How much energy do you need to get your business in shape for succession or transition? How much time will it take? When is the best time to enter this phase of your business?
Every situation is unique. You may have a business that’s running well; has documented processes, policies and procedures; keeps the books up-to-date; maintains a consistent flow of business with repeat customers; has managers and employees successfully running the day-to-day operations; demonstrates growth steadily over the past few years; uses up-to-date technology and software; has established a good foothold in a growing industry; and provides products or services that are in demand.
…Or you might not.
If you do, you can relax a little. You’ve already expended a lot of energy. If not, you may need all the energy you have left to get your business ready for transition or sale.
Succession Requires Energy
Energy is one of the most important qualities needed to succeed in business. When you were starting out, it allowed you to work long, often stressful hours and still get to your kids’ soccer games, attend networking events, take training, and volunteer in your community. Often, the difference between success and giving up just short of striking gold is the amount of energy one has.
Fatigue
Vince Lomardi once pointed out that, “Fatigue makes cowards of us all.” Selling your business may very well be the largest, most stressful, most important deal of your life. Your retirement, your legacy, your reputation and the jobs of your employees hinge on getting it done well. If you wait until you are 65 or even 70 to get started (as have a number of business owners I’ve met), you may not have the energy left to do it well. Keep in mind that selling your business is never a slam-dunk. Only a small percentage of businesses that go up for sale actually get purchased and paid for: On average, about 20%.
So picture this. You’re in the home stretch. You’ve decided to sell or transition the business. You’re not as energetic as you used to be. In order to compete you have to get it in really good shape. It’s going to require all you’ve got. Possibly a similar schedule as you had when you started the business.
How long you give yourself will impact how hard it’s going to be. Do you make it a marathon or a sprint? The longer you put it off, the more work there is to do and the less energy you have to do it. Someone once said that the best time to plant a tree was 20 years ago; the next best time is today. The same is true of your exit strategy and action plan.
Contact TAC to learn how we can help you build your succession plan.