Posts tagged with: goals
It takes a big commitment to start and grow a business.
You need to be clear on your mission and vision, business model, market research, marketing and sales strategy, and operations to implement your business plan.
You take risks and set goals.
You can be consumed by the day-to-day responsibilities and urgent demands.
All of this eats up time.
There’s another critical piece that gets put off but is as essential to achieving your long-term goals. That is your exit strategy. If you include your exit strategy as part of your initial goal setting, then all of your goal achievements will line up and lead toward your ideal exit strategy and you will have a much greater likelihood of monetizing the business you built. Here are a few guidelines to start:
- Choose the right exit strategy for your goals
You have monthly and annual goals for your business. Commit to these intermediate goals only if they are aligned with your long-term goals and the ultimate goal achievement of your ideal exit strategy. Otherwise, they take you down rat holes or dead end tangents.
- Set business growth goals aligned with your exit strategy
Your growth goals are essential to the health, strength and survival of your business. Look at your growth goals in the context of the exit strategy you want to implement. Be sure your growth goals are taking you in the same direction. Growth that is in conflict with your exit plan or competes with your long-term goals will hurt the business and limit your ability to achieve your exit strategy.
- Identify goals to increase value
The value of the business is not just in terms of assets or cash flow. It’s also in your intellectual property. A lot of your intellectual property is stuck in your head. Your intellectual property could also be in your team, your processes, and in the relationships you cultivate and maintain with clients and vendors, etc. So your objective to increase value before your exit could be to capture the intangible value in these less quantifiable areas. This will translate into a much higher valuation of the firm.
- Plan your exit strategy by intention rather than by default
This sounds like a lot of work. In fact, it is. Nevertheless, if you don’t do the work to plan your exit – your dream of achieving an ideal lifestyle, living your legacy and leaving a dynasty – then you are abdicating both the responsibility and the reward. If you don’t plan your exit by design, then you will settle for what you get by default.
- Systematize your exit strategy to maximize value
The more you can systematize your business so someone else can run it equally well without you, the more a buyer will be willing to pay you to keep it going.
The better you are at systematizing everything, the easier it is for a broker to pitch and leverage that value for a higher price. This step takes discipline and consistency that starts long before you intend to exit.
That’s how you ensure your own successful exit strategy.
If you really own the CEO role and responsibilities, you always have an eye out for the bigger picture of what you want your business to become with a purpose much bigger than yourself. Successful entrepreneurs know their strengths and build on those strengths to successfully achieve their vision. The most successful CEOs are very disciplined strategists who stay focused on their own goals, their own “blue sky strategy” and are not easily distracted by “new shiny object syndrome.”
If this were the only secret to being a CEO who launches a business that explodes in the marketplace, then indeed we would see the 95% failure rate dip a bit. But that’s not the only secret you need to know to make a dent in that statistic.
The problem for the majority of CEOs is that they never grasp the elements that are central to their long-term success. They unintentionally and unconsciously set themselves up to never achieve their goals and never realize the wealth and freedom their businesses could provide.
Ninety-five percent of all entrepreneurs are locked into running a business that perpetuates the three fatal flaws compounded by the three biggest oversights.
By bringing each flaw and oversight out into the open and identifying each one, entrepreneurs wearing their CEO hats can take the first steps to reverse course. Instead of murdering their business, they can lay a foundation for success, prosperity, achieving goals and transitioning out of the business on their own terms.
It’s devastating. Ninety-five percent of all businesses never achieve their goals for the business and beyond, not to mention the long-term financial expectations for their families. This 95% statistic is widely accepted as an unchangeable fact and “the risk of doing business.”
I can’t understand why it is still the accepted norm. Just like you confront and address every other risk you face in business, why not illuminate this gap, address it and fix it. I want to help you minimize the risk and overcome this statistical barrier to your success, to fulfill your dreams.
The core causes of this problem have been around since you launched your business. The solutions aren’t easy but they are so inexpensive that you can afford to implement every one and still stay within your budget. The key is, that we must reveals the flaws of businesses today and owners’ biggest self-imposed barriers.
The solution I present is a system that builds a strong foundation for your business, whether:
- You are just starting out, or you’ve been in business a while
- You have a team or no team
- You have revenues less than $100K or more than $10M
- You are on a fast-track to be acquired or want to cash out to pursue your reinvention
When you systematize your entire enterprise for long-term results, it will transform your business and your life. You will gain time, control, freedom and flexibility all while the business prospers, grows and breaks through to achieve new heights of success you didn’t dare dream of – until now. Everything you do to accelerate growth and maximize value makes the business more buyer ready and buyer attractive.
