Here are six actions to increase the value of your business and the likelihood you will realize that value if and when you sell it.

Your exit from the business will happen by design or by default. By taking the time to plan when, or how, you might like to leave the business you increase the likelihood that your plans will come to life. For example, you might prefer to work hard in the business until the day you sell it. Or, you might like to ease out of the business slowly, allowing a new management team to gradually take over. You might even decide you want to stay in the business until the day you are physically unable to perform any longer.
Whatever your desired future plans, be sure to let others know those plans and be sure to also put in place the mechanisms that will allow them to happen. Make sure you know how much money the company needs to generate—either by a sale or through a pension plan—to finance your retirement if necessary. By doing so, you’ll be prepared for the future and will have a company that can survive beyond your tenure.

Breathe Life Into Your Strategic plan
Only about 10% of business owners develop a strategic plan. In fact, most owners have a lot of plans and goals for the company but tend to walk around with those in their head.
Many leaders are concerned that writing their goals will mean they’re trapped into a course of action that really needs to be more nimble to adjust to a dynamic market. Some worry others may judge their ideas or be critical or skeptical about the practicality of the plan.
Those who take the time to write out their ideas, share them with key managers and, finally, cascade the plan down through the organization, are far more likely to achieve their goals. In addition, a short, simple written plan helps everyone in the company understand where the business is going, what the priorities are and how the company plans to achieve them.
In this way, more people can pull together to work toward the agreed vision. Unfortunately, even those companies who take the time to write a plan rarely use it. The reality is most of these plans simply become “shelf documents,” gathering dust and creating guilt on the part of the developers. Or worse, the company has paid an expensive consultant to create a document that never sees the light of day.
A strategic plan should be a living document with a solid foundation in the form of a clear vision for the future and short list of the core values that drive decision-making in the company. Then, leaders who wish to focus on results will identify a few broad goals. These are statements of desired direction—key areas in which you want to experience performance and change. They need not be measurable but should lend themselves easily to objective setting. Goals rarely change and may succeed from one planning era to the next.
To support those goals and move to action, develop specific, measurable objectives.
They should meet the S.M.A.R.T. criteria:
Specific: They are tangible outcomes and real activities. For example, to increase the number of first time customers who become repeat customers by 50% in one year.
Measurable: Can we tell if it has been accomplished?
Achievable: Can we really do it?
Realistic: Should we really do it?
Time bound: When could we expect to see results or measure the results?
Finally, break the objectives down into manageable steps or tasks and be clear about your priorities—what is urgent and where will you see the biggest return for your investment?
It’s important to keep the plan alive in the eyes of your managers and supervisors as well as the rest of the company. Sharing the plan widely can be a little daunting, and yet it’s important to let team members know what it is, how it drives behavior and what their roles are in achieving the company’s goals.
You might consider holding regular meetings in which the plan is the key topic of discussion. Once an objective is met, set a new one.
A step-by-step process could include:
1. Share the plan with small groups of employees and briefly explain the process senior management went through to produce it.
2. Explain why the values are important and why senior management wants the values to become part of the culture.
3. Explain that goals are directional and big picture and may rarely change, while objectives are specific and measureable and may change when accomplished.
4. Stress this is a living document and will be updated regularly to meet the needs of customers and the company.
5. Explain how the senior management team is holding itself accountable against the plan.
6. Offer to answer any questions. Be prepared to answer questions regarding “what’s this got to do with me?” and let them know as the senior management team becomes more comfortable with the planning process and issues of accountability, more team members will be involved in updating the document.
Finally, monitor, measure and motivate. Update and review the plan at least quarterly. Encourage the use of the plan in all areas of business. This plan has impacts for all areas of the business. Make sure it’s seen as important, influential and positive.

Once you know how much money the company needs to generate to support your future, you’ll need to make sure it is in the best shape possible to achieve those financial goals. A strategic plan (see sidebar, “Breathe Life Into Your Strategic Plan”) is a simple document that outlines how you will grow the company and meet the goals necessary to create profitability, increase your market share and develop a strong team to support these efforts. The strategic planning process adds credibility and viability to your future plans. It provides the necessary reality check: Can the business actually provide you and your family with the means you need? If not, what changes do you need to make to your exit strategy?

If you are considering selling your business but you are still the key rainmaker, innovator, salesperson and problem-solver, you are lowering the value of your company. Smart business owners focus on developing a strong management team that can eventually replace them. This management team needs to share the vision, understand the goals and become an integral part in the growth and success of the business. In the end, the business should be able to thrive whether or not the owner is still active in it.

Potential buyers often look for businesses that are both profitable and relatively easy to run. If they have to come into the business and make a lot of improvements, learn how to be able to run the operation through trial and error and rely heavily on institutional knowledge that is not currently documented, they will be less likely to pay the asking price. If you want to make your business look more attractive to a potential owner, make it easy for them to be successful!

A wise prospective buyer will engage in a serious process of due diligence. Make sure there are no surprises. Have at least three to five years of solid financial information that really tells the story of your success. Include your budgets with variance, your profit and loss and balance sheets, along with your tax returns. Show a solid trajectory of growth, and be prepared to explain any anomalies. Also, be honest and transparent. If trust is broken during the process, this will be used to negotiate a lower selling price—if any negotiation happens at all.

What sets you apart from your competition? How can you communicate what is truly special about your business? A useful, easy-to-read prospectus will tell a prospective buyer what the vision for the company is, describe how the value in the business has been created, and how it will be maintained. It will highlight the success of previous strategic plans, the strength of the management team, the experience of the employees and the unique features of your products and services. It will clearly paint the picture for a prospective buyer of the benefits they can expect to reap as a result of investing in this business.
Remember, your exit from your business will happen by design or default. Planning ahead ensures it happens by design and that you reap the rewards of a lifetime of dedication and hard work.

Lisë Stewart is founder and director of Galliard Group, a training and consulting firm specializing in family-owned and closely held businesses. She is a nationally recognized author and speaker who draws on her 25+ years of experience to share practical advice for ensuring sustainability of family businesses.Contact her at LStewart@GalliardGroup.com.


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