where am I?
There is a cycle to most things we endeavour in our life. A job, a career, a relationship, even a business all have a beginning, a middle and an end. The duration, impact and success vary, but a cycle of some sort remain at the core.
For business owners there are many cycles. The beginning of the business. The launch of a new product or service. The opening of a new location. The acquisition of a new customer. The list of cycles goes on and on.
The team at Ready for Next believes one of the cycles often overlooked or downplayed by a business owner is the cycle leading to a successful exit from their business. Far too often owners are too busy working in their business to work on their business.
In our opinion, business owners fall within three key areas: exploring, pivoting and triggering – beginning, middle and end of the cycle of transitioning out of their business.
Exploring owners are at the beginning of the process to transition from their business. These owners may not even have a timeline in mind but they know that one day they will no longer own the business. These owners have the benefit of time and a mindset to understand what is involved in keeping their business at peak performance.
Building transferrable wealth and developing a business with the mindset of being transition-ready allows for a business to operate at best in class increasing the chances for a successful, eventual transition.
Managing complex elements, accelerating value and maintaining a business in a state of transition-readiness takes time, expertise and support - even more true for family businesses involving multiple generations.
Pivoting owners are further along in the process to transition out of their business. These owners know the importance of proper planning and likely have an end date at least roughly identified. Owners who are ready to pivot understand there is a time to work on the business to work towards harvesting the wealth they have tied up in the business.
The owner is ready to look inside their business at value killers and value drivers to mitigate risks and enhance benefits. The owner makes value acceleration a priority to enhance the overall transferrable value to make their business more appealing to a buyer and increase the likelihood for a successful sale.
A value acceleration advisor will bring third-party insight and a wider market insight. Targeted value acceleration requires specific expertise to improve outcomes.
Triggering owners have reached the end of their personal business cycle. They are ready to transition from their business and usually the sooner the better. Sometimes their desire to transition out of their business is because of an external reason, like illness and other times it is because they are simply done.
This owner is usually facing an accelerated timeline and a full value acceleration initiative is not an option, yet neither is it an option to leave unrealized value behind. A triggering owner needs a transition champion to help offer clarity on their options and an in-depth understanding of the impact of each decision.
A triggering owner needs decision support to: quickly understand and evaluate all the options; assist with preliminary due diligence to help get the business in order; look, from a buyer’s perspective, to examine likely pricing and terms and build a team to support the owners transition team.
Time is of the essence for a triggering owner. Professionals need to rally to support the owner to achieve the best possible outcomes for the circumstances at hand.
When it comes to the cycles in a business, transition-readiness is one of great importance, it allows owners to fully leave their business on their terms and with the highest value possible.
No matter which stage an owner finds himself or herself in the transition planning cycle – whether at the beginning, middle or end of the cycle of transitioning out of their business, the more time and attention an owner can put into the transition process, the better. And there is no time like now to start.