You likely know the pain associated with having to fix the roof before you sell your home. Or worse, maybe you didn’t fix it, and now the potential buyers have noticed the water marks on the ceiling. Your heart sinks, knowing that if they will even make an offer, it’s probably going to be low.
The same principle holds if you are facing the prospect of transitioning out of your small/medium business – something 41% of businesses in Canada are potentially facing in the next five years, according to the Canadian Federation of Independent Business (CFIB). You no doubt meant to get organized, do some planning on paper, develop the needed systems and business infrastructure… but you were busy working in and building your business.
Whether you are preparing your business for succession or sale, or considering seeking finance or investment for new growth, it’s not too late to get organized. And you definitely want to make the investment in doing that, because it can significantly improve your valuation (like renovating before a home sale increases your equity) and because you’ve worked too hard to be disappointed at the end of it all