Statistically speaking, business owners and entrepreneurs rarely think about their exit, as demonstrated by the fact that only 47% of business owners have an exit strategy and plan.
Which is forgivable. No judgment here. I know first-hand how hard it can be to keep the plane in the air (the business operating) without worrying if you've got sufficient landing gear and an available runway.
Most business owners don't even have an available, fully trained co-pilot who can take over the controls when you, the business owner, need a break.
It is an obvious trap. A business that can't operate without you (the business owner), is a business that controls you, and statistically speaking, if you're the kind of person who has taken the leap, left the safety of full-time employment, you're the kind of person who also values freedom and flexibility.
Ask yourself, do you currently have freedom and flexibility?
So let's say you're not considering selling your business in the next few years (that's great). Generally speaking, it takes business owners 3 years to get their business into a position where they can sell it and then another 24 months to sell the business.
Do you know what you will be doing 5 years from now?
The solution is to turn your business into an Asset.
To be considered an asset, a business must be:
Think of it like this; your house is an asset:
Even if you're living in your dream family home and never want to move out, your house still has a market value that you can leverage to retire, borrow against and leave to your family.
The same is true for a business set up as an Asset.
So the short answer to "why you should prepare to sell your business even if you're not looking to sell" is that preparing to sell your business means turning it into an asset.
You have many more options and flexibility when your business is an asset.
As we discussed, freedom and flexibility are probably why you got into business in the first place.
When you turn your business into an asset, you, the business owner, have more options.
Remember, if you're unprepared, it can take up to 5 years from deciding to sell your business to be able to sell it. You can significantly cut down that lead time by preparing your business now.
Scaling a business without solid foundations is risky, stressful and requires significant cash. Instead, set up the systems and processes now, so the company can grow without the owner becoming a stressed-out bottleneck to growth.
Selling your business and bringing investment into your business are 2 distinct but highly related activities. In the end, potential investors are looking for an asset to invest in that will provide them with stable long-term returns.
I think of this as renting out your business. You are still technically the owner, but you've invited others to come and live in your house. To franchise, you need to package up and systematise your business so it can be successfully operated by someone else.
Often overlooked, a business that solely relies on its owner to operate is a business that doesn't have a generous leave policy, at least for its owner. Don't regret never making it to Italy while you're young or missing your kid's first day of school.
In business, you will always be reactive and never proactive if you can't get to the end of the urgent tasks to work on some important and more meaningful tasks.
Make your own luck. Opportunities come along all the time, but if you are too busy to notice them or take advantage of them, you will miss those moments for professional and personal growth that convert the 5-year grind into 'overnight' success stories.
Let's be honest, why did you start your company in the first place? Was it to be freer and have more options and the autonomy to do what you want?
If so, you went into business to build a business, not to run one.
Get started with Impact Builder, the leading platform for building valuable Impact Positive businesses.
Book a call with Ben Le Ralph, Founder of Impact Positive and serial entrepreneur, to discuss how you can leverage business ops & strategy maximise the value of your business.