Do you have a plan or a strategy?
Exiting from many businesses is often a haphazard affair. Some owners do not treat their business as an investment, merely as a job. Others overvalue their business, under-explain its value or not see the value as others may see the value.
A strategy by definition creates future opportunities and increases freedom of action in many possible futures.
A plan drives you down one path with a purpose - and with good grace not over a cliff.
This is the first of a series of articles on designing your exit from the business so, that at a time of your choosing, you will have built financial wealth through your business and can transfer the business with the maximum value to a buyer who will pay you for the privilege.
Most business owners' begin filled with the hope of success and with inspired dreams that would bring great success. Perhaps the hope was for financial independence, for more money, more security to work hard with the prospect of the luxury of free time later, or for personal fulfillment and for peace of mind. Maybe they dream for greater freedom for control over their own fate, for meaningful challenges and escape from the day today and drudgery of working for someone else.
They find themselves running a business, with loyal and talented staff, great customers and proven systems for making money. Life as a business owner is more complicated and strewn with unexpected challenges, one of which is to transfer the business, get your time and money out from under the business and put it toward fulfilling your life's hopes.
There are two bridges to cross to create meaningful value for you the business owner, maintain its value that attracts the right successor or buyer, and allows you to get back your time and money.
The first bridge is to decide to treat the business as an investment, plan for personal wealth management and including the business as an asset. The business objective is now to grow and increase value, and not just provide cash flow to be spent by the owner. The second bridge is to understand that the business can be transformed into a product more attractive and valuable to the right new owner.
Murphy Business and Financial - NC Corp