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A Strategic Look At Why You Should Develop A Business Exit Strategy Now!

I often ask prospective clients if they have an exit strategy for their business. Too often, I get a response that tells me: they do not have an exit strategy; they never thought about an exit strategy; they have one “in their head;” and/or they have one but they have not documented it properly and do not have contingencies covered. One of my favorite authors, Michael Gerber, in his E-Myth books tells us that we create a business to sell it and that if we do not do that, we own a job not a business.

So, with Michael Gerber’s thoughts in mind I would say that whenever you create a business or something that’s interesting and useful, you create a business or something that’s worth selling. And subsequently, when you’re thinking of selling a business or something that’s as important to you and your future well being as your business, it’s critical to have a well-developed plan firmly in place.

The ending of a business by a business owner is known as an “exit,” and the planning of a defined ending is called an “exit strategy,” in business terminology. The development of a well thought out and documented exit strategy demonstrates that you are in control of your business, that you’re a strategic thinker and planner and goal focused, and that you have a well defined plan for an organized and profitable ending for your business.

Unfortunately there are too many business owners who have not planned for an ownership transition and therefore are jeopardizing the funding of their retirement and/or the future care and well-being of their family and/or others. And the really sad part about this is that this failure to fund a comfortable retirement and other future needs doesn’t happen because these owners failed to create value in their businesses. No, it happens because they failed to do the critical and strategic exit strategy planning that would have allowed them to keep that value.

One of the lessons learned as a business coach and that I have tried to pass along to my clients is that if and when they seek angel investors or venture capitalists, those investors will require that them to have a viable exit strategy in place before they’ll invest a single dollar. Some business owners who are approaching retirement may want to sell their business to an outsider, a key employee, or to a fellow shareholder or partner. Or, they may want to transfer their interest to children or other family members. But the million-dollar question is: “How can all of this be accomplished?” Well, the million-dollar answer is you must have a well planned and funded exit strategy.

Perhaps you are a business owner who is just now thinking of developing an exit strategy. I applaud you for that. My advice is to do much more than think about doing it. You need to start planning your exit strategy today, keeping in mind that defining it is a strategic planning process that requires careful thought. This type of plan is not done quickly and haphazardly. It is planning that requires some outside advice and effective strategic thinking. From my experience in business coaching and strategic planning, I have found that all strategic exit plans should identify the following:

A current valuation of your business

The major factors that drive the value of your business

Strategic methods to increase your business value

The potential future value of your business

Options for ownership change

Options for funding of the ownership change

Protection/risk management re: the ownership change

Defined tax implications of ownership change.

Potential tax-saving methods specific to your business

The likely proceeds from strategic ownership change

You can ensure a smooth transition and make your business more valuable and desirable with a proper business valuation and some sound exit strategy planning. The strategic exit strategy is a key component of your strategic plan and will provide guidance to you to make the decisions that will position your business to reach your exit goal.

Your strategic thinking business coach encourages you to fully realize the benefits of business coaching to strategically plan for increasing the value of your business and strategically planning for an ownership transition for your business. If you would like to learn more about how a strategic thinking business coach can facilitate and guide you in that endeavor, please contact Glenn Ebersole today through his website at http://www.businesscoach4u.com or by email at [email protected]

How A Business Coach Can Help You Build Success, According To Your Strategic Thinking Business Coach

The professional services of a business coach are really very similar to that of an athletic coach. One major difference though is that business coaching is undertaken for the benefit of a business or an organization. Business coaching focuses on improving individual performance and on improving team performance. And with improved individual and team performance comes success. But how can a business coach help your build success in your business? Your Strategic Thinking Business Coach offers a few thoughts.

A business coach will assist you in unlocking the potential in your business by helping the employees improve their skills and helping the team work together more efficiently and effectively. As a business coach, I know that everyone, from the employees to the management team, to the executive team to the ownership has the potential to perform above expectations. And the way to achieve that higher performance is through proper guidance and building the individual and team confidence through business coaching. The business coach will guide the individuals and the team in setting goals and objectives that will increase productivity and maximize profitability. And the business coach will help them establish timelines and hold them accountable so they do reach their goals and objectives.

Another important thing to remember is that business coaching is different from business consulting. Too often there is confusion between the two. In fact they are very different from each other and are undertaken for achieving different sets of goals and objectives. For example, the business consultant offers solutions to questions, problems challenges, etc, based on the business consultant’s knowledge, experience and technical qualifications. And the advice provided by the business consultant may or may not work in addressing and solving your challenges and problems. On the other hand, business coaching provides the freedom for employees and teams to explore and find the solutions for themselves. The business coach provides the right guidance to the individuals and the team so they are able to unlock their respective true potentials.

