Whether exiting or selling your business is even on your mind is not really the question. Plainly, every owner eventually transitions their business. The significant question is: Have you created a business that is attractive and valuable enough that someone else even wants to buy it much less pay you big bucks for it?
Business value doesn’t come from just selling more or increasing revenue, it comes from being able to find, hire and keep the right employees who make decisions as good or better than you would make, it’s about knowing who your ideal target customers are so you can create a marketing strategy and messaging that resonates, stands above the “noise” of the marketplace and gets heard and understood because it is clear, easy to understand, memorable and repeatable. It’s about having systems that allow your business to run on auto-pilot whether you are there or not. And it’s about Cash-Is-King – having positive cash flow.
Here are some sobering thoughts: [source: Exit Planning Institute]
One: 70-80% of all small businesses are not saleable for the terms and/or timeline the owner wants because it won’t pass the due diligence test. One of those tests is whether the business is dependent upon a single person or a small group of people – lack of systematization. No sophisticated buyer is going to even want to purchase a business like that.
Two: 80 to 90% of an owner’s financial wealth is locked-up in their businesses.
Three: 63% of the business owners indicated they needed the income from the business to support their lifestyle.
Four: 56% of the business owners indicated they needed to harvest the value of their business to support their lifestyle post-transition.
Let me tell you what motivates me to help you build a BIZ to sell.
I’ve owned and operated a small business for over 35 years and I’ve sold two multi-million-dollar businesses that were sold on timelines and terms I didn’t want.
In 2003 I was diagnosed with stage 4 cancer and treated at Mayo for 5 years.
During these 5 years, I learned that my cancer was likely caused by my exposure to petrochemicals – a product extremely prevalent in my auto dealership.
I had two young teenage children at the time and I had to make a choice, keep my dealership and risk a reoccurrence of my cancer or sell and live to see my kids graduate and maybe even marry.
I sold it in 2008. Not the peak economic time to sell.
Then three years ago, my brother got terminal cancer. Before he died, he asked for my help selling his office equipment business. His dream was to sell for $5.5 million when he decided to sell at retirement.
The problem: He thought he had plenty of time to build his business to thrive without him, after all, he was still in his 50’s.
We ended up selling for a far cry from his desired amount.
Those two lessons motivated me to work with small business owners to build their business to thrive as well without them as with them.
Small to medium-sized businesses are the heart and soul of America.
When I sold my new car/truck dealership, I employed 82 people.
Like you, I never missed a payroll.
And like you, we provided access to great health care for them and their spouse and kids.
Our employees purchased homes, autos, recreational vehicles, groceries, took vacations, and their kids got to go to better schools all because we sold products and services that people wanted and needed.
When businesses like yours succeed (and eventually successfully transition to a new owner) the world becomes a much better place. Not just because of the money, we put back into circulation, but when we run a principle-centered BIZ, we affect the community as a whole.
Together, it’s businesses like yours that build the middle class.
It’s because of what you do, children get to go home tonight to a warm meal and sleep in a warm bed. And tomorrow they get to wake up and go to a good school.
We don’t want to help you grow your business just because of you alone. We know what you do with your money. We know the legacy you are leaving matters to a whole community by creating jobs that matter and communities of co-workers that are truly meaningful.
Here’s to the success of your marketing and selling messaging, the systems that help your business run on auto-pilot and the empowered workforce that all allows you to focus on the real success of your business and the legacy you leave.
God Bless you and all you do.
If the owner IS the business, it’s worth nothing.
If the owner runs the business, it may be worth something.
If the business is totally independent of the owner and he or she can take 4-week vacations whenever they want, THEN it is worth money.
P.S. After the execution of our program, you may not want to sell because it will be running so smoothly on virtual auto-pilot generating more cash then you thought possible.
P.S.S. Even if you’re not planning on selling, building your company to Sell It is building a company that is built to own.
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