Who doesn't love the thought of a big, fat, exit cheque after giving your life to building a business? Even if you never want to sell your business, growing it as an asset that one day will remain in your family as a source of financial freedom is the dream for most entrepreneurs. The only problem is we never think about succession planning until it's too late.
This week's Reinventing Perspectives Podcast guest, Darryl Bates-Brownsword is a business consultant and coach at Succession.Plus UK. Darryl breaks down why it's never too early to think about what kind of exit we intend to have. Remember there is life after business, and the better we plan for it, the sweeter it will be.
Darryl shared some staggering statistics around business exits:
Only 1 in 5 businesses that go to market get sold.
This means, when most entrepreneurs decide to sell their businesses, only 20% of them are successful. The rest either close doors, fold up their business or try to get what they can through fire sales. It's not ideal. Entrepreneurs are the hardest working people despite the odds being against them from day 1.
Enough doom and gloom. How do we prevent our life's work from not amounting to anything? Darryl says:
"Think of your business as an asset rather than just growing the revenue."
It's about creating value, and not merely about producing revenue. This changes the way that small business owners make decisions.
A simple rule of thumb that Darryl shared with us during the episode:
Use A Buyer's Lens
What makes your business a risk to a buyer? How can you reduce that risk? For example: If you have a process of bringing in clients through quarterly live launches that has been perfected over time, that is worth more than a business that is constantly looking for leads weekly with no predictable outcome. If you have repeat customers rather than new customers with every purchase. The point is stability, and predictability that is a result of systems and processes followed consistently.
Employee share ownership plan (ESOP)
IPO (Initial Public Offer)
MBO (Management Buy Out)
As Stephen Covey says in must-read book, 7 Habits Of Highly Effective People, "Begin with the end in mind."
There is life after business. Planning the future of your business should not to be left to chance and circumstances. Begin to develop an exit plan for your business. To help you with that please use this free resource, courtesy of Succession.Plus UK and Darryl Bates-Brownsword ⬇️
🎁 FREE E-book download of Enjoy It: Business Succession and Exit Planning - Your 21 Step Guide To Your Succession By Graig West & Amelia Stuckey
"To fail to plan is to plan to fail. " ~ Anonymous
Happy Planning 😊
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P.S. If you have a topic you'd like us to cover on the Reinventing Perspectives Podcast, just drop us an email at firstname.lastname@example.org subject line "podcast topic". We'd love to help you on your entrepreneurship journey.