Transitions Digest

By Chuck Chrissis, The Growth Coach®

Equally important to thinking and acting like a CEO is the opportunity to become a sculptor of your business. Make time to craft and mold your business so it will run more effectively and deliver more consistent results. Actively shape and re-shape it to make operations smoother and more efficient. Turn chaos and confusion into order and discipline. Rising customer satisfaction and more predictable profits will follow. It’s time to standardize and document your business.

Challenge old beliefs about how your business should work. It’s never too early or too late to shape or re-shape your business. It doesn’t matter if your business is 20 years old, 2 years old, or still on the drawing board. Begin to mold the company to run without you being woven into its very fabric. Design it to run without you supplying all the energy and effort. You can’t control everything and everyone, nor should you. In short, behave like a strategic business owner. Let go!

Do this by creating more than simply a job for yourself. The ultimate goal of starting a business is to sell it one day at the highest possible premium to your employees, family members, or an outside buyer. You deserve an acceptable return on your time, talent, and capital.

No matter the size, age, or industry, every business should be prepared to be sold. Yours is no different. This “start with the end in mind” strategy should help focus you on building an effective business model that doesn’t have you at the center of its universe and doesn’t rely on your presence, personality, and perspiration for its success. In other words, you should not be the business and the business should not be you. This work-in-reverse approach not only maximizes your selling price, but minimizes the challenges and headaches while you own and run the business.

As mentioned earlier, your goal is to design and re-design your business to work without you. Your business model should be sculpted in such a way that it can be replicated easily and often in cities across the country and around the world. All that’s necessary is your vision, not your physical presence and exertion. Whether you intend to expand or not, such a goal will help focus you on building a systems-dependent, not owner dependent business that will generate repeatable performance and consistent results.  And you must get others to help. Without them you don’t run a business – you work a job.

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What is an effective business system? It is simply an integrated web of separate processes, procedures, and policies. A business system is your documented instruction manual for “this is what we do, and how we do it” at our company. A business system allows you to get consistent results through other people. What tremendous leverage and freedom that can give you!

Some typical operating processes are:

• Selling
• Marketing
• Manufacturing
• Inventory Management
• Order Processing and Fulfillment
• Customer Service
• Billing and Accounts Receivable
• Procurement and Accounts Payable
• Facilities Management
• Accounting and Finance
• Human Resources
• Information Systems

With such processes fully identified and explained, your employees will deliver amazing consistency by minimizing employee discretion. Such a system will also free you from having to touch every transaction, make every decision, answer every question, and solve every problem. You can manage by exception! Such a carefully crafted approach affords you breathing room to think and behave like a strategic business owner. You will also have time for the personal activities that matter most to you.

Without a business system in place, it’s unlikely you will be able to obtain a premium price for your business. A potential buyer may be unwilling to invest in an enterprise that is dependent solely on you for its day-to-day operations and survival. If it’s obvious that you are held hostage to your business, you may not realistically expect to achieve a sale price you find acceptable. If it’s obvious the business is systems-deficient, then it’s unlikely an objective third party will offer you a price that reflects the time and effort you have put into your business. Rather, emotion, not reason will come to rule the transaction and may very well derail it.

To maximize your company’s eventual selling price, realize that buyers want to acquire a smoothly-running, money-generating machine. They want to purchase a business system that runs on near autopilot. They want to buy a fully documented and organized business system that gets predictable results. They desire an asset with a proven track record, predictable revenue stream, and growth potential. Give them this by first taking the opportunity to step back, let go, and become a sculptor of your business.

 Let us know your insights by commenting on our blog post below.  

By Chuck Chrissis
The Growth Coach®

Subsequent issues of The Exit Planning Digest discuss all aspects of Exit Planning. The provider of this Newsletter (Holly A. Magister, CPA, CFP®) offers you unbiased information about what you may need to know. Subscribe to our free Exit Planning educational newsletter to learn more about how to grow and/or plan for your business exit.

Posted on October 29th, 2009 under Building Value, Business Growth, Entrepreneurship, Exit Planning Digest. Tags: business processes, coaching, Exit Planning, exit strategies, process of selling a business. Comments: None

By Donna Billings, PCC and Jane Patterson, CPPC

You’ve decided it’s time to sell the business. You have an offer. Your advisors are telling you it’s a fair price.  But something is holding you back. 

It’s not unusual for a business owner to come to the brink of sale and then pull back, believing that a better offer is just around the corner.  You ask yourself, “What’s the hurry?” But we know this can be dangerous thinking because for each company there is a time and season to sell when the maximum market value of the company has been reached.  Prospective buyers lose interest because they’re not convinced that a deal is possible.  And, morale and productivity are affected when employees are placed in and out of uncertainty.

