Entrepreneurs can have many reasons for wanting to launch and own a business, but typically "freedom" is a key motivating factor. And, when your business is sellable, not only do you enjoy increased freedom today, but also in the future when you realize more options for your eventual exit. You might decide to scale up and become an absentee owner, transfer the business to children or insiders, or sell to a third-party or ESOP. If you have a sellable business, you have tremendous freedom as an owner, both now and at exit.
John Warrillow, author of Built to Sell and The Automatic Customer, often describes what he refers to as "The Owner's Trap" and how so many business owners today "are stuck" in the trap with businesses that are not sellable. Basically, these owners have businesses that are far too dependent on them and they are not experiencing the freedom they signed up for. You can discover whether or not you're in "the owner's trap" by answering these questions:
- Does the business slow down when you're not there?
- Do customers come to you when something goes wrong?
- Has your revenue plateaued?
If you've answered "yes" to one or more of these questions, and you want to plan to escape the owner's trap, take steps now to implement the following strategy: First, assess the sellability and value drivers of your business, and then, once you've exposed reality, implement a plan to accelerate the value and sellability of your company. With increased sellability, you will enjoy much more freedom today and when you're ready to exit.