The turn of the year is a time for endings and new beginnings. So there’s a good chance that your big exit has crossed your mind recently. You may have even put forth some effort to demystify the process.
You’ve attended a seminar or webinar sponsored by the financial, legal or accounting firms to find out what they suggest. You’ve read some articles (like this one) that encourage you to take steps that will get you started on a new path. And whether or not you’ve done something differently in your business as a result of your new information, you’re at least thinking about it more.
In my sales training program (Pure Selling: The Ultimate Sales Development Process by Wayne Vanwyck ), I discuss the buying cycle—the steps we go through as a customer before making a purchasing decision. Here are the stages, adapted from the motivational text Changing for Good:
1. Pre-contemplation: “Problem? Who’s got a problem? I’m just fine.” In other words, the customer is unaware of the need to make any change or buy anything.
2. Contemplation: “Okay, maybe I do have a problem, but it’s no big deal. I’m sure I can manage without any big changes.”
3. Looking for options: “Yes, I do have a problem and I need to do something to fix it. I wonder what my options are?”
4. Action: “I’ve found a solution. I’m going to buy this one.”
5. Maintenance: “Now that I’ve made the decision, I’m going to need some help and support to keep me on track.”
It’s the same process owners go through as they consider what to do with their businesses. A lot of baby boomer entrepreneurs are at the pre-contemplation stage. Though they’re in their sixties or seventies, they have no intention of slowing down. The bad news: there’s not much hope for them. Their heads are so firmly in the sand that they aren’t paying attention to the signals around them. They will do what they want, and it doesn’t matter much how it affects their employees or family.
Thankfully, more owners though are starting to awaken to the reality that succession is an issue that needs to be dealt with at some point. They are in contemplation mode and while they haven’t yet seen it as a problem, cracks are beginning to form in their denial.
Business advisors want to talk to those looking for options. Not only have these people woken up, they are actively looking for solutions and asking intelligent questions:
¢ What’s my business worth?
¢ How do I talk to my kids about the future of the business?
¢ How do I get enough money out of the business to fund my retirement?
¢ How do I ease out of the business and let others play a bigger role?
¢ How does one get two or three buyers interested in the business?
¢ What can I do to increase the value now?
¢ How much will I pay in taxes? How do I minimize that?
¢ What happens if I die or get disabled before someone buys the business?
¢ How do I motivate employees to stay on? What can I do to reward their many years of service and loyalty through good times and bad?
Then one day, perhaps in a quiet moment of reflection, during an argument with your spouse, or while talking to an adviser, you realize it’s time to make a decision. You take action and set in motion a series of events that inevitably leads to a difficult choice: Are you going to sell the business, close it, or give it away? Hopefully by this point you have surrounded yourself with good advisors who will help you to make the best decision to achieve whatever it is you want.
Making the decision is a critical step. It’s like a tipping point. One day you’re committed to running the business forever, and the next you’re dedicated to preparing for the transition and sale. They’re two very different mind-sets. But just because you’ve finally crossed that line doesn’t mean that everyone else is on board and up to date with what’s been transpiring in your head. It takes maintenance, in the form of clear communication and ongoing discipline.
It also takes support and help from your advisors. You will be tempted to pull back, to allow old ways to continue, to be worn down by all the daily efforts by others to maintain the status quo. You must resist and push forward for everyone’s sake. While change may not be fun, doing nothing can be fatal to your business.
Selling your business is a continuum that runs from pre-contemplation to maintenance. Where are you on that line? Is 2016 the year you move forward and initiate change, or will you continue to keep your head in the sand? It’s up to you.
Wayne Vanwyck is the founder of The Achievement Centre International in London, Ont. He is the creator of The Business Transition Coach Forum and the author of the best-selling books, Pure Selling and The Business Transition Crisis. He has been training and coaching business owners for the past 30 years.
MORE ON EXIT PLANNING:
- How to Make Your Own Exit Luck »
- Why You Should Always Be Ready to Sell Your Business »
- How to Kill the Sale of Your Business »
- 9 Reasons You Can’t Sell Your Business »
- How to Avoid Letting Your Emotions Blow The Deal »
Be honest: Where are you on the continuum? How are you planning for your exit? Let us know by commenting below.