Sarah thought she had a great sell strategy in place until it all blew up at the deal table. She was willing to stay on for a year or two and “earn-out” a percentage of the sale price, but she was not willing to play the role of a lender in the self-financing part of the deal, and she absolutely expected an offer of a higher sale price.
In building her business, Sarah was open to the idea of delegating core responsibilities to others but instead remained central to sales and operations. She was also much more focused on reducing her personal income taxes each year rather than improving the financial performance that would be stated on business financials. Sarah’s learning now that those goals didn’t align with maximizing a sale price or sourcing the types of buyers who wouldn’t require self-financing. When she gave any thought to life after the business, she pictured an immediate exit and drinking umbrella drinks on a beach in the Caribbean. But Sarah now knows that she and her business are not positioned to realize her dreams. At least not now when she was hoping to leave. Her goals for building were not aligned with goals for exit and life after the business.
Life after the business goals can include things like financial security, time with the family, travel, health, and wellness, launching a new enterprise, or retirement on a beach in the Caribbean.
Exit goals can include maximizing sale value, minimizing taxes, gratitude for employees, family harmony, or a successful transfer to children.
Business goals can include growth and profitability, freedom, control, high income, building wealth and value, influence, or social impact.
To ensure success in your eventual exit it’s critical to continually examine your goals in each of these categories making sure they are aligned. It’s not unusual for an owner to be very disciplined and systematic in establishing and executing business goals, only to learn when it’s too late that those goals didn’t produce the exit they were hoping for. Whenever you set new goals for the business, ask yourself this question, “How do these goals for business growth align with my goals for exit and life after the business???”
In an effort to help business owners like Sarah be disciplined and systematic in doing this, we created our STRATEGY RENOVATION® Value Advisor engagement.
