Is There a Business Without You?
Selling your business is similar to a corporate employee cashing out their pension. It is the monetary reward for your lifetime of hard work and dedication that will ensure you move comfortably into your retirement years. However, many business owners that are preparing to cash out and move on discover that they are the business, and without them, there would be considerable difficulty in running the company moving forward.
If you are wondering whether you and your business are the same entity, consider this hypothetical situation: if tomorrow you completely removed yourself from your role within the company, would the business still be able to function?
If the answer to this question is no, then there are a number of steps you can incorporate into your exit planning strategy that will help you sell your company when you are ready to exit the business.
Documenting the standard way of doing things at your business should address the important points for your employees to know. This will allow them to resolve any situations or problems without coming to you for assistance. Many owners are reluctant to do this as it can be quite time-consuming, however, this time invested will pay off in the long run. An effective operations system will allow you to delegate more effectively, create more knowledgeable employees, streamline your operations, and will ultimately allow you to command a higher price when you are ready to sell your business.
Developing a management team
Having a strong management team can significantly increase the value of your business, and create a smooth transition process. You can do this by training and promoting current employees, or hiring experienced candidates to head up specific aspects of your business, such as sales or marketing.
Teaching your employees
As a business owner, it is often tempting to have complete control over the business and deal with every problem yourself. However, educating your employees to recognize and develop a way to prevent problems before they happen can go a long way in adding value to your business by creating a more competent group of employees.
Taking a step back
Slowly begin stepping back from your current level of involvement in the business. This will be an important stage of the process for your employees as it will help them to become less dependent on your guidance and supervision. It will teach them how to deal with situations that may arise without having your expertise to fall back on. You can do this over the course of months or years by taking more days off, or longer vacations.
It is pivotal for you as a business owner to be able to distinguish between you and your company. If there is no distinction it will be very difficult for you to fully exit when you are ready to move on. If you think you may fall into this category, consider implementing some of the points above to improve the value of your business.
Incorporating these steps into your exit plan will provide you with a smooth transition out of your business, and allow you to sell your company for maximum value.