If you are in business delivering product, content or services, then you have a few options to grow your business exponentially. Simplistically, your choices are to:
- increase the number of clients
- increase the volume you sell/client
- increase prices
- decrease costs
- or a combination of these four
When you take action to build a sale-able business, you join the 5% who successfully complete the transaction and transition to their reinvention.
“One of the first success lessons I learned as a teenager is that the majority is usually WRONG! In his “Lead the Field” Program, Earl Nightingale said ‘if you want be successful and don’t have a good model to follow, then take a look at what everyone else is doing and do the opposite’…because the majority is usually WRONG!” ~ Dan Kennedy
That’s the way I feel about goal-setting experts too. Their solution starts and ends with the goals themselves. They inspire and motivate. They offer insights on passion, vision, purpose and desire.
But that’s where they leave you – hanging. They don’t take you to the promised land of goal achievement for growth, prosperity and your ideal exit.
They may acknowledge and encourage the notion that implementation is the key. However, you are left to your own devices (strengths and weaknesses) to:
- figure out how on your own
- find the time to implement
- actually take action to see results
- inspire and lead your team to believe in the goal
- stay focused, accountable and on track
- pursue and achieve the goal of your transition to reinvention
That’s a tall order for any CEO business owner whose focus is on producing and selling a product or service.
I want you to have a sustainable, scalable, saleable business that produces more profits and more free time to achieve your dreams by working yourself out of day-to-day responsibilities. I want you to stop murdering your business like more than 95% of all CEOs and business owners.
We can help. If you know anyone who has questions relating to exiting their business, please forward my contact information to them. I’d be happy to assist in whatever way I can.
You can exit your business on your terms so you can transition to the lifestyle of your dreams with the wealth to pursue your reinvention (venture, adventure, avocation, hobby, retirement)
But what you can’t do is assume you can simply hire a team of experts and just walk away from your business in the next six months.
Start with your exit criteria to achieve your ultimate goals as you transition to your reinvention.
• Freedom — What does freedom look like to you when you exit your business, after the exit transaction is complete?
• Control — Who’s in control of decisions, strategy, budget, operations, and sales now? Who will be in control of each area of the business when you exit? Have you transitioned the decisions and control to one person, to a team of leaders or to no one leaving a vacuum in the business?
• Wealth — What is your wealth requirement for your reinvention and lifestyle after you exit? How do you define wealth? How much of the wealth you need for your reinvention must come from the business? Can you liquidate the business to produce that level of wealth to achieve your other exit criteria?
• Liquidity — How much liquidity do you need immediately when you exit? How long can you wait to receive final payment?
• Timeline — What is your ideal timeline for your exit? For your reinvention? For liquidity?
• Legacy — What’s your definition of the legacy you want to leave behind? What do you and your business stand for? What do you want to be remembered for? How can you achieve that?
• Dynasty — Do you want to build a family dynasty? What would that look like? What do you have to put in place to realize your dynasty?
When and how long to spend on strategic planning depends on the company itself. At a minimum, any company serious about achieving goals, must allocate time for long-term planning, goal setting and review on a consistent annual basis. This project must be sacrosanct.
Especially, if you are already within the 5 year window of your target exit date, there can be no exception, no excuses for not doing strategic planning.
Your annual strategic planning should tie every goal, every system, every budget and hiring decision to your exit criteria and timeline. Following this strategic plan will help you position your company as one that ideal buyers will be eager to scoop up – maybe even before your target date.
But strategic planning is not just an annual event. You must then roll it back into goals, planning and tracking each quarter, each month and each week. At this granular level, your strategic plan will drive every decision, every expense and every task each employee works on thus increasing productivity and value daily.
To ensure your planning is done in a very comprehensive and detailed fashion consider the following guidelines. Implement your strategic planning process at each of these milestones
- In the third quarter for the following fiscal year.
- In preparation for a new major venture, for example, a new department, new product, new market channel.
- Action plans are updated to be sure objectives, responsibilities, time lines and budgets are on course.
The attorneys report that historically,
only 10% of all the deals business owners want to implement, actually get to the closing table and get done.
The list of reasons why they fail is lengthy. It comes down to the owner’s preparation and stamina in mindset and skill set to get the job done.
An implementation is the realization of an application, or execution of a plan, idea, or policy. To implement a plan (e.g., a strategic plan, an exit plan, or a succession plan) is to carry it out, to accomplish all the details of the plan. When you commit to implement a plan or strategy, it’s a commitment to ensure the fulfillment of that plan by specified concrete measures.
