During the life-cycle of building a Mother of a Business, it makes perfect sense to ask a number of provoking, asset-protection, risk-minimisation questions to get YOU, the Business Owner, thinking along the lines of Starting with the End in Mind TODAY, regardless of how old the Business is.
Taking such initiative is paramount for ALL Business Owners who seriously wants to successfully transition the Business while YOU are in the best position to do so. In most cases however, Business Owners will not have commenced the all-important discussion about what to do when the time has come to Finish Unfinished Business, to Exit, to essentially not run the Business any more, whether that be by choice or otherwise.
By thinking through all the elements of an Exit Plan, the payback will be delivered at the time of the plans execution. However prior to that, the benefits are in the proactive nature of the action taken, both in knowing that a plan is in place as well as being actively worked towards.
Where the Business Owner does not want to entertain this discussion at all when in a position to influence the Exit outcome, the Business Owner may instead think it will all sort itself out in the end. To some extent, this is correct. Ultimately, it will get sorted, but in the way YOU the Business Owner had envisaged? Possibly not.
So why is this so important?
In 2011, the state of the market is as follows:
•>1,000,000 Businesses in Australia are operated by 45 year-olds
•Meaning approx 1 in 2 Businesses will be looking to turn over in the next 5-10 years, either by choice or medical reasons
•Of that, > 300,000 are owned by Women
•The Business may be the 2nd largest, if not the largest asset owned, therefore it needs to be handled accordingly.
The following is a series of questions to help start your thinking…
In order for a Business Owner to Start with the End in Mind TODAY, what has to happen?
•Is a Succession Plan in place? If yes, how old is it?
If it had to be executed immediately, does it make sense?
Is it addressing what really needs to be addressed?
•If selling is an option, does the Business appeal to a Buyer in its current form? Is it set up to be able to “hand over” to a third party?
•Does the Business have an online presence? If not, why not?
•How are the Business records looking?
Does the reporting of the Business (e.g.: to the ATO) reflect its complete “value”?
•Alternatively, is now the prime time to acquire another business to help fill gaps, if that’s possible?
Where is the Business at right now vs. where does it want/intend to be?
•If the Business relies solely on YOU the Business Owner then the impact could be catastrophic if the Business Owner is no longer accessible. What steps need to be taken to reduce the risk/potential damage?
•If looking at a Buy option, will acquiring another Business get the Business there more quickly?
•Is there the option to do both ie build/acquire to grow and then Exit once all in place?
Based on where the Business is now, and what is wanted long-term, will determine the gaps to be filled.
When is the right time to execute?
•If selling, what asking price will be required when ready to execute?
•How far off is that, realistically?
PLUS, and equally as important…
•What will you as the current Business Owner do post Exit?
•What will be the implications for business/life partners?
•If the Business is your \”identity\”, what then?
How to Exit? There are a number of possible Exit options e.g.
•Just pack up and walk away!
•Or any variation on above
To make this happen, who needs to be involved? Does the Business Owner have access to the following specialists in Exit?
•Business Advocate (if acquiring)
•Have they considered who might be interested in buying the Business?
None of this has to be daunting! Setting YOU on the path of thinking about Starting with the End in Mind TODAY, regardless of how old the business is that a few of these questions will prompt may be enough.
However, if you’re serious about having this conversation, please contact me…
First published on Westpac Bank’s RubyConnection.com.au…
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