The Inevitable Exit

In this episode, Pete Mohr dives into a topic that's often pushed aside but is crucial for every business owner: the inevitable exit from your business. Whether it's selling, passing it down, or closing shop, Pete discusses why planning your exit now can save you headaches later and add value to your business today. He also shares insights from his experience as a business broker and coach, emphasizing the importance of being prepared for life's curveballs.

Here are a few things Pete covers:

• The reality that no one runs a business forever and why you need to prepare for your exit.
• How planning your exit can actually make your current business more valuable.
• The time it usually takes to prepare and sell a business.
• The importance of having systems and people in place for a smooth transition.
• How your end goal shapes your current business decisions.

It’s time to take action:
Start thinking about your exit strategy today. Whether you plan to sell, pass it on, or close shop, having a plan will give you peace of mind and make the transition smoother when the time comes. If you need help, book a free appointment with Pete at speaktopete.com.

Are you looking to make some changes in your business and your life in 2024?  Head over to speaktopete.com and book a chat with me to see if we're the right fit!

Transcript

Pete Mohr: 0:35

Hey there, folks, and welcome back to another episode of the business owner breakthrough. And today I thought I'd like to dive into a topic that's often pushed to the backburner, but it's pretty crucial for every business owner to consider. And we're talking about the inevitable exit from your business. Yep, you've heard me, right, we're talking about the exit of your business. Because one day, you're gonna either sell your business, pass it down to maybe a family member or friend, close it down, or let's face it, you may end up exiting due to unforeseen circumstances, like sickness, or maybe even death. Not a great subject to talk about all the time. But it's something as a business owner, you need to be prepared for and stick with me here, because we're going to go through a few things that I think are pretty important. Understanding this reality can now save you a lot of headaches later, and actually help you build a stronger, more valuable business right now, right today. First off, let's face it, no one runs a business forever. Even if you love what you do, there will come a time somewhere down the road when you have to step away, or when you want to step away. And that's okay. The key is to be prepared for that day. I've seen too many business owners ignore this reality, only to find themselves in a bind when life throws them a curveball. As a former business broker, you know, helping people buy and sell businesses, I can tell you that it usually takes around 18 to 24 months to prepare and sell a business. So if you're making all of the decisions in your business, it will not look very appealing to a potential new buyer or for somebody that needs to take over the business due to circumstances, they want to buy something that already has systems and people in place. That's what you'll get the most value for your business as well, you know, the closer you are to being removed from the day to day operational decision making in your business, the easier it will be for the transition to a new owner. Let's use the example of maybe a successful auto repair shop, business is booming, the owner is working hard, and she never thought about the exit strategy. And then out of the blue, she got sick, because she hadn't planned for getting sick, her business suffered. And eventually she had to sell it for way less than it was worth. Don't let that be you. Even if she didn't sell. It may have taken her years before rebuilding the relationships and trust and confidence that she had built with her community of clients before she had left the business for an extended period of time due to sickness, you know. So all of these things, although we don't want to talk about them necessarily, we do need to think about them occasionally and strategically plan for it. So what's the takeaway here, start thinking about your exit strategy. Now, whether you plan to sell, whether you plan to pass it on to a family member or even close shop, having a plan in place will give you the peace of mind and make the transition smoother when the time comes. Alright, moving on to the second point, aligning your wants and wishes. Remember, he got into business, we've talked about this a lot. You got into business because you had the dreams of a better future. And understanding how you're going to exit your business is letting you understand what your better future looks like down the road. And knowing what you want for your business, in the long run will help you make better decisions today. That full clarity that we talked about. Because clarity creates confidence and confidence ignites momentum in the things that you do. Are you looking to sell for a big payday down the road, or maybe just hold the business as an investment. That's kind of what I'm looking at doing. Because I've got good businesses that are running on rails, I don't necessarily need to sell them because I have the right process and people in place. So it's more of an investment. But it doesn't matter what I'm doing it matters what your vision of the future is, your end goal will shape how you run your business now. And if it isn't already start thinking about a lot of the work that I do as a business coach is around the transition of family businesses to the next generation. And there are a lot of unique intricacies around transitioning including the communication, accountability, and all of these things that need to be discussed in advance of the transition. So whether you're transitioning it to your kids, or whether you're transitioning it to a different owner, it's the same sort of thing, the ease of transition is going to make everything easier for you and for the next person. This is where the concept of the five P's really comes