September 26, 2023 • 11 mins
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!
Maximize Your Business’s Value with the Value Builder Assessment!
As a business owner, do you know what your company is truly worth? The Value Builder Assessment is a powerful tool that helps you uncover the key factors influencing your business’s value. Whether you're considering a sale, planning for the future, or simply want to grow, this assessment offers actionable insights to increase your business’s worth and appeal to potential buyers.
Don’t leave your business’s future to chance. Click here to take the Value Builder Assessment and start building a more valuable, resilient business today!
Book a no charge Freedom Call with Pete, to see if you’re a good fit for his business coaching or talk to Pete about speaking at your next event head over to http://speaktopete.com to find a time that works for you!
Pete's Websites:
Pete-Mohr.com
The Exit Ready Business
Kolbe Coach
Simplifying Entrepreneurship
LinkedIn at https://www.linkedin.com/in/petemohr/
Instagram at ...
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Pete Mohr (00:03):
Hey there, folks, and welcome back to another episode
of the business ownerbreakthrough. And today I
thought I'd like to dive into atopic that's often pushed to the
backburner, but it's prettycrucial for every business owner
to consider. And we're talkingabout the inevitable exit from
your business. Yep, you've heardme, right, we're talking about
(00:24):
the exit of your business.
Because one day, you're gonnaeither sell your business, pass
it down to maybe a family memberor friend, close it down, or
let's face it, you may end upexiting due to unforeseen
circumstances, like sickness, ormaybe even death. Not a great
subject to talk about all thetime. But it's something as a
business owner, you need to beprepared for and stick with me
(00:45):
here, because we're going to gothrough a few things that I
think are pretty important.
Understanding this reality cannow save you a lot of headaches
later, and actually help youbuild a stronger, more valuable
business right now, right today.
First off, let's face it, no oneruns a business forever. Even if
you love what you do, there willcome a time somewhere down the
(01:08):
road when you have to step away,or when you want to step away.
And that's okay. The key is tobe prepared for that day. I've
seen too many business ownersignore this reality, only to
find themselves in a bind whenlife throws them a curveball. As
a former business broker, youknow, helping people buy and
sell businesses, I can tell youthat it usually takes around 18
(01:30):
to 24 months to prepare and sella business. So if you're making
all of the decisions in yourbusiness, it will not look very
appealing to a potential newbuyer or for somebody that needs
to take over the business due tocircumstances, they want to buy
something that already hassystems and people in place.
That's what you'll get the mostvalue for your business as well,
(01:52):
you know, the closer you are tobeing removed from the day to
day operational decision makingin your business, the easier it
will be for the transition to anew owner. Let's use the example
of maybe a successful autorepair shop, business is
booming, the owner is workinghard, and she never thought
about the exit strategy. Andthen out of the blue, she got
(02:14):
sick, because she hadn't plannedfor getting sick, her business
suffered. And eventually she hadto sell it for way less than it
was worth. Don't let that beyou. Even if she didn't sell. It
may have taken her years beforerebuilding the relationships and
trust and confidence that shehad built with her community of
(02:34):
clients before she had left thebusiness for an extended period
of time due to sickness, youknow. So all of these things,
although we don't want to talkabout them necessarily, we do
need to think about themoccasionally and strategically
plan for it. So what's thetakeaway here, start thinking
about your exit strategy. Now,whether you plan to sell,
whether you plan to pass it onto a family member or even close
(02:56):
shop, having a plan in placewill give you the peace of mind
and make the transition smootherwhen 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 becauseyou had the dreams of a better
future. And understanding howyou're going to exit your
(03:18):
business is letting youunderstand what your better
future looks like down the road.
And knowing what you want foryour business, in the long run
will help you make betterdecisions today. That full
clarity that we talked about.
Because clarity createsconfidence and confidence
ignites momentum in the thingsthat you do. Are you looking to
sell for a big payday down theroad, or maybe just hold the
business as an investment.
(03:41):
That's kind of what I'm lookingat doing. Because I've got good
businesses that are running onrails, I don't necessarily need
to sell them because I have theright process and people in
place. So it's more of aninvestment. But it doesn't
matter what I'm doing it matterswhat your vision of the future
is, your end goal will shape howyou run your business now. And
(04:01):
if it isn't already startthinking about a lot of the work
that I do as a business coach isaround the transition of family
businesses to the nextgeneration. And there are a lot
of unique intricacies aroundtransitioning including the
communication, accountability,and all of these things that
need to be discussed in advanceof the transition. So whether
(04:22):
you're transitioning it to yourkids, or whether you're
transitioning it to a differentowner, it's the same sort of
thing, the ease of transition isgoing to make everything easier
for you and for the next person.
