Do I Really Want a Premium Exit
Very few entrepreneurs are comfortable doing hard things. The entrepreneur mindset is solving problems, creating revenue streams, filling a gap in the market, and leveraging what “I do better than anyone else.” The blind spot some entrepreneurs have is doing the hard things it takes to be receptive to change and the self awareness to be humble. We’ve always emphasized with our clients and partners to ask the question – make the time to gain clarity and apply the new information to craft next steps. The question we’re asking is are you prepared for the realities of today filled with the uncertainty of tomorrow?
That answer is the next best step for you to understand where to look to anticipate the next change in your business. Whether that involves people, product, process or profit, sometimes it’s vital to pause, assess the landscape and understand the hard things in front of you before making a decision. That next step you commit to engages the most important characteristic of leadership – courage. Are you courageous enough to abandon the past results for a direction that may be unfamiliar or uncomfortable? You can do hard things. Can you? Will you?
The average person is just trying to survive – not to be their best, not to thrive. You’re not the average! You’re a highly successful entrepreneur. Why does that matter? We look for people who want to be their best, to have great results with great relationships. You don’t know us and we don’t know you, and our next best step is to offer you insights that inform, educate and aspire your best and for those of your team while answering any questions you may have along the way.
Building muscle is hard, so most are physically weak. Starting and building a business is hard, so most work a job they hate. Saving money is hard, so most are always broke. Being hungry is hard, so most are overweight. Reading books is hard, so most are glued to screens. Can you do the hard things or not? Will you have the discipline and commitment to do the hard things?
Some day in the future you will exit your life’s work. You’ve heard it before; exit on your own terms. There’s exiting on your own terms and there’s creating a premium exit. To a degree, we’re counting on your ego to want to win and take a premium exit. This step is where hard comes in. Every Wednesday at the country club you’re having those conversations on valuation, a sales process and how you’re masters of the universe. It’s not a slight, but let’s not kid ourselves. The next time you wake up at 2am again wondering what in the fuck you’re doing make a decision that you’re done.
We can talk about the math, the numbers and more of what matters for you and your family today and tomorrow. The ‘can you, will you’ is you have to decide. Do you want to keep this life going the way it is or do something different? Because once you’re sick and tired of being sick and tired, enough is enough. Remember receptive to change and the self awareness to be humble? The hard truth. You find yourself in this situation you’re in is only because you allow it to – a decision to drive you instead of you driving the decision. The next best step is committing to the decision that you’re done.
It will take some time for your mindset to shift from that of the entrepreneur to one of a seller. Chances are you’re the best salesman in your company. That skillset isn’t the same when selling your business – far from it. The attitude you have as the best salesmaker is the only trait that transfers! Understanding what a sales process looks like, why some owners succeed and others fail during a process, what you can do to prepare for a premium exit and what are the common attitudes and behaviors of unsuccessful owners are just some of what’s spinning around in your mind right now. Whether you’re a $5, $15 or $50MM business, you still have bills to pay because of the lifestyle your business has afforded you. It’s all relative at every level! And yes you are to be applauded for building something great, earning millionaire status. It’s a great feeling you’ve earned, created and for the employees in your charge.
There’s a number in your head and on paper you must have after taxes to maintain and enjoy the lifestyle you’ve created and there’s a number you’ll get. We want to narrow if not eliminate the gap between those two numbers. We ask the question again, because most of our clients are 55+ some with tread left on their cleats and some have had enough. Are you willing to do what it takes in your business at this stage to achieve the price you want or must have? You can keep on running your business until you die if you want. If you want to sell smart, then you have to grow smart or, drop your expectations to the level of your current value. Buyers do the same. They add people and process to achieve the value they must have to generate IRR once sold for their investors. It’s a formula, a playbook that’s worked for decades.
The mindset is to adopt a position your business is attractive and ready to sell or put the necessary pieces in place to be prepared and command a premium exit. What’s involved as a snapshot is strategic diversity in attracting and developing customers, vendors, suppliers and talent; mitigating risks by strengthening operating disciplines, process and accountability; financially strengthen metrics that move valuation north of your peers; succession development and professional management to buy, build, borrow and develop your team to lead, follow and grow the future. Replace yourself as whatever title you call yourself. That next question – Am I willing to make a little bit less money now, but I know when I put my efforts into sales, marketing, etc. (whatever your dominant skillset is), I’ll more than replace that income and never have those 2am wakeup calls again.
The road from where you are to where you know you must go is never straight. Every business case is different even if they’re in the same industry, segment and market. Some will take six months and others six years to prepare to exit, which is why some will get what they want and other’s will not and regret selling. 3. Three conversations with investment bankers, or advisors is our last recommended step. Do your homework, gather data and make your own decision. Commit to a decision and follow it through if you can do hard things that yield great results with great relationships…the conversation continues…
