Run Your Business As If You Were Going to Sell it Tomorrow

Whatever the stage of your business – whether it’s a start-up, fast-growth company or has been operating for years – your strategy should include an exit strategy. Savvy CEOs and business owners are always looking forward, always asking themselves:

  • How will you ultimately leave the business?
  • Do you intend to sell to family members, employees or an outside buyer?
  • How can you continue to make the business attractive to potential sellers?

Business owners who consciously build or maintain their companies with the goal of eventually exiting – rather than those who are too immersed in day-to-day operations to look that far ahead – put people and processes in place that keep the business running smoothly and successfully. This approach increases the equity value both in the short- and long-term. The objective should be to create an enterprise that does not depend solely upon you, the CEO or owner, for its ongoing value and revenue.

The better a business can function without needing the owner there all the time, the more valuable it is to potential buyers. My next blog will discuss some of the strategies to get to this stage.

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About smudan

Coach to CEO's and Business Owners with an end game or transition in mind while simultaneously building the equity value of their enterprise and creating a better life/work balance.

2 comments

  1. Pingback: Why Your Exit Strategy May Be Flawed « Suki Mudan

  2. J Mark

    Suki;
    Excellent topic.
    Driving value is always of importance and one of the easier ways to implement and monitor progress is to realistically determine what the entity is worth today, what it could be worth tomorrow, and what improvement actions are required to get there. Many of the boards that I have worked with have started with carefully evaluating the management (i.e. CEO, CFO, etc.) and their strategy for the next 12 to 24 months. Once there is buy in on the strategy, then the identified actions to be implemented are discussed in a framework of do they enhance the value of the company. Key outside consultants can be of great assistance towards implementing improvement actions, particularly if the staff and management are already fully engaged. One of the side benefits of engaging an outside consultant is that they could also assist in identifying and training the next generation of management to the degree that current owner’s desire. In any case, the goal of achieving a liquidity event could be a tool that help’s communicate identified actions needing implementation. Obviously the need for careful communication is essential in order to maintain the morale and stability of the existing workforce. However, properly preparing and planning for the sale of a company can produce awesome results for the owners/shareholders.
    Looking forward to your next posting.
    J. Mark

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