By Michelle Seiler-Tucker, Special for USDR
Entrepreneurs dream of the day that they can call themselves business owners. They want to grow their ideas into tangible results, be their own boss and obtain financial freedom. However, the reality is that many of these individuals end up creating another job for themselves in which to work, rather than a business that works for them. The biggest mistake business owners make is that they do not plan their exit strategy. Most business owners decide to sell upon the occurrence of a catastrophic event, in which case their business is typically trending downward. The BEST time to sell is when your company is thriving, not dying. Every owner should plan to sell their business for THE ultimate value in which they need to enter the next phase of their life. There are 30 million businesses in the USA. Small businesses are the backbone of the US economy. There are millions of baby boomers planning to retire. Unfortunately, there are startling and frightening statistics facing our baby boomers; 8 out of 10 businesses will not sell for a multitude of reasons. Many of these owners have ended up selling for pennies on the dollar, closing their doors or filing for bankruptcy. There is always a series of choices that become realities which lead up to that moment where either a business sells for millions or is forced to sell for pennies on the dollar.
Let’s work to strengthen the US economy’s backbone by learning how to “BUILD YOUR BUSINESS TO SELL FOR YOUR DESIRED LIFESTYLE.” This plan works, saves and creates jobs and filters money back into the economy!
The solution to this conundrum is as simple as it is complicated. However, common sense is not as common as it once was. No one ever plans to fail, they fail to plan. We have become an INSTANT GRATIFICATION NATION! There are NO short cuts in life. However, following in an authority’s footsteps can save you a tremendous amount of time, energy, effort and money. My long road has certainly became my clients short road and has lead them to an amazing path of wealth and happiness.
First: you must determine your WHY! Why do you want to own a business, obtain financial freedom and sell for millions. Business owners typically weather all types of financial storms and at times it can be difficult to keep your financial boat afloat. Therefore, your WHY must be bigger than yourself and powerful enough in order to give you the strength and courage you need to steer your vessel towards greatness and to drown out the negative voices in your head along with the naysayers who threaten to steer you off course.
Second; informational, transactional planning and speed of implementation are the key ingredients to success. Take inventory and identify if you are in control of your life and or if you are on autopilot. Now is the time to take control of the wheel and steer yourself towards your financial destination.
Third: Plan your exit strategy, know your current valuation, determine your desired sales price, identify your ideal buyers, create your 5-10 year projections and reverse engineer a step by step blueprint in which to obtain your ultimate objectives. Share your LIFE PLAN with your circle of influence and solicit the advice of the brain trust along your path to greatness.
Fourth: build your business to sell for its optimal selling price, focus and take ACTION accordingly in regards to six factors known as the “Six P’s”: People, Product, Process, Proprietary, Patrons & Profits.
1: PEOPLE: If you do not have an assistant, you are the assistant. As my friend Donald Trump states, “Surround yourself with people smarter than you.” I cannot stress the importance of hiring intelligent, loyal, and hardworking employees. This is crucial to your business’s worth.
2: PRODUCT: Product uniqueness increases the company’s value immensely. Make sure your product fills a void, offers a niche and creates the highest demand.
3: PROCESS: Process is the deadbolt lock to a buyer’s heart. Create an automatic, systematic, sustainable and seamless process that is proprietary, productive and cost effective. The show must go on, once you’re gone
4: PROPRIETARY: The more intellectual property you have the MORE VALUBLE your company will be and the more buyers you will attract. 95 % of businesses are NOT properly branded. Build your company and personal brand. In addition, ask yourself the following: is your industry unique, do you have a niche, any patents, trademarks/trade secrets/recipes, exclusive contracts and or a healthy database. Brands & Databases create BIG VALUE. That’s why Facebook paid billions for Instagram & Whatsapp and the Coke brand alone is worth BILLIONS.
5: PROFITS: Many owners have high revenues with very little to no profit. It’s imperative to manage cost, know your industry standard’s profit margins and work diligently on increasing your bottom line. It’s not about what you make, but what you keep that will entice buyers to pay you MORE.
6: PATRONS; Customers are the fuel to all businesses, without them we run out of gas! It’s imperative to maintain current clients while obtaining new ones. Buyers will NOT buy a business without a healthy customer base. Know your customer acquisition cost and run effective marketing campaigns in which to expand your brand. Roll out the RED CARPET and continue to provide WOW client experiences. It’s much more cost effective to keep happy customers than it is to find new ones.
ALWAYS, inspect what you expect so that you can protect what you do! Delegate to your team; Trust, but Verify. Follow up or risk the job falling through.