Trending
I always tell business owners the following: Exit planning is NOT an event
One of the first things we do with clients, after the initial period of assessment and valuation, is to ‘de-risk’ their business and personal life. The foundational reason for this is because we can’t predict the future and your business affects much more than just yourself.
Personally, this is very important to me because of the losses I have suffered in the past because of a lack of contingency planning and procrastination. When my son was born over 20 years ago he was extremely premature and spent his first 4 months of his life in the NICU (neo natal intensive care unit). He weighed 1lb 4oz and had many serious issues that resulted in multiple surgeries (brain and heart) and several ongoing severe disabilities.
This all occurred while I was at the height of my career as a franchisee and a franchisor while enjoying the publication of a best selling book with two other authors. I was living the dream…until I wasn’t. My entire business strategy was tailored around growing the business with an abstract concept of selling it someday in the future. That wasn’t a resilient concept.
As a result of my son’s medical trauma and the horrible emotional toll it placed on me, I became more and more depressed and angry and ended up being unable to function effectively in any of my businesses and as a result sold them for pennies on the dollar. This was a brutal result for my family and we struggled financially and emotionally for over a decade as a result.
This is why I agree with Chris and Scott Snider, owners of the Exit Planning Institute when they say that “exit planning is a good business strategy”. I would argue that in most situations I come across, the process of preparing your business for your eventual exit is actually the best and most resilient strategy I have yet to see. This is because inherent in the process is matching your timeline for exit (1, 5 or 15 years) up with the appropriate and reliable value growth strategies that will increase the value of that exit accordingly. Basically, we aim to improve the current business so that the exit value increases.
What comes along with that, since this is a process you control as the business owner now, is usually more profit and enjoyment. Ironically, the process done extremely well often results in owners that are having too much fun to exit now, but are ready if something unexpected happens at any time.
Related: The #1 Reasons Referral Groups Fail Successful Professionals