May 31, 2023
During the process of selling your small business, as an owner the valuation is all that matters. If you think the company is worth $$$$ and the numbers come back as $... you will likely be shocked. The gap between your fictional gut feeling for value and the sudden smack in the face of truth is often rooted in a lack of preparation. You were likely too focused on running the business to position yourself with an exit strategy and time has now run out. [If you were a squirrel, you may have been collecting nuts all season long but they ended up not being the right type that would allow you to get through the winter]
Some owners that I speak with indicate that they didn't have a chance to prepare the company to operate without them because a life emergency came up before they PLANNED on exiting. Things happen. But the reality is, every business owner should be preparing for this day - from the beginning. By doing so through process documentation and clearly defined communication with your staff, not only will you be able to retire when you want, you will be freed up to take a legitimate vacation without worrying about how the company is running without you.
During a meeting with business intermediary, Dean LoBrutto earlier this week, he expressed the same sentiment. Dean is the guy you call when you are ready to sell but many owners wait too long to connect with him. Often the resulting business valuation that he provides is not what it could have been. Dean said: "Reducing risk in a business improves both its efficiency and value, and documenting its systems is one of the best ways to achieve that. This is particularly beneficial to owners who want to be prepared for the eventual transition of ownership."
I think the key part of Dean's observation is that through process documentation, you are reducing RISK. This translates into a confident buyer who is willing to pay a higher price. As I always say: "You can't get in shape by going to the gym the day before the big game". Don't wait until winter! Message me to learn how easy my Systems Success program makes it to develop a comprehensive playbook. Then we can reach out to Dean so that your exit strategy results in a happy ending.
