Posts tagged with: transition

Is it Transition Time

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?

  1. The business is running well, but I’m bored.
  2. There’s more to life than running this business, I want to do something different.
  3. That burning desire to compete isn’t there anymore. I may be “burnt out.”
  4. 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.
  5. 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’.
  6. The market for companies like mine is hot. It may be a good time to sell, but I’m not ready.
  7. I/my spouse had a health scare. I hope it’s not too late to ‘smell the roses’.
  8. I’ve been working in my business so long I really don’t know what it would be worth to anyone else.
  9. I’m tired and drag myself to work most days.
  10. I don’t know if I can afford my lifestyle if I let go of the business now.
  11. I can’t sleep at night because I feel like I’m being held hostage to my business.
  12. My company is starting to lose market share, revenue and/or profits. It’s a trend I don’t know how to fix.
  13. Most of my wealth is illiquid tied up in the business. I want to diversify by taking some chips off the table.
  14. We never drafted any contingency agreements. Now family and partnership relationship issues are emotionally draining me and putting the business at risk.
  15. 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.


How Do You Know You Need To Plan For A Transaction And Your Transition To Reinvention?

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.

Succession market is booming, baby

Todd Nelson’s article, Small Business: Succession market is booming, baby, in the Minnesota Star Tribune on March 30, 2014, about Richard Burrock, lead partner for business succession services at Boulsy is more anecdotal proof of the demand for succession planning from baby boomers.

In his article, Nelson quoted Burrock: “The need for an exit strategy is gaining urgency as the baby boomers who own 40 percent of Minnesota’s private companies approach retirement.”

He quoted statistics Burrock shared: “More than half of the privately owned companies in the country face an ownership change in the next 10 years, yet an estimated 75 percent have no transition plan in place, Burrock said. Those who don’t are unprepared for life after retirement, with successor owners unidentified, tax strategies unaddressed and business responsibilities that largely have defined them soon out of their hands.”

These are all issues that take time to address and execute, which you can’t do if you wait until it’s too late.

These are the same distressing statistics we’ve been sharing for years to educate and encourage baby boomer business owners to take action.

Nelson quoted Burrock as saying: “To do nothing is a disaster in the making. It really takes away their flexibility. What I always say to clients is, if we plan it properly, you can have it both ways. You can have a nice soft landing and yet you can accomplish your financial goals at the same time.”

Owners need to hear this statement often.

Richard Burrock is another advisor who honestly telling business owners what they need to hear, not just what they want to hear. I concur with his suggestion “that owners begin planning early, at least five years before retirement.”

Nelson substantiated Burrock’s comments by referencing research by Expert Ritch Sorenson, professor of entrepreneurship and academic director of the Family Business Center at the University of St. Thomas’ Opus College of Business. Sorenson’s succession research “emphasizes the importance of developing a common culture that can sustain and be sustained across generations,”

Sorenson also endorsed the advice to begin business [succession] planning early.

If you have questions about your succession planning readiness, contact us to schedule a free consult.

* emphasis is mine.

Pain of External Factors Discourages Business Owners Preparing to Cash Out

Are you uncertain about the future for you, your family, or your business? If so, your instincts and intuition are on target – you can’t afford to ignore the facts. There’s an unavoidable confluence of factors that require your immediate planning and action.

  1. Sellers’ Competition Increasing – 8.1M Baby-Boomer Business Owners think they will sell/scale or in some way cash out of their business by 2018. It takes 2-5 years to prepare the business so you can achieve the maximum returns. Another 8.1M Baby-Boomer Business Owners intend to sell in 5-10 years. Anyone in the first group who was slow to market will now compete with an added group of 8.1M peers – likely even more desperate to get out quickly and seeing how difficult it was for the first group of Baby-Boomer Business Owners to transition.
  2. Seller’s Window in the Market is Shrinking – 2013-2018 is a seller’s window (sellers have the advantage in a transaction, buyers have the liquidity, and this is the leading edge of a huge selloff/transition of ownership across industries). If you wait too long, you’ll miss this window. In 2018, the market itself flips and becomes a buyer’s market until 2022 (buyers will have the dominant advantage in a transaction, there will be even more sellers than buyers, and buyers will have more choice and can drive prices down).
  3. Inflation Will Wipe Out Any Leverage – Quantitative easing will not solve the US debt problem. The only option the government has is to allow inflation to rise – some say up to 50% – in order to wipe out the debt. Inflation, which is being held down artificially, will rise to heights we have not seen since the 1980s within the next five years. After that, inflation will wipe out any leverage or advantage that sellers have in a transaction.
  4. Longevity – In your retirement and investment planning, your business will likely be a dominant source of the cash to fund those plans. Do your reinvention plans assume you’ll live three years beyond your exit? Until age +/- 85 as some of the newer data suggest? Or do you want to be on the other end of the curve suggested in a recent TV commercial by Prudential and live to 100 or 110? The bigger question then becomes, have you indeed made adequate plans for your resources to provide for the lifestyle you want for another three or four decades? Or to leave a legacy that will last another 100 years?