At Enterprise Transitions, we recognize that the sale of your business is a significant decision with consequences for yourself and your family, employees and customers. Our team of financial and legal experts works with you to assess when the time is right to sell and evaluates and negotiates offers to ensure the best price.  We also recognize that there are other, non financial, aspects that you are considering, such as:

• What are your goals for the future, personally and professionally? Is it time to retire, and if so, what might retirement look like for you?
• How will you transition from your role as business owner to what’s next? 
• What about your employees?  How can you help them transition to new ownership?

These are legitimate and important questions for all business owners. So we offer a team of professionally trained and experienced executive coaches to help our clients explore these and many other related issues.

What is coaching? Coaching is a partnership designed to help you achieve professional and personal goals which, in turn, enhances your effectiveness and quality of life. Coaches are trained to listen, to observe and to provide support.  A coach may share experience, expertise and information. Primarily a coach asks powerful questions and guides their clients to confront situations, solve problems and make decisions.  Although our coaches have a great empathy for and understanding of human behavior, coaching is not therapy.

How can you benefit from coaching? The Wall Street Journal reported that more than 60 percent of executives at Fortune 500 companies now work or have worked with an executive coach. Studies show that more than 93% of executives who have received coaching would recommend it to others, realizing an average ROI of 5.7 times. The coaches affiliated with Enterprise Transitions are highly trained professionals with extensive leadership and business experience in strategic planning, career transition, organization development and more. Importantly, each of our coaches is an entrepreneur themselves, running a successful coaching business.

Your company has been your life for many years.  You and your family have sacrificed. You’ve built a good business and stuck with it through thick and thin. You’ve built a reputation by making tough decisions.  You’re proud. And you should be. If something is holding you back from the decision to sell your business, price might not be the only issue. Contact us to arrange for a confidential session with an executive coach to explore more fully the next step.

(This is the first of a three part series which will explore the benefits of executive coaching for business owners during the emerging, acquisition, exit planning and/or business sale stages.)

Posted on August 25th, 2008 under Uncategorized. Tags: acquisition, business sale stages, coaching, emerging, Exit Planning, facing retirement, family business, how to retire, planning for retirement, process of selling a business, process of selling a family business, retire, retirement, retiring, selling a business, selling a family business, selling business, thinking of selling business, when to sell a business. Comments: 1

By Donna Billings, PCC and Jane Patterson, CPPC 

You did it! After endless hours negotiating, you finally got “The Number” - the amount of money you consider a fair price for your business.  When the sale closes you’ll have enough for the kind of retirement life you’ve been waiting for:  Freedom. Security. Quality of life.

But something is holding you back.  Money isn’t the issue.  And you know the company will be in capable hands. Even your family is behind you 100%. You hate to admit it, but what’s most on your mind is, “What will I do if I retire?”

You’re not alone.  We’ve heard that question from many clients, especially an entrepreneur who has invested his/her entire life running his/her own company.  On one hand, the good news is that people are retiring earlier than ever (age 58 today, which is down from age 65 in 1990) and living longer (women age 84 and men 81). The bad news is that a recent study revealed that 81% of retirees feel they should have planned better for what they would do in retirement.

One client characterized her first year of retirement as “a roller coaster ride of ups and downs, great times and wasted time.” For many, this is the first opportunity in a long time to make meaningful choices about the future. But choosing can be difficult because there are tough questions to face: “What really matters to me? Who is important to me? What do I really want to do with the time that’s left in my life?”

To plan or not to plan, that seems to be the question.  Yet, it’s somewhat of a Catch 22, isn’t it? You shouldn’t retire until you know what you want to do but you don’t know what you want to do until you retire! For one entrepreneur, retirement without knowing exactly where, what and how he/she will spend his/her time is out of the question. For another, he/she can’t wait to simply live in the moment.

What do we think about retirement planning?  At Enterprise Transitions, we know that each client has a unique personality and circumstances. We simply don’t believe there is just one right way to retire. Our executive coaches work with a client (and often family members) to design a retirement lifestyle that meets the client’s particular needs and goals.

We know that the only mistake you can make in retirement is to try to do it like someone else. You’ve earned the chance to live life your way and by working with an experienced executive coach, you’ll explore how you make the most of this next stage of life. You’ve earned it!

(This is the second of a three part series exploring the personal impact on business owners during the emerging, acquisition, exit planning and/or business sale stages.  Executive coaches Donna Billings and Jane Patterson, are available for a private consultation to discuss your retirement transition.)

Posted on August 25th, 2008 under Uncategorized. Tags: acquisition, business sale stages, coaching, emerging, Exit Planning, facing retirement, family business, how to retire, planning for retirement, process of selling a business, process of selling a family business, retire, retirement, retiring, selling a business, selling a family business, selling business, thinking of selling business, when to sell a business. Comments: None