Exit planning is a dynamic process of creating incremental wealth. Business Owners willingly take part in the process of creating something new, from the old, that has value, by devoting time and effort and assuming the financial, psychic, and social risks. When you are ready to exit, you will receive the resulting rewards of monetary independence and freedom from your effort and the personal satisfaction of creating a viable business.
I have had the pleasure of networking with, collaborating with, and learning from entrepreneurs preparing their exit or exiting their business on a daily basis for the last five years. It has been an ever-changing, exciting, and passionate journey!
My journey helped me discover 10 mind-sets an entrepreneur wishing to transmit her/his business should demonstrate. To be successful attracting the right buyer or successfully passing the reins of the business to the next generation these mind-sets can be summarised in one acronym “REBOUNDING”. To adapt these mind-sets you must put them into practice. It isn’t enough to want to believe something–you have to act on it and practice it before it becomes a habit.
One: You Must Review and Re-Learn your business
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Over the last five years I have worked with hundreds of successful entrepreneurs to help them building a business continuity plan and every single one of them continuously invested their time and money in furthering their knowledge base to find new technologies, new way of doing things by reviewing and understanding the new trends and the competition, to reinvent their way of serving their clients. Re-learning your business continuously will enhance the value of your business in the eye of a potential buyer.
Two: You Must Map your Exposure to Risk
You must understand that one of the keys to have a valuable business is to be willing to take risks even more when you decide to exit it. This “active” mind-set means there will definitely be failures. But failures are just indicators of which direction to go next.
In order to reducing failures to grow the value and viability of your business you should make sure to transform your personal and each employee goodwill into a total business goodwill being aware of external and internal factors that could be a barrier to your success;
External factors: Changes in worldwide/regional/local economies, Technological changes, Governmental and regulatory changes
Internal Factors: Employees and other stakeholders, existing business systems and processes, leadership, management, marketing, finance, operations, sales…
Three: You Must Define your Business’ Benefits
Successful entrepreneurs love giving maximum benefits to their customers. They love answering their customers’ problems with new products and/or services. Through service, entrepreneurs build a database of loyal, trusting customers. Loyal customers in the eye of a potential buyer are golden egg.
Four: Your Business Model Must Be Original
Having a business model that will differentiate you from the competition would appeal to a new buyer so you and your team should thrive on creativity. All stakeholders of the business will be energized by new ideas and possibilities. You must embrace your creative force and embody it because it will give you the ideas and solutions you are looking for to have a smooth transition when you decide to exit.
Five: Your Action Must Be Unrestricted
You should stay in control of the process. A well-developed exit plan enables a business owner to maximize the value of the business, minimize taxes, and ensure that he/she is able to accomplish all personal and financial objectives in the process. You will be able to:
Six: You Must Nominate a Successor and Build a Team around him/her
Letting go and delegating is the hardest of the 10 mind-sets to master for exiting entrepreneurs. You must adapt the “investment” mind-set when building a team. You must be willing to pay for high-quality dynamic people and be able to delegate tasks and projects. You have been at the helm of the business all those years, making all decision, you have been innovative and you like things a certain way so you felt into the trap of doing everything yourselves. A potential buyer will be scared away if this is the case, s/he will fear that, without you, the business may collapse and s/he may lose his investment. So appoint a successor and build a team, delegate, and build a strong foundation for your business that will prosper even when you are exiting.
Seven: You Must Be Desirous to Build a Viable Business
Most business owners feel like they are on an island–all alone. But if you are passionate about those you serve, have a competent and efficient team around you, the passion will be your fuel as you collaboratively build a sustainable business with a solid foundation. And the blessing of being passionate about your work is that it will spill over into every part of your life. You will have the energy to develop new personal goals and interests for the after business life.
Eight: You Must Improve
You should continuously improve yourself and set higher personal and business goals year after year. Understanding and honouring your growth is crucial to the sellability of your business. Author Jill Badonsky says that, “we evolve only when we participate, not when we sit on the sidelines fearing inadequacy. And the more we act, the more wisdom, confidence, and excellence we receive.” You should build an entrepreneurial culture within your business. Having an entrepreneurial culture means that your employees will evolve and have high energy levels and a spirit that propels your business through all the tough days.
Nine: You Must Move the Central Nerve of your Business from You to the Team
To have a smooth transition you should stop working on every project or idea you have for the business you should concentrate your effort on your main goal, have a successful exit, or you will suffer from the end result of overwhelm. Through focus (a force or intensity that gives importance to something) you will accomplish more because you are concentrating your energy in one direction. So you have to consciously refocus every day on accomplishing your goal, exiting the business on your terms and conditions. Let your successor and the team drive the business forward, making the right decisions, by coaching them and giving them clear directions.
Ten: You Must Increase Your Grey Cells
This is my favourite mind-set. I love being intellectually challenged and thinking big! It energizes me and is what makes my “work,” or should I say my hobby, a lot of fun! According to Michael Port, to do big things in the world, you have to do them with other people, you can’t do them alone.” So you must think big and leverage everything you have to network with and collaborate with other thought leaders. Success can only happen with synergy! When you exit your business you should make sure to keep intellectually challenged and connected with the active world or you will be bored very quickly and lose your “joie de vivre”
If you would want to know more on how to transition out of your business and would want to explore what you should do please do not hesitate to call Jean-Bertrand de Lartigue on +44 1656 766 363 or e- mail him at JB@macint.co.uk