Do you have an EXIT PLAN for your business? How many “Baby Boomer” business owners wish they would have sold their company before the “Great Recession?”
This past year, I attended a seminar on Mergers and Acquisitions, to learn about the steps and processes for buying and selling businesses.
Most seminars, webinars, podcasts and books allow you a nugget of wisdom to take away, that will help you in your business and in your life. The nugget I got from the speaker of this Mergers and Acquisitions seminar was this: “The same day you acquire or start a business should be the same day you start preparing an EXIT PLAN.” That statement hit me right between the eyes!
I meant to build and grow my business, but I never thought I needed an EXIT PLAN. I assumed, if ever I wanted to sell or pass my business on to family, I would gather the information needed. I’d talk to my lawyer and accountant, and make it happen. It would be just another project.
Well, if I had been planning my eventual “EXIT Stage RIGHT,” I would have given more thought to INTANGIBLES. Thank God, due to our systematic approach to business, we had many intangibles in place. However, I am now more focused on them, and working more diligently on my EXIT PLAN, for when that day comes.
What are “Intangibles” for a business?
Simply stated, they’re those things that separate a business from other similar businesses. They’re things some would consider unimportant, but that a buyer would be looking for, when acquiring a business. Intangibles are what gives a company more value than the average same-size company in the same industry.
During the seminar we were given many examples of intangibles. The speaker then asked attendees to make a list of his or her company’s current intangibles.
Below is the list I made for OUR company:
- Great location in the city of Nashville, within blocks of FedEx and UPS.
- A building very suitable for our industry, and that can easily be expanded due to extra unused acreage.
- Less than five minutes from Nashville International Airport.
- Well-designed company websites that support instant quotes, and the placing of and paying for product orders online, any time of any day, with little input from CSRs.
- MIS software that has modules for job tracking, estimating, finished goods and inventory control, floor data collecting used for time tracking and productivity benchmarking, also custom reports for job costing, etc.
- A detailed written and online Operations Manual of how our business functions, to which employees have easy access.
- Quality Control Systems with instant benchmarking of waste, which is interfaced and posted instantly on large HD TV monitors located in various departments.
- HR online Systems… i.e. Request for Leave, Absent Tardy, etc.
- Repair and Maintenance Systems.
- Inventory Control Systems.
- Clean and clutter-free environment.
- Top drawer employees with low turnover.
- Customers are not doing business with our company due to MY (owner’s) relationship with them—meaning: a new owner would retain 99% of our clients, as long as the new owner maintained the quality and service control systems that are now in place.
Even I was impressed! I could list more, but I think you get the point. Due to our systematic approach, we have a great deal to offer someone, IF we were to sell our company. However, just like many companies, we were hurt badly by the Great Recession. But, due to our systems, we maintained quality and service all the way… and we’re moving forward.
So, what’s EXIT Stage LEFT?
Let’s put it this way… THIS type of business is one that functions poorly when the owner is NOT on-site walking the floor ensuring operations are running smoothly. It’s a company that’s quality and service relies strictly on what I call a ” System of Apology, one with POOR SYSTEMS for operations. This type of company is worth little without the owner being constantly hands-on, and most of its value is determined by how good the economy is doing.
An EXIT Stage LEFT business was not a pretty site for many Boomers who lost heavily during the Great Recession. The worth of those companies bottomed out, with little or no intangibles.
It didn’t have to be that way? It still doesn’t! So, which way will you EXIT… Stage Left, or Stage RIGHT! We can help.
Did I mention? Great systems work!
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