Posts tagged with: value

Your Exit Skill Set Must Include Leadership

When you decide to sell/scale or pass on your business to a successor, you can’t abdicate and retire on the job. Your continued leadership is essential to achieve the best result for you, your team and the business. Your exit skill set must include leadership. Your leadership, not management, will attract ideal buyers.

Leadership

Great leadership is the key to success. Great communication is the key to great leadership. Think of any great leader in modern time: Gandhi, Martin Luther King, Jr., and John F. Kennedy come to mind immediately. They were powerful leaders because they could inspire people to follow them. It was their ability to articulate their vision that made them successful in achieving their goals.

What will it take to transform you from an operational President to a strategic CEO? What will it take to lead your business to conclude the best possible exit to guarantee your reinvention?

In your organization you must be the leader who inspires the team to great heights. To get them to follow you, be sure they are listening to your values and your vision, and then establish the right environment for them to thrive and grow.

Values

When I mention values, everyone nods their heads as if to say ‘of course, Kerri, that’s obvious’. But, when I check up on this piece, I find the last time they discussed their values – personal and professional–  with their team, was often in the interview before their people were even hired.

You must clearly know your personal values and your organization values to lead effectively. For example, do the answers to these questions come readily to mind?

Personally:

  1. What do you stand for?
  2. What is most important to you?
  3. What would you like your life to demonstrate?
  4. What is your personal mission in life?

Professionally:

  1. What do you stand for?
  2. What are you willing to do to get new business/maximize profits/sell the business?
  3. What are you not willing to do?
  4. Do you have a professional mission statement?

Quality leaders don’t change their values over time or to achieve short-term success. Consistent core organizational value systems form the strong foundation for long-term success.

A simple definition is that your values are the rules by which you play the game. A well-defined value system makes all decisions easier and encourages your team to go where you lead.

Business Owners Never Get to Exit

“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:

  1. Entrepreneurs don’t start by having any goals, never mind an exit plan. They only have hopes and dreams.
  2. They never take action.
  3. 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):

  1. have no plan and
  2. 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.

Where is Your Value? Is It In You Or In Your Business?

Do you know where the value is in your business right now? Is the value in you, the owner/entrepreneur? Or is the value truly in the business itself?

This is the uncomfortable wakeup call for most entrepreneurs. Are the expertise and the business strategy all in your head, and in your proprietary files? Here’s the risk:

You have nothing to sell and
you have no exit options
if this is still true.

Instead, you can and should start now to:

  • train others on different pieces,
  • outsource different pieces, or
  • start delegating more and more.

Start now because it takes time to transfer knowledge, expertise, systems and processes, nevermind responsibilities, to others. In some cases, you’ll know exactly what to delegate and who should be doing tasks instead of you. Sometimes you already know who should take on responsibilities or who is ready to step up to take on more responsibility. When you start early, you can train and groom people to grow into positions and responsibility – which ties them to the business more. Both add value to the business when you want to get out.

When you outsource, you have the flexibility to divide up work piecemeal and try different vendors and sources to get work done. When you start early, you can find those vendors who fit your needs and adapt well to suit your corporate culture and become an extension of your team, again adding value. And if a vendor is not an asset when you are trying to maximize value for a potential buyer, you have time to find and train the replacement within your timeline.

When you offload operational responsibilities, you can focus on leadership and strategy to make the business more valuable now and for a future buyer.

The side benefit of delegating, outsourcing and automating is that you free up time to work on your most valuable activities including your exit strategy to achieve your ultimate goal.

“Business owners do not plan to fail.
But 95% fail to plan. Don’t be one of them.”
 

Plan Ahead – You MUST Know Your Exit Date

You must know your exit date
(or at least the criteria for it)
and set it at least 2-3 years out.

In order to have time to systematize, streamline and leverage your business to get the maximum valuation.

To get the results you want:

  • Your exit strategy must be part of your initial business plan
  • Your exit strategy must be part of your annual plans every year
  • Your exit strategy must be built into your 3 year goals from the outset

Identify Goals To Increase Value

What can you do to maximize the value in your business? To achieve your goal, you must:

  • Sell more
  • Increase prices
  • Reach new markets
  • Reduce costs
  • Hire/Train
  • Document your expertise
  • Research and prove your market position
  • Revisit your business plan, vision and mission statements
  • Clean up your financials

Is The Value Right Now In You Or Your Business?

This is the uncomfortable wakeup call for most entrepreneurs. Are the expertise and the business strategy all in your head, and in your proprietary files? You have nothing to sell and you have no exit options if this is still true.

Instead, you can and should start to train others on different pieces, outsource different pieces, or start delegating more and more. The side benefit of delegating, outsourcing and automating is that you free up time to work on your most valuable activities including your exit strategy to achieve your goal.

“Business owners do not plan to fail.
But 95% fail to plan. Don’t be one of them.”

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