Are you ready to chase the rainbow?
photo by Rhett Maxwell
When was the last time you took a few minutes…or better yet a few hours and really thought through what you wanted to get out of your business and what your exit strategy might be? Have you looked at the end of the rainbow at all?
Even if you have no plans of selling or getting out in the foreseeable future, it’s still worthwhile to think about it in terms of someday…maybe 10 years, maybe 20 years…whatever that timeframe is, having a long term vision can only help you.
Anita Lieser – a broker with Apex Business Advisors just wrote a great article breaking down a very successful transaction. I don’t know any of the details behind this particular deal, but there are several critical things you can take away from the article as you think about the long term outcome of your business.
Whether you ultimately want to sell your business to a 3rd party, pass it down to your family, sell it to employees – Anita’s article points out things that all business owners should be targeting for current and future success:
1. Positive Cash Flow
As everyone knows, Cash is King, but it’s almost impossible to overstate how important a consistent, positive cash flow is to the success (and attractiveness) of your business. If you don’t have a positive cash flow, then you’re eating up your runway…and sooner or later the plane has to take off or you will crash, as simple as that.
If you’re not sure how well you’re doing – then it’s time RIGHT NOW to start with cash as your top priority. Figure out where you are and what you can do to maximize that cash flow as soon as possible. Not only will it make your business a lot more valuable to a potential buyer, it will take a lot of pressure and stress off of you as the owner right now!
2. Have a good picture of what’s going on
Related to point number one – you need to have clean and clear information about your business, starting with financials and including your top Key Performance Indicators (your numbers).
Not only will that help you run your business in the smartest and most strategic way, it will give you a very clear and valuable story to tell when you consider selling.
3. Be objective and get help
Another big take away from Anita’s article is the importance of having a clear and unbiased view of your business. Most business owners get very wrapped up and emotional about the business – understandable since they’ve likely worked long and hard to get it where it is. However you have to be able to look at the business the way a bank or a potential buyer would look at it.
The good news is that you can and should get outside help. Someone like a business coach if you’re trying to grow your business and a business broker when you’re considering selling it can not only give you expertise, they can also help you step back and see things from a different perspective (almost impossible to do on your own).
One of the absolute keys to having a really successful business – a business that works predictably, effortlessly and profitably every day is purposely creating it as if you were going to sell it to someone else (or franchise it) whether you are actually ready to sell it or not!
Have you thought about what’s at the end of your rainbow? Whether you are ready to sell or not – I’d recommend at least meeting with a business broker (I’d be happy to introduce you to the folks at Apex) or a business coach and figure out where you stand and what (if any) improvements you could make.
What are your thoughts on selling your business? How about building as if you were going to sell it? Share your thoughts in the comments below and let me know if I missed anything.
Shawn Kinkade Kansas City Business Coach