Make Yourself Irrelevant – Maximizing Value for Exit Planning
There are many ways to build the value of your business over time. In this blog, I discuss working yourself out of your day-to-day role.
You want to exit at some point, you want to maximize what you get for your business. Exit planning or succession planning, you need to focus on it! It does not just happen. If you wait and wait, putting off a plan, you will end up staying longer in your business than you had planned.
How do you work toward maximizing value when it comes to a sale? Put yourself in the shoes of the buyer. A buyer is looking for something as close to a cash machine as possible. And, one that does not depend on keeping you around to continue – and build – that cash flow.
If you need to be there for the business to be successful, it is not going to be very attractive. Especially if your exit strategy goal is to sell and move on to other things you want to do with your life.
If you can go live on an island somewhere with no communication for 3 months and come back to a still-thriving business, you are on track for a very successful business sale, on your terms.
Obviously, you are leading the team, setting strategy, etc. But you need a well-run machine that does not depend on you for the day-to-day. Think about what a franchise entails. Successful franchises depend on the right leadership, but the basics of the franchise model are built on having proven procedures in place, hiring the right people and training them well.
You do not need to be part of a franchise to look and act like one in this way. There are many more things you can do in working toward that exit and sale price. But a foundation of people, business process development, business process improvement and communication are a critical foundation to start your planning. Written procedures and communication with your team around objectives are two simple but powerful ways to strengthen your business.
With those in place, you can move on to other business planning initiatives to build on that framework and continue making yourself irrelevant.
For more on building value and exit / succession strategy, see: http://shavzinassociates.com/blog/category/exit-succession/