Few small business owners think about building a company to sell it. They think about building a company to support their family or hand it down to their children. But building a company to run and grow, and building a company to sell can actually be the same thing with different planning.
Without the guidepost of selling a business, a company closes its doors when the owner tires of running it. Whatever the owner has invested and saved is the extent of his financial security. On the flip side, a company strategically designed to be sold has a value in the marketplace and offers a financial reward to the owner upon the completion of the company sale.
Both companies require the same blood, sweat and tears to build and grow, but only one yields a reward in the end.
I’m going to challenge you to recalibrate your priorities. No matter what goals you’ve set for your company, whether they are profit targets or growth objectives – put ability to sell your company on the top of your list and begin structuring your business with this new strategy in mind.
Becoming the Best CEO You Can Be – take this job and love it
When you build a business to sell it you are consciously structuring your company to operate without you. This by definition is leadership – the ability to lead and inspire others to carry out your plans. As a CEO, this is where your energy is best focused. Your job is to create a dynamic and well run company. Your company’s job is to execute on your vision and perform at their highest levels of efficiency. Done right, your company becomes an operation that can be transferred to the next owner.
To accomplish this you’ll spend your time on big picture planning and strategy while your team handles the daily minutia.
Creating Financial Freedom – your future is up to you
With an exit strategy in mind you are designing your financial future. You will have a specific plan and timeline to calibrate how your financial life and the life of your company will unfold. As you lead your business through its growth and development phases, you’ll make decisions based on your ultimate goal – to sell the company. This creates a new reference point on which to base your thinking. Creating value rises to the top of the priority list and actions and decisions become aligned with this goal.
The Shoemaker’s Children – what’s good enough for you isn’t good enough for a buyer
As in selling a home, it is not uncommon for a homeowner to live with and tolerate imperfections. A loose railing or outdated kitchen may become an invisible annoyance. When it comes to selling the house, just like selling a business, everything has to be fixed to make it desirable to the next purchaser. Ask yourself, “What have I been tolerating in my company that needs improvement?” Is it faulty systems, outdated processes or inefficient accounting? What has been good enough for me but will not be good enough to attract a prospective or future buyer?”
With a plan in place to sell your company you’ll be inspired to take an unvarnished inventory of the people, processes, costs and efficiencies to finally fix what’s faulty. Had you planned to sell your company from the beginning, you may have attended to these things more expediently as they arose.
The good news – it’s not too late to start
I have a terrific free tool on my website that walks you through the questions you need to ask to find out if your company is salable. Whether you’re considering selling in five years or in the next generation, make it a priority to put the right planning into place for how to sell your business.