Every business owner eventually exits their business at some point in their life. This is either done by their choice for reasons like retirement or acquisition, and other external factors, while others depart because of changes in the market or change in personal circumstances.
No matter the reason for your business exit, it’s important to create a comprehensive and strategic business plan. An exit strategy coach can help you evaluate the numerous and complex options available to you.
How to Know When You’ve Reached Level Three
What exactly does it look like when you’ve reached Level Three?
First, you’ll have solid leaders in place in four of the five core areas of your business. Yes, you may still hold on to the role of CEO for a while, provided you still enjoy a daily involvement leading the business. But you have the strategy, systems, and traditions in place to hire a new CEO if you choose. That means your business thrives even if you were only there two or three days a month. (Think Chairman of the Board.)
This signifies that your business is so strong that its success is independent of any single team member, including you, the owner. The business runs smoothly whether the owner is there or not over an extended period of time (based on sound systems, team, intelligent controls, and scalable solutions).
Also, it has clear processes and procedures to run all five areas: sales/marketing, operations, team, finance, and leadership.
You have an enterprise-level dashboard that allows you and your team to know the status and health of your business at any given moment.
Finally, you have the clear traditions and culture to help keep your business true to its vision, mission, and values even after you aren’t present every day.
Since you’ve built out your systems and developed your management team, you’re now ready to take that last step of implementing your exit strategy.
The 4 Business Exit Strategies for You and Your Level Three Business
Every story needs a great ending or you’re left feeling dissatisfied. Your business story needs a great ending, too. We call this your business exit strategy.
As you’ll learn, this may or may not mean actually selling your business. In fact, many Level Three business owners choose to stay actively engaged.
What’s the critical distinction?
Continued involvement is a personal choice, not a business requirement. That’s right. You get to make that decision and choose any of these four main business exit strategies:
- You can sell the business to potential buyers and move on to your next great adventure.
- You can focus on scaling the business to the big time.
- You can passively own the business, with a greatly diminished role for yourself in its daily operation.
- You can hand the business over to the next generation of owners as a legacy business.
The Exit Coach
An exit coach will typically work with the CEO or chairman on an exit strategy, planning, and the exit team.
The primary role of an exit coach is to assist with:
- The development of and alignment around a written exit strategy
- An estimation of selling price and probability of success
- Develops a realistic goal, budget, and timeline to complete the exit
- Identification of specific action items necessary to complete the sale
- Selection of M&A advisor and possible other members of the exit team
What are Your Options
- The Organic Option
You can simply let the business run its course. However, if you choose to do this and you’re no longer physically capable of operating your business, then it may not be sustainable without you. Alternatively, someone else decides it is time to close the door to the business. Perhaps as a result of intervention by another entity or person. This can include the bank, investor, or business partner.
- The Pro-active Option
You could transfer the business to a family member, a colleague, or another stakeholder to continue your work. Alternatively, you could sell the business.
Or you can use this time to create value in your business that a buyer will be willing to pay for.
Ultimately, determining the future of your business is your decision. The time you spend now considering your exit plan will be beneficial to you, the business, stakeholder, and the client. Having an exit coach can help you evaluate the numerous and complex options available.
Former Maui Advisor Jeff Hoffman’s first successful exit – a multimillion sale of his business! Jeff went on to help launch Priceline.com and take it public.
Level Three Case Study: Jeff Hoffman, CTI and Priceline.com
Jeff started his first software company, CTI, and grew it into a thriving innovator in the travel industry. He strategically positioned the company to be bought out by one of the industry’s major players, which is exactly what happened. American Express acquired CTI for $20 million!
Since that time, Jeff has gone on to build and later sell other successful companies, including being a founding team member and former CEO in the Priceline.com family of companies.
Here is Jeff’s observation of how the right Business Coach can help you succeed faster:
“Take the analogy of sports… the brilliant coach is the one that has the ability to take all the unspoken moves or experiences and actually communicate them into a play book that you can actually understand. What I get out of having a business coach is that my coach has run and worked with so many companies that they’ve seen that they’ve seen every situation. So when I don’t even know how to handle a new situation, my coach says, ‘Don’t worry about it, I’ve seen this pattern a dozen times. Here’s how to best handle it.'”