There’s no denying these trends are happening. As much as business owners are taking a beating from all these factors, a wait and see approach is about as effective as hiding your head in the sand like an ostrich. Rather, look at these external factors as a warning bell to plan now so you get to cash out and move on to your transition on your terms and your timeline.

It’s never too early or too late to plan your exit. At Exit This Way, we can help you through this minefield with strategy, tactics, and much more, the sooner you call.

Successful Entrepreneurs as CEOs

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.

Stagnant 95% Statistic

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.

Qualifying Questions For Your Exit Planning Virtual Partner


Virtual Partner – Exit Strategist

When you are ready to ask for exit planning help – how to get out, where do you turn for help? You need to know if they are dedicated exit strategists or is their primary business in a related field or expertise? Here are five questions to ask potential advisors to determine if they will focus on your best interests.

1.   What is your specialty? What is your core business?

You want an exit strategist whose focus is exclusively on your optimal exit, who is not distracted by other disciplines.

 2.   How will you charge me for exit planning services pre and post transaction?

You want to know you are being charged for exit planning expertise and exit planning time, not attorney time to do exit planning. You need an exit strategist on board, engaged in your situation years before you need your attorneys, accountants, and wealth and insurance advisors.

 3.   How engaged will you be in my operational implementation and transition up to the transaction?

Leading up to the transaction, licensed advisors will be focused on the expertise they bring to the table. Their availability will be limited to help you with operational decisions and issues leading up to the transaction. After the transaction, you will need your exit strategist engaged to ensure your total integration into your reinvention lifestyle, but after the transaction, licensed expert advisors will move on to the next transaction. How much will they/can they be there for you?

You want an exit strategist who will be fully engaged in operational implementation, growth and optimization strategies, and your own transformation from operational president/owner to the strategic CEO of a stronger more profitable enterprise, not just the 6-month end game.

 4. Will you help me assess exit options and timing/tax/liquidity impact of each?

You need an exit strategist to help facilitate discussions with all your exit advisors to integrate their recommendations and tradeoffs for each exit option you are considering. Any of your transaction experts who stay focused in their own silo of expertise cannot provide the wider perspective you need to make the best decisions.

 5. What will you do to assist me in determining my reinvention plan and my goals and lifestyle beyond the business exit?

All the licensed transaction experts you engage for their expertise can ask you all the right questions, but they expect you to prepare and deliver the answers on your own. You need an exit strategist who will assist you in developing your reinvention plan and lifestyle beyond the exit, test it, refine it and lay out a blueprint to implement it from Day 1 of your reinvention.

Whether you engage the Exit This Way Out Group as your virtual partner or not, you need to use the materials, checklists, tables and guidelines provided here on the site and in our home-study course to make your business a wealth producing machine that will provide the financial independence you dream of to fund your reinvention.

The Sun Never Sees A Shadow

sun never sees its shadow

Think of the most successful business leaders you know. They are never idle. They don’t stand still. They are always moving forward. They don’t look for problems and opportunities just from one angle. They keep moving and view their business from all directions. They see the shadows and explore what’s hidden in those shadows. To accelerate growth and maximize value, they seek out and find new solutions and get meaningful, life-changing results that their competition never will. In every decision they make, they are always asking; “is this decision taking me closer or pulling me away from my long-term plan to sell/scale or find a successor.”

Obviously, there’s much more to learn and much more that can be achieved to make your business a wealth producing machine that allows you to transition to your reinvention, fulfill promises and walk away with the financial freedom to live the life of your dreams.

I can help you get there faster, sooner. I can make the job easier, and far more enriching for you if you’re interested in my personal assistance.

Exit Planning for Your Transition to Reinvention

Ideally, exit planning occurs before action in every area.

Too often business owners/CEOs assume that because they want to exit the business soon, that they just have to act to make it happen. In fact, they are often surprised by how extensive the planning is that they must work through before they can get out and transition to reinvention.

Exit planning must include each parameter on this list.

Exit Objectives – Before you proceed, you must identify your exit objectives for the business and for your life beyond the exit.

Value Drivers – You must identify your value drivers, the value drivers that will make the business buyer attractive and the value drivers that secure the future growth of the business and protect your employees.

Transfer Control/Ownership/Management – Control, ownership and management are not the same thing. So planning how to transfer these different skill sets to successors is essential. You need to break them into distinct skill sets before you decide who you will train to succeed you in each area.

Contingency Planning – When things are running smoothly, owners think contingency planning is irrelevant. But if illness or an accident incapacitates you, your valuation will plummet unless you have a contingency plan/continuity plan established, documented and ready to activate.

Wealth Management/Preservation – You have to decide how much of the illiquid wealth of your business you want to leave in the business, to maximize valuation and secure future company success vs. how much do you need to liquidate to achieve your exit criteria and the financial freedom to pursue your reinvention.

Successful Exit – Defining and planning what a successful exit means to you is important. There is no vanilla answer. It’s unique to you, your family, your goals, your business, the lifestyle of your dreams. If you can’t describe it, you will never know when the package on the table meets your needs.

Exit Options – The earlier you start exit planning, the more options you have, the wider range of exit vehicles, wealth vehicles and reinvention options you can have.

Exit Criteria for your Transition to Reinvention

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?

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