into play as well. You know, having clarity around the promise and aligning the product process and people to that promise so that you can garner the right amount of profit, right. And also the other one we've been talking about later is the CPA communication process and accountability in your business. When we have these sorts of things in place. It's a lot easier to transition to sell to hand it over to the kids you know mastering These skills will not only help you run a successful business today, it'll also help you set up for a successful exit down the line. Now that you've got your strategy in place, and you know what you want, but a plan is really just a piece of paper, or an idea maybe in your head until it's executed, and that's where the accountability comes in, right your people, you need to assign responsibility to the right people, in order to make sure your exit strategy can actually happen the way that you want it to. Think about it, if you're planning to sell, who's responsible for making sure the business is in top shape for valuation? If you're passing the business on to a family member, have you trained thematically? Are the processes in place? Have you started to align and assign accountability? If you're closing shop, who's handling the liquidation? What does that look like? These are questions that need answers. And those answers need owners, people who are accountable for making them happen down the line. Start by identifying key roles and responsibilities in your exit plan and then match them with the people in your organization. These could be your managers, maybe your CFO or even external consultants. The point is, someone has to own each part of the plan. Even if you're young and you feel that an exit is the years off, you should have a strategy around this in the event that you need to exit your business for whatever given reason. Once you've assigned accountability, the next step is training and empowerment, right? You can't just throw someone into the deep end and expect them to swim, they need the tools and knowledge to succeed. And this is where your leadership skills really come into play. You've got to train your team or your successor in the skills that they need to take over those accountabilities. I'm not just talking about the technical skills here, I'm talking about the soft skills like communication and decision making for the betterment and keeping the promise in alignment of everything so that your business carries on remember this EPA, right communication process and accountability, make sure they've got these down. Your job as a leader is to be their coach and guide not to make the decisions for them. Remember, decisions should be made at the lowest level of your organization. So set up the systems that make the transition smooth, whether it's a detailed operations manual, maybe a robust CRM system, videos, or a set of best practices, having systems in place will make it easier for the next person to step in and run the show. Right? Once your team is trained. Start gradually delegating those responsibilities. Don't wait until D Day, it's too late then to hand over the reins, test the waters, let them take the lead on smaller projects or decisions and see how they handle it. This gives you time to course correct, and them the opportunity to grow in their new roles. Right. We've covered a lot here today. But let's quickly recap some of the essentials. First, acknowledge that and exit is inevitable. It's not a matter of if but really a matter of when, right second, you want to align your wants and wishes with a solid strategy. And then know what you want for your business in the long run. And make the decisions today that will help you get there. And thirdly, you have to assign accountability, right? It's such a big piece. And such a major area where small small business owners lack is the transfer of accountability. A plan is just a plan until someone takes action. So we're talking about strategic planning here. But then the next step is to let them get some of the decision making done for you. Right, make sure you've got the right people in place to exit this exit strategy. And that goes along with all your professionals, your accountants and your lawyers, and your insurance companies, all these other things too, right? If you're serious about not just working in your business, but working on your business, then it's time to take the next step. Don't let another day go without thinking about your exit strategy don't have to give it a ton of thought if it's sort of far away, but you have to start thinking about it. Time waits for no one. And the sooner you start planning, the better off you'll be. So if you're a business owner looking to align your goals and set up a solid exit strategy, I'm here to help. You can head on over to speak to pete.com That's speak to pete.com book a free appointment with me and we'll see if we're right fit. You know, we'll dig deep into your business, align your goals and set you on a path for a successful exit if that's what you wish. And remember, somewhere down the road, you will have an exit and you're hoping it to be a success. Right. So before we wrap up, let me leave you with this side. Business Ownership is a journey. It's not a destination. And like any journey, it's filled with twists and turns. But if you plan well you can navigate those twists and turns like a pro and reach your desired destination. Whether it's selling your business for hefty profit, you know, maybe pass sing along to the next generation or closing up shop with peace of mind. Remember, you're not just building a business, you're building a legacy. And a well thought out exit strategy is a key part of that legacy. So if you've got questions or want personalized guidance, you know where to find me, that's WWW dot speak to pete.com. So thanks for tuning in. And until next time, keep breaking through those barriers and building the business you've always dreamed of. Now go and make it a great day

Buzz Burbank: 11:09

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