Here is the STEP to take ...To Avoid the "Dismal Ds"!
And dramatically increase the value of your business!
Did you know that?
- Less than 50% of business owners know the value of their business
- Less than 5% of business owners have a system in place to measure and manage business value
- Less than 1% of business owners develop and execute a plan to reduce risks during an untimely transfer of ownership
- Few businesses reach their full potential and few owners successfully fill their ‘retirement funding gap'
And that...only 1 of 3 businesses up for sale are ever sold!
These are terrible statistics!
It is not … nor should it be a SECRET that the Dismal Ds...Disability, Divorce, Death, Business Distress...can all too often cause a very costly, unplanned and untimely transfer of business ownership! Let's take a quick look at these four potential developments that everyone may encounter during their business ownership tenure.
Disability: Unfortunately, we are all just a car wreck or some other health issue away from being temporarily or permanently disabled. This can happen to you or to a key member of your business team. Such an occurrence can set back or stall required business progress to a point where recovery is difficult or impossible.
Divorce: One of the most difficult things to learn is that you have a partner in your business that owns half of what you think you now own. Navigating through the implications of this unexpected revelation can all too often lead to doom within a business. Early planning can help assure that the business entity survives the distractions and divisions in this personal situation.
Death: Fortunately, we rarely dwell on the fact that such a reality exists for all of us. This ‘protective-thinking process' makes it difficult to address the planning that is essential to chart a path for the business and your family without you. However, if you do not do it…someone else (maybe the government) will. There are some simple steps you can take to address this potentiality.
Business Distress: We all know that there are business cycles in all industries and unplanned changes can have a big impact on a business. The needed action is to reduce the risks of the devastating results from such situations.
Failure to address the Dismal Ds can have a material effect on your wealth and the future of your business.
One of the best ways to truly get yourself engaged so as to address and go beyond the problems posed by the "Dismal D's" is to learn an important SECRET.
There is a clear way to consistently reduce your risks and to reach your operating business goals, though this notion seems to be a secret. This method involves simply planning early to position your business for a successful ownership transfer...at your price and on your time table.
The steps you need to take to ensure you and your business are ‘ready' for an eventual ownership transfer are exactly the same steps you should be taking to improve your business today…and to…avoid the Dismal Ds!
It is really all about READINESS. Though this word is not often used in business, it is vital to address it if you care about your business, your family and yourself.
Reduce Risks…Save TIME...and make more MONEY today...and secure your future!
Do You Know: What drives VALUE CREATION and VALUE PRESERVATION?
Every top professional business acquirer makes a thorough assessment of the target company's management strengths and depth. This is one of many key elements in early M & A analysis. Similarly, the diversification of customers and critical vendors is important to these highly successful buyers (customer and vendor concentration increases risks and thereby reduces the price of the business. This is one of the many business attributes that can have a positive or negative impact on the ‘saleability' of a business).
Diversification of both customers and vendors helps sell a business. Proven management teams in place help sell a business. Repeatable and established systems help sell a business. Available ‘production' capacity, low capital requirements, and low operating leverage all contribute to a successful sale.
But, what really sells is: Superior revenue growth and Consistent strong cash flow growth! (especially if cash flow growth is > revenue growth).
These are all the same business elements that, when properly put into place, directly improve annual operating performance. These ‘business assets' make it more profitable and more fun to run your business each and every day! This increased ‘salability' comes from direct action to ‘ready' the business for an ownership transfer.
Do not delay in addressing the real issues!
Action is required to avoid problems.
As the great, great philosopher Yogi once said:
"If you wait until it is too late... IT IS...TOO LATE!"
No traditional business budget and related planning processes can do this as well as utilizing a comprehensive approach. This specific focus on what is really required to properly plan for an eventual ownership transfer makes a huge difference.
The ‘annual business planning' done by owners currently is important, but it often lacks the assessments and analysis that lead to consistent value growth. It is the understanding of ‘what sells'...and ‘how to reduce risks' integrated into the ‘exit plan' that highlights the drivers required to enhance value. This early work results in big, big dividends...while reducing the potential impact of the "Dismal D's".