A strategic plan and an implementation plan are not the same thing. The strategic plan tells you what to do, why, when and the budget to do it. The implementation plan spells out the details of how, the resources, timeline, requirements, etc. They are two sides of your exit planning to think through.
The key to your successful exit is implementation. Full implementation of your desired exit option, to transition to your reinvention, requires following through on a detailed, well-constructed plan. Your exit plan has many moving parts. You must constantly orchestrate all of them. Internally, you must coordinate your team, successors, experts, vendors, clients, budgets, prices. You must align the company goals, market value and corporate objectives with your personal exit criteria and priorities. Executing your exit plan cannot be delegated or outsourced. You must take charge of every step of this implementation to ensure you get to the closing table on your terms, on your timeline.
The challenge to your successful exit is also implementation. It’s a big load. Often, most of the pieces need to stay confidential and independent of day-to-day operations. Balancing your exit with daily operational priorities can be distracting and exhausting. I believe that implementation is where most business owners buckle under and can’t get the deal done because, from their point of view, there are:
- Too many balls to keep in the air
- So many new once-in-a-lifetime decisions to make
- All the changes to make in the business, in their leadership and in their business model
- So many different experts to bring up to speed – all charging full rates
- All the contacts and negotiations that take longer than anticipated
Moreover, there’s the loneliness and isolation of working through this process which takes years, especially when you try to do it alone. Our clients at This Way Out™ Group LLC appreciate the support of a virtual partner at their side through the whole process.
“The Strongest Businesses Around The World
Reach For Big Goals And Achieve Them“
Would You Like That For Your Business?
Would You Like To Achieve Every Goal You Set?
You know that goal setting and goal achievement are two different things. Everyone can get to the starting line and set goals for their business if they choose to.
But the latest statistics prove that 95% of all businesses NEVER achieve their goals, business owners never get to exit and are leaving 30-50% of the value of their business on the table. You see only 5% of all business owners ever follow-through to get to the finish line of an exit transaction so they can transition to their reinvention.
I’m not alone in broadcasting these shocking results. According to Jay Abraham there are three reasons for that very low success rate:
- Entrepreneurs don’t start by having any goals, never mind an exit plan. They only have hopes and dreams.
- They never take action.
- They don’t have a step by step plan to achieve their goals, get out, and move on.
95% of all businesses are stuck at a point where the owner takes home enough to pay the bills – $35-40K. They are so busy in the business just meeting their expenses and covering payroll; that they never take time to look at what it would take to make their business into a multi-million dollar enterprise.
For some businesses, it could be as simple as finding ways to increase volume or to increase prices. But for other businesses, it may mean exploring how to leverage strengths, exploring how to expand into new markets or even pursuing new revenue streams or new business models.
Reports at the Exit Planning Exchange Summit 2010 substantiated this lack o f planning saying:
75% of the businesses who seek out exit industry experts (attorneys, brokers, M&A, investment bankers, wealth advisors):
- have no plan and
- don’t know what to do with the business when they do want to exit.
Settling for where you are because you don’t know how to take the next step, or you don’t have time to research your options, or you don’t have the cash flow to hire the team to achieve your dreams and goals – these are all excuses we feed ourselves.
Ask for help. Make a plan. Take one step closer to your exit goals.
Once you know what you need to aim for, you can set better goals to get to your freedom number. (See yesterday’s post) There are two parts to any goal setting.
1. The biggest secret to goal achievement is to be sure you pursue the right goals. Therefore, start by assessing your criteria for each exit goal to validate that you are working towards the right goals.
2. Then think through your goal setting criteria to ensure success.
Before you take any action, before you even set your great goals for your exit from the business and beyond; there are four criteria you must establish to put each goal on a sound footing.
1. Be Invaluable
To be invaluable to your business and to your clients, you must always deliver your best. You must always be working on those tasks that make you most valuable to the organization and your clients. So before you launch into an ambitious project or campaign, get clear on what makes you invaluable, what’s important and maximizes your worth.
When you apply this criteria to your exit goals, it means that no one else can ensure your exit on your terms. You can’t delegate your strategic role in selling the business to anyone inside the company or to your advisors. You are central to the success of that transaction and to ensuring your ideal life beyond the business.
