It might feel like your exit is practically a hundred years away, but the truth is, it will be here before you know it. And that’s if you actually get to plan and execute your exit on your terms.
Many business owners have this idea in their head that selling their business is a given once they’re ready, that it’s just going to happen.
The reality couldn’t be more different.
It’s very rare that a business owner gets the opportunity to sell their business when they are ready and for the price they want.
Only 16% of owners who want to sell actually do, and only a fraction of them get what they really want or need from the business to fund their retirement and live the lifestyle they want to live.
If you’re not thinking about how you’re going to exit your business, you need to be.
You Don’t Know What the Future Holds
No one can predict the future.
Just because you have a vague vision for the way things are going to work when you’re finally ready to sell your business doesn’t mean things are going to go that way.
And even if you have a clear plan for exiting, all kinds of problems might arise in the meantime.
You have to be prepared for all possibilities.
For example, just because your business might be a hot commodity today doesn’t mean it will continue to be one.
What if a competitor hits the market and starts stealing your market share?
What if key employees who have been there for years or even decades decide to leave?
What if the market itself takes a sharp turn in the next 5 years?
What if a family member becomes critically ill and you have to take care of them?
What if you get critically ill and can’t work anymore?
There are literally hundreds of problems that might arise over the next 5 or 10 years that could drastically change your exit plans.
You can’t make any assumptions. You can’t assume that the family member you’re counting on to take over the business is going to still want to do that in 5 years. You can’t assume your partner isn’t going to pass away unexpectedly.
You can’t count on anything.
That’s why it’s so, so important to start planning now for all eventualities.
The Benefits of Preparing Early for Your Eventual Exit
What many business owners don’t understand is that the actions you take to prepare your business for your exit are the same actions you’d take to make your business run better from just about every angle.
For example, one of the biggest reasons a business doesn’t sell is that it’s too dependent on the owner. If the business can’t run without you, then why would anyone want to buy it?
To counter this problem, you need to make changes that reduce the business’s dependence on you. This means you won’t have to work as much or as hard.
And even better, it means that if the worst happens, the business isn’t going to fall apart. You can deal with a family member’s illness because you’ll have the freedom to walk away if you have to.
And if you pass away unexpectedly and leave the business to your spouse or family member, there’s less of a risk that the business will fail, that this huge asset you’re leaving them won’t just evaporate.
Another big change many business owners need to make is to put processes into place that make the business run more smoothly and more efficiently.
This makes the business more attractive to buyers, but it also has an effect on revenue today. Your business will start generating more money while having fewer problems, which makes your life easier.
Businesses that generate revenue from only a few sources are high risk. For example, if half your revenue comes from a single client, the fear that this client might leave when you leave will make a lot of buyers stay away.
Diversifying your revenue sources reduces that risk and makes your business more attractive to a potential buyer, but it also makes your business more stable today. You won’t have to worry about your business falling apart if you lose a client or two.
Once you understand how to prepare your business for an exit and put that into action, your business is going to thrive.
That’s why we put together Get a Grip on the Value of Your Business.
Learn How to Put Your Business in the Best Position to Sell
Get a Grip on the Value of Your Business is a course that will teach you what you need to know to prepare your business for sale.
It will help you become best in class so that, even if you don’t sell, your business will run better than it ever has before.
Ready to build your business’ value?