Your business and your eventual exit are not like a horse race, are they? The horse that wins by a nose wins five, ten or more times as much money as the horse that loses by a nose. It’s pretty much all or nothing.
When it comes to exiting your business there is no such thing as winning by a nose (and getting ten times as much). You get what (a buyer perceives) it’s worth and you can increase that value by addressing some key areas. You don’t get 10 times as much by increasing 10 things by 10%. You vigorously accelerate the value of your business by improving 5-10 things by 80% or more – so you, and your buyer, see dynamic results. This does not happen overnight.
More importantly, you avoid decreasing your businesses value by not addressing key areas. In my upcoming book, “If They Can Sell Pet Rocks Why Can’t You Sell Your Business (For What You Want)?” I cover a long list of value drivers. In future memos I’ll cover many of them.
What I can tell you now is that failure to address these areas causes your business to gather mold like that old piece of cheese that gets hidden in the back of your refrigerator. These negative factors don’t show up tomorrow, they often take a few years to manifest themselves. Just like it takes a few weeks, not a few days, for that cheese to go moldy.
“Finishing second in the Olympics gets you silver. Finishing second in politics gets you oblivion.” Richard Nixon