2. Your Purpose Must Be Bigger
Your purpose for your chosen exit option must be greater than just the ‘cash-out’ number it brings in. Your purpose could be as transparent as to ensure your family’s future, to pay for college, to pay off the mortgage, or walk away with the financial freedom for a secure retirement. Your purpose could be to fund a non-profit, or build a school around what you love. Your purpose could be to eliminate cancer or wipe out malaria from your research. Your purpose must be more important to you than the money. It should be so big, it pulls you forward, with no regrets about the business you are leaving.
3. Your WHY
Why is it important to you to work so hard this year, now, towards your exit? Because you are supposed to? Because you need to? Because people count on you? When your WHY is really really BIG, it WILL pull you forward; it will compel you. You can’t help but work harder and get more done; you will be more strategic in your decision-making to maximize the value of the business, making the business more buyer ready. Even if you think your WHY is the money – say you really want to walk away with $5M cash – go deeper. Dig for the emotion that drives you. Dig for the need that will fulfill. Without that deeper personal WHY you want this exit, it’s easy to waiver and get distracted by day-to-day operational issues.
4. Be Passionate
The more passionate you are about what you will do and how you will help more people:
a. it will be easier to let go of the business with something more exciting/ enriching/ rewarding to move on to;
b. your timeline will be clear and laid out; c. buyers will know you are committed to this close, that the deal will go through.
In your exit, it’s not all about the financial transaction. To let go and move on, you must also be passionate about your reinvention, what you are moving toward, looking forward to doing/having/experiencing. Be clear on what makes you so passionate about your reinvention before you get to the exit transaction.
Only after you know these four goal setting criteria, only then can you proceed to your exit plan and take responsibility for what you will do and where you are going. At this point, you can effortlessly lay out a roadmap to achieve the exit goals that pull you to achieve that long-term wealth.
Goal achievers begin with the end in mind and an absolute conviction and commitment to achieve their big bold audacious goals. If you have an exit strategy for your business, you are already setting your business up for success, achieving outrageous goals and on track to realize your exit strategy. If you don’t have an exit strategy, you are not alone. Most businesses (of all sizes) never plan their exit strategy.
That’s not to say this is a good thing; just that the majority of businesses skip this step and then wonder why they can’t exit when they want and the way they want.
When Is The Right Time To Plan Your Exit Strategy?
There is no wrong time to plan your exit, unless you never do it.
The right time is the moment you realize that you don’t have one. That could be while you are starting your business; it could be when you launch and go live; it could be part of your annual planning retreat or your long-term planning strategy. The wrong time to plan your exit is the last 12 months before you want to move on.
There’s a lot on your plate when you start a business. Of course, you need to be clear on your mission and vision, your business model, your market research, marketing and sales strategy and your operations to implement your business plan. You can be consumed by the day to day responsibilities and urgent demand. All of this eats up time.
There’s another critical piece that’s easy to put off but very critical to achieving your long term goals and that is your exit strategy.
If you set your exit strategy as part of your initial goal setting then all your goal achievements will lead towards your ideal exit strategy.
Here are 5 recommendations to ensure you set goals that get you to a successful exit:
1. Choose the right exit strategy for your goals
You have monthly and annual goals for your business. You want to commit to these intermediate goals only if they are aligned with your long term goals and the ultimate goal achievement of your ideal exit strategy.
2. Set business growth goals aligned with your exit strategy
Your growth goals are essential to the healthy, strength and survival of your business. When you look at your growth goals in the context of the exit strategy you want to implement, be sure your growth goals are taking you in the same direction. Growth that is in conflict with your exit plan or competes with your long term goals will hurt the business and limit your ability to achieve your exit strategy.
3. Identify goals to increase value
The value of the business is not just in terms of assets or cash flow. It’s also in your intellectual property. Your intellectual property could be in your team, your processes, the relationships you cultivate and maintain with clients and vendors, etc. So your goals to increase value before your exit could be in these less quantifiable areas that translate into a much higher valuation for the firm.
4. Plan your exit strategy by intention rather than by default
This sounds like a lot of work. In fact, it is. But, if you don’t do the work to plan your exit – then your dream of achieving an ideal lifestyle, living your legacy and leaving a dynasty – then you are abdicating both the responsibility and the reward. If you don’t plan your exit by design, then you will settle for what you get by default.
5. Systematize your exit strategy to maximize value
The more you can systematize your business so someone else can run it equally well without out you, the more a buyer will be willing to pay you to keep it going. The better you are at systematizing everything, the easier it is for a broker to pitch and leverage that value for a higher price. This step takes discipline and consistency starting long before you intend to exit.
Apply these five recommendations to get the results you want. That’s how you achieve every goal you set. That’s how you ensure your own successful exit strategy