Plan Now ... So, you can: Sell Your Business at the Right Time and at the Right Price...without any Regrets!
Such planning may sound complex... However, it does not have to be that way. It does take some focused actions, but these steps will be the most important work you can do for your business, for your family, and for yourself. As the Japanese proverb says, “a vision without action is nothing but a daydream, and taking action without a vision can become a nightmare!”
Use this SECRET: To plan and operate your business today by incorporating all the things that are essential in an ownership transition. Do it right now!
That long planning process provides you and your management team with the knowledge of what to do to improve the business and to steadily increase its value over time. It is the integration of strategic planning, annual business planning, financial planning, and estate planning that makes the difference (It is a ‘find the gaps' and ‘fill in the gaps' process). This planning will open your eyes and expand your thinking so that you can grow your business and reduce risks.
Have you ever heard the statement: What Gets Measured...Gets Done!
If not, think about it. It is so true...and the key to value enhancement.
It has been my experience when working with hundreds of business owners that all too few do this critical planning and value measurement. Owners all too often see these actions as something that can be deferred (they are not!). Owners may see the process as time-consuming and too complex (it really is not!). Owners may see it as expensive to engage a team of professional advisors (there are some near-term costs, but they are almost nothing compared to the costs of lost opportunities, increased business risks, and the potential loss of business value).
It was seeing this situation over and over that prompted me to write my #1 best-selling book: When is the Right Time to Sell My Business?
I wrote it for business owners to help them start and complete an effective ownership transition plan...and to take action....by executing the plan. The few, who are astute enough and disciplined enough to do this, are amazed at the measurable impact it has on their personal wealth and sense of well-being.
This is a book written specifically for business owners to help them address the need for “readiness”.
Here is what one highly experienced investment banker recently said: "I can't remember the last time I recommended a book, but today, I feel compelled to tell business owners about an excellent one titled: ‘When is the Right Time to Sell My Business?'
"This book not only helps you decide when to sell your business, but it also helps you understand its value from the perspective of willing buyers, increase its value and marketability, and choose and plan your best exit option. If you are a private business owner, following the recommendations in this book will help you sell your business for more money, on your terms and time-frame, and without regrets.
Expect a great return on the time you'll invest in reading this book. Mr. Mowrey presents a sensible and proven approach to selling a business. It's a quick read that covers a lot of important ground at just the right depth for busy business owners, and it's one that I suspect you'll take notes on and refer back to as you approach your exit. Mr. Mowrey pours a tremendous amount of valuable insights and sound recommendations into 188 pages."
This book can only achieve its purpose ...which is, to help you, the business owner, in this critical area...if you read it.
So, I am going to make it easy for you to start reading it now. Get your copy today, along with a valuable and special bonus for less than the price of a fancy cup of coffee (the audio version is also available at Amazon).
It will definitely benefit you if you read this book and then act on your newly acquired knowledge. Don't wait! I just want you to find the right path to increase your wealth with the power of your business.
An owner of a unique psychology business focused on law enforcement made the following quote after reading this book:
"I should have read this years ago. I especially found Chapter 5 very, very thought-provoking. Thank you very much for writing this book."
My over forty years of experience as a hands-on business owner and business valuation and ownership transition advisor makes me confident that the planning approach found in this book, when properly applied, can potentially multiply the value of your business many times over!
If you do not have a lot of YES answers, it is time to take ACTION!
Start with these steps:
- Audit and analyze where you are (Too few do this!)
- Establish written plans and goals (Less than 5% do this!)
- Execute plans to achieve goals (Only 1% actually do this!)
This is a find the GAPS … and fill the GAPS process!
To start on your new path, please do three things NOW!
- “Use” the Business Owner's Transition Assessment in the STARTING CHECKLIST section of the MergerMentor.com website, then take the actions indicated.
- Read the book and plan to move your business and yourself consistently towards a position of: Readiness … for a planned or unplanned transfer.
- Access the extensive library of information at: www.MergerMentor.com
Then watch for new videos and educational information...coming soon...in the BreakOut Business Owner Series to help you identify and improve all of the key ‘readiness' factors.
Best to you on your journey,
RICHARD MOWREY