This is where the concept of thefive P's really comes into play
as well. You know, havingclarity around the promise and
aligning the product process andpeople to that promise so that
you can garner the right amountof profit, right. And also the
(04:43):
other one we've been talkingabout later is the CPA
communication process andaccountability in your business.
When we have these sorts ofthings in place. It's a lot
easier to transition to sell tohand it over to the kids you
know mastering These skills willnot only help you run a
successful business today, it'llalso help you set up for a
successful exit down the line.
(05:08):
Now that you've got yourstrategy in place, and you know
what you want, but a plan isreally just a piece of paper, or
an idea maybe in your head untilit's executed, and that's where
the accountability comes in,right your people, you need to
assign responsibility to theright people, in order to make
sure your exit strategy canactually happen the way that you
(05:28):
want it to. Think about it, ifyou're planning to sell, who's
responsible for making sure thebusiness is in top shape for
valuation? If you're passing thebusiness on to a family member,
have you trained thematically?
Are the processes in place? Haveyou started to align and assign
accountability? If you'reclosing shop, who's handling the
liquidation? What does that looklike? These are questions that
(05:49):
need answers. And those answersneed owners, people who are
accountable for making themhappen down the line. Start by
identifying key roles andresponsibilities in your exit
plan and then match them withthe 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
(06:09):
the plan. Even if you're youngand you feel that an exit is the
years off, you should have astrategy around this in the
event that you need to exit yourbusiness for whatever given
reason. Once you've assignedaccountability, the next step is
training and empowerment, right?
You can't just throw someoneinto the deep end and expect
(06:31):
them to swim, they need thetools and knowledge to succeed.
And this is where yourleadership skills really come
into play. You've got to trainyour team or your successor in
the skills that they need totake over those
accountabilities. I'm not justtalking about the technical
skills here, I'm talking aboutthe soft skills like
communication and decisionmaking for the betterment and
(06:53):
keeping the promise in alignmentof everything so that your
business carries on rememberthis EPA, right communication
process and accountability, makesure they've got these down.
Your job as a leader is to betheir coach and guide not to
make the decisions for them.
Remember, decisions should bemade at the lowest level of your
organization. So set up thesystems that make the transition
(07:15):
smooth, whether it's a detailedoperations manual, maybe a
robust CRM system, videos, or aset of best practices, having
systems in place will make iteasier for the next person to
step in and run the show. Right?
Once your team is trained. Startgradually delegating those
responsibilities. Don't waituntil D Day, it's too late then
(07:38):
to hand over the reins, test thewaters, let them take the lead
on smaller projects or decisionsand see how they handle it. This
gives you time to coursecorrect, and them the
opportunity to grow in their newroles. Right. We've covered a
lot here today. But let'squickly recap some of the
(07:59):
essentials. First, acknowledgethat and exit is inevitable.
It's not a matter of if butreally a matter of when, right
second, you want to align yourwants and wishes with a solid
strategy. And then know what youwant for your business in the
long run. And make the decisionstoday that will help you get
(08:20):
there. And thirdly, you have toassign accountability, right?
It's such a big piece. And sucha major area where small small
business owners lack is thetransfer of accountability. A
plan is just a plan untilsomeone takes action. So we're
talking about strategic planninghere. But then the next step is
to let them get some of thedecision making done for you.
(08:41):
Right, make sure you've got theright people in place to exit
this exit strategy. And thatgoes along with all your
professionals, your accountantsand your lawyers, and your
insurance companies, all theseother things too, right? If
you're serious about not justworking in your business, but
working on your business, thenit's time to take the next step.
Don't let another day go withoutthinking about your exit
(09:03):
strategy don't have to give it aton of thought if it's sort of
far away, but you have to startthinking about it. Time waits
for no one. And the sooner youstart planning, the better off
you'll be. So if you're abusiness owner looking to align
your goals and set up a solidexit strategy, I'm here to help.
You can head on over to speak topete.com That's speak to
pete.com book a free appointmentwith me and we'll see if we're
(09:26):
right fit. You know, we'll digdeep into your business, align
your goals and set you on a pathfor a successful exit if that's
what you wish. And remember,somewhere down the road, you
will have an exit and you'rehoping 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 likeany journey, it's filled with
(09:48):
twists and turns. But if youplan well you can navigate those
twists and turns like a pro andreach your desired destination.
Whether it's selling yourbusiness for hefty profit, you
know, maybe pass sing along tothe next generation or closing
up shop with peace of mind.
