In a recent Inc. Magazine column Norm Brodsky wrote the following about what he tells entrepreneurs who come to him for advice:
“One, always build a business to last forever. Do what’s best for the business long term. And two, build the business so that it can be sold for as much money as possible – even if selling is not part of the plan.”
He also writes most business owners don’t follow this advice. No fooling! Eight years ago the Wall Street Journal had an article with the statistic, “10% of businesses are ready to sell (for maximum value).” True then and today.
The problem is time flies. Think about what you were doing 10 years ago. Doesn’t seem that long ago, does it? Now fast-forward 10 years, what will your business (or your clients’ businesses) look like? The right answer is, pretty much what they look like today. Sure, sales will be higher, but so will costs.
There are reasons why I did the video, “Everybody’s an Exit Planner.” Because from CFO groups to pay-for-a-designation operations to consultants desperate for work there are a lot of (supposed) experts on exit planning. And guess what, there’s a need for it. Not that most owners pay attention. Once something hits them or their business they get interested in selling and often it’s too late to do anything (other than hope someone will pay what it could be worth).
The more catastrophic the event the more urgency there is to sell and the more (good) planning the higher the price.
Someone recently asked me if, given the projected high number of baby-boomer owners selling there would be more sellers than buyers. I replied there will always be more buyers than sellers for good businesses. The question is, where will the line be drawn between good and lousy businesses? Owners, make sure you’re above the line.
“Maybe stories are just data with a soul.” Brene Brown