In reality, it takes a great amount of skill and patience to be able to connect with the employees and their teams. This is facilitated by the professional services of a business coach. The business coach provides needed guidance to the employee and team members to help them to overcome common organizational problems.

One of the significant contributions to a business and individual team members can come from conducting a SWOT (Strengths, Weaknesses, Opportunities & Threats) analysis. A business coach will help the employees and the teams identify their strengths and weaknesses, as well as heir opportunities and threats. Then the business coach will provide guidance to enable them to overcome their weaknesses, build upon their strengths, take advantage of their opportunities and minimize the threats.

A business coach also enables the employees and their teams to understand the vision, mission, company core values and goals & objectives of the company. This helps them to contribute to the overall success of the organization. Business coaching will enable employees and teams to learn the techniques to improve interpersonal communications and relations with their peers, their subordinates, their leaders and others. This will have the positive impact of increased cooperation between employees and their team members. And this will in turn help to increase efficiency, productivity, quality and morale.

5 Success Indicators to Knowing If You Have a Hobby or a Business

I’d like you to take a step back, look at your business as an outsider would and ask the question “Is this a hobby or a business?”

Put aside the anger that immediately boils to the surface because, after all, you are working 12 hours a day, 7 days a week; eating and non-sleeping this entity known as your business with little financial return and look at it objectively.

There will come a time (if it hasn’t come already) when you get up one morning, exhausted and overwhelmed, and ask yourself “What happened to my vision of carefree self employment where I’m my own boss, there’s plenty of money and I’m a raging success? Did I take a wrong turn on the road to success?”

Be thankful for that day. That is the day you realize you have a great opportunity: to step up and act like a business (and recognize the limitless possibilities) or keep playing with your “hobby” (and be realistic about your income potential). Up until that point, chances are you’ve been more focused on your specialty (bookkeeping, massage therapy, virtual assistance, etc.) than on running your business (think “technician” rather than “manager”).

As a “business”, you must focus on the future and look at planning and revenue. As a “hobby”, you focus more on today.

If you wish to create a business, especially a successful one, you must have certain success indicators in place (just ask the IRS):

1. You have a business and marketing plan.

If you want your business to be successful for the longer term, you need to define what “successful” and “longer term” mean to you. Your business plan must be written and adaptable to the change that will happen.

I strongly recommend that you have a separate marketing plan which outlines the activities you will do to attract more clients. Your business and marketing plans should be living, breathing documents which you use to keep on track.

2. You act like a business.

Your business has its own identity or brand. You have a “look”, possibly a tagline and cohesive marketing materials.

Your email address has your domain name in it (e.g., [email protected]) rather than you using a generic account such as [email protected].

And, most importantly, you are not mixing money between business and personal. You track your business income and expenses in a software such as QuickBooks and not in a shoebox timidly carried to your accountant each year.

3. You’re making money.

Your business needs to be holding its own and then some. OR, at the very least, well on it’s way to profitability. You can’t be drawing out of your savings or racking up credit card debt with no idea of when you will actually start making money.

Hobbies can cost a lot with no hope of financial return aside from the sheer pleasure of engaging in them. Businesses can not.

4. You have a team.

As a solopreneur, there is only so much you can do. . .and do well. To build your business to the point where you are focusing only on your core strengths (which should be the same things that bring in the revenue), you need someone to delegate to.

5. You continue to learn and improve.

As a business owner, you must continuously review what’s working and what’s not in your business and make changes accordingly.

Personally, I do two things to insure that my business (and I) continue to improve: 1/ I invest in myself by hiring good coaches — I currently belong to a very small, high end Mastermind program run by Alexandria Brown in addition to working with another coach who consistently challenges me and 2/ I created a “Flash Report” for my business — one of my virtual assistants populates the report and sends it to me each Friday. It tells me what’s working and what needs tweaking within my business (more on this coming soon).

If you dream of a business where you fulfill your passions, work less, yet make more while making a difference in the lives of your clients, these are just a few of the indicators that you want to insure are in place. The proper systems will do more for you than a thousand networking meetings. :-)

I challenge you to take a hard look at your business over the coming days and see where you can improve — make a list and choose one indicator to work on over the next 90 days.