Remember, you're not justbuilding a business, you're
building a legacy. And a wellthought out exit strategy is a
key part of that legacy. So ifyou've got questions or want
(10:13):
personalized guidance, you knowwhere to find me, that's WWW dot
speak to pete.com. So thanks fortuning in. And until next time,
keep breaking through thosebarriers and building the
business you've always dreamedof. Now go and make it a great
day
Buzz Burbank (10:37):
and Ira ironic media production, visit us at
our ONICK media.com
Hey there, folks, and welcome back to another episode
of the business ownerbreakthrough. And today I
thought I'd like to dive into atopic that's often pushed to the
backburner, but it's prettycrucial for every business owner
to consider. And we're talkingabout the inevitable exit from
your business. Yep, you've heardme, right, we're talking about
(00:24):
the exit of your business.
Because one day, you're gonnaeither sell your business, pass
it down to maybe a family memberor friend, close it down, or
let's face it, you may end upexiting due to unforeseen
circumstances, like sickness, ormaybe even death. Not a great
subject to talk about all thetime. But it's something as a
business owner, you need to beprepared for and stick with me
(00:45):
here, because we're going to gothrough a few things that I
think are pretty important.
Understanding this reality cannow save you a lot of headaches
later, and actually help youbuild a stronger, more valuable
business right now, right today.
First off, let's face it, no oneruns a business forever. Even if
you love what you do, there willcome a time somewhere down the
(01:08):
road when you have to step away,or when you want to step away.
And that's okay. The key is tobe prepared for that day. I've
seen too many business ownersignore this reality, only to
find themselves in a bind whenlife throws them a curveball. As
a former business broker, youknow, helping people buy and
sell businesses, I can tell youthat it usually takes around 18
(01:30):
to 24 months to prepare and sella business. So if you're making
all of the decisions in yourbusiness, it will not look very
appealing to a potential newbuyer or for somebody that needs
to take over the business due tocircumstances, they want to buy
something that already hassystems and people in place.
That's what you'll get the mostvalue for your business as well,
(01:52):
you know, the closer you are tobeing removed from the day to
day operational decision makingin your business, the easier it
will be for the transition to anew owner. Let's use the example
of maybe a successful autorepair shop, business is
booming, the owner is workinghard, and she never thought
about the exit strategy. Andthen out of the blue, she got
(02:14):
sick, because she hadn't plannedfor getting sick, her business
suffered. And eventually she hadto sell it for way less than it
was worth. Don't let that beyou. Even if she didn't sell. It
may have taken her years beforerebuilding the relationships and
trust and confidence that shehad built with her community of
(02:34):
clients before she had left thebusiness for an extended period
of time due to sickness, youknow. So all of these things,
although we don't want to talkabout them necessarily, we do
need to think about themoccasionally and strategically
plan for it. So what's thetakeaway here, start thinking
about your exit strategy. Now,whether you plan to sell,
whether you plan to pass it onto a family member or even close
(02:56):
shop, having a plan in placewill give you the peace of mind
and make the transition smootherwhen 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 becauseyou had the dreams of a better
future. And understanding howyou're going to exit your
(03:18):
business is letting youunderstand what your better
future looks like down the road.
And knowing what you want foryour business, in the long run
will help you make betterdecisions today. That full
clarity that we talked about.
Because clarity createsconfidence and confidence
ignites momentum in the thingsthat you do. Are you looking to
sell for a big payday down theroad, or maybe just hold the
business as an investment.
(03:41):
That's kind of what I'm lookingat doing. Because I've got good
businesses that are running onrails, I don't necessarily need
to sell them because I have theright process and people in
place. So it's more of aninvestment. But it doesn't
matter what I'm doing it matterswhat your vision of the future
is, your end goal will shape howyou run your business now. And
(04:01):
if it isn't already startthinking about a lot of the work
that I do as a business coach isaround the transition of family
businesses to the nextgeneration. And there are a lot
of unique intricacies aroundtransitioning including the
communication, accountability,and all of these things that
need to be discussed in advanceof the transition. So whether
(04:22):
you're transitioning it to yourkids, or whether you're
transitioning it to a differentowner, it's the same sort of
thing, the ease of transition isgoing to make everything easier
for you and for the next person.
This is where the concept of thefive P's really comes into play
as well. You know, havingclarity around the promise and
aligning the product process andpeople to that promise so that
you can garner the right amountof profit, right. And also the
(04:43):
other one we've been talkingabout later is the CPA
communication process andaccountability in your business.
