be causing you to lose focus or shift priorities.
- Family. Your family keeps asking you when you will slow down and you keep saying never.
- Dynasty. You worry that your wealth may not be enough to fund your reinvention lifestyle for decades to come and provide for the generations to follow you.
- Children. You now know your kids don’t want, or are incapable of running, your business.
- Legacy. You are thinking about how to answer the question of what is your legacy and what do you want it to be, and therefore; how that will impact any transaction where you let go of day to day operations.
- Expansion. You are spending more time thinking about maintaining rather than expanding your business. You settle for good enough or watch competitors take the lead.
- Health. You or a family member may be facing specific health concerns that limit your participation in the business, distracting you, which can risk your revenue stream.
- Energy. Your stamina to run the business as you once did is declining.
- Profit. Your financial focus has shifted from maximizing profits to what you can get when you cash out.
- Planning. Your strategic planning efforts stagnate.
- Customers. Your customers are all tied closely to you personally, not the business.
- R&D. You have been reinvesting in the company less and less as you start to pull more cash out of the business.
- Dependence. Your business depends on your day-to day decision making. It’s not the turnkey operations buyers will pay a premium for.
- Exit. You are starting to ask what it will take to make your business buyer ready, buyer attractive and more sale-able.
- Offer – You get one or more calls with offers you’d be foolish to refuse.
- Next Venture – You are more interested in your next opportunity, or to do something else you’ve always wanted to do, pulling you forward.
Start that planning now to ensure you will:
- Maximize the value of your business
- Maintain control
- Increase the leverage you can command at the negotiating table
The longer you wait, you will continue to lose all three.
If you need help to assess your symptoms or make a timely plan to complete the transaction that will achieve your dreams, call 508.820.3322 or email us.