When we have these sorts ofthings in place. It's a lot
easier to transition to sell tohand it over to the kids you
know mastering These skills willnot only help you run a
successful business today, it'llalso help you set up for a
successful exit down the line.
(05:08):
Now that you've got yourstrategy in place, and you know
what you want, but a plan isreally just a piece of paper, or
an idea maybe in your head untilit's executed, and that's where
the accountability comes in,right your people, you need to
assign responsibility to theright people, in order to make
sure your exit strategy canactually happen the way that you
(05:28):
want it to. Think about it, ifyou're planning to sell, who's
responsible for making sure thebusiness is in top shape for
valuation? If you're passing thebusiness on to a family member,
have you trained thematically?
Are the processes in place? Haveyou started to align and assign
accountability? If you'reclosing shop, who's handling the
liquidation? What does that looklike? These are questions that
(05:49):
need answers. And those answersneed owners, people who are
accountable for making themhappen down the line. Start by
identifying key roles andresponsibilities in your exit
plan and then match them withthe 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
(06:09):
the plan. Even if you're youngand you feel that an exit is the
years off, you should have astrategy around this in the
event that you need to exit yourbusiness for whatever given
reason. Once you've assignedaccountability, the next step is
training and empowerment, right?
You can't just throw someoneinto the deep end and expect
(06:31):
them to swim, they need thetools and knowledge to succeed.
And this is where yourleadership skills really come
into play. You've got to trainyour team or your successor in
the skills that they need totake over those
accountabilities. I'm not justtalking about the technical
skills here, I'm talking aboutthe soft skills like
communication and decisionmaking for the betterment and
(06:53):
keeping the promise in alignmentof everything so that your
business carries on rememberthis EPA, right communication
process and accountability, makesure they've got these down.
Your job as a leader is to betheir coach and guide not to
make the decisions for them.
Remember, decisions should bemade at the lowest level of your
organization. So set up thesystems that make the transition
(07:15):
smooth, whether it's a detailedoperations manual, maybe a
robust CRM system, videos, or aset of best practices, having
systems in place will make iteasier for the next person to
step in and run the show. Right?
Once your team is trained. Startgradually delegating those
responsibilities. Don't waituntil D Day, it's too late then
(07:38):
to hand over the reins, test thewaters, let them take the lead
on smaller projects or decisionsand see how they handle it. This
gives you time to coursecorrect, and them the
opportunity to grow in their newroles. Right. We've covered a
lot here today. But let'squickly recap some of the
(07:59):
essentials. First, acknowledgethat and exit is inevitable.
It's not a matter of if butreally a matter of when, right
second, you want to align yourwants and wishes with a solid
strategy. And then know what youwant for your business in the
long run. And make the decisionstoday that will help you get
(08:20):
there. And thirdly, you have toassign accountability, right?
It's such a big piece. And sucha major area where small small
business owners lack is thetransfer of accountability. A
plan is just a plan untilsomeone takes action. So we're
talking about strategic planninghere. But then the next step is
to let them get some of thedecision making done for you.
(08:41):
Right, make sure you've got theright people in place to exit
this exit strategy. And thatgoes along with all your
professionals, your accountantsand your lawyers, and your
insurance companies, all theseother things too, right? If
you're serious about not justworking in your business, but
working on your business, thenit's time to take the next step.
Don't let another day go withoutthinking about your exit
(09:03):
strategy don't have to give it aton of thought if it's sort of
far away, but you have to startthinking about it. Time waits
for no one. And the sooner youstart planning, the better off
you'll be. So if you're abusiness owner looking to align
your goals and set up a solidexit strategy, I'm here to help.
You can head on over to speak topete.com That's speak to
pete.com book a free appointmentwith me and we'll see if we're
(09:26):
right fit. You know, we'll digdeep into your business, align
your goals and set you on a pathfor a successful exit if that's
what you wish. And remember,somewhere down the road, you
will have an exit and you'rehoping 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 likeany journey, it's filled with
(09:48):
twists and turns. But if youplan well you can navigate those
twists and turns like a pro andreach your desired destination.
Whether it's selling yourbusiness for hefty profit, you
know, maybe pass sing along tothe next generation or closing
up shop with peace of mind.
Remember, you're not justbuilding a business, you're
building a legacy. And a wellthought out exit strategy is a
key part of that legacy. So ifyou've got questions or want
(10:13):
personalized guidance, you knowwhere to find me, that's WWW dot
speak to pete.com. So thanks fortuning in. And until next time,
keep breaking through thosebarriers and building the
business you've always dreamedof. Now go and make it a great
day
Buzz Burbank (10:37):
and Ira ironic media production, visit us at
our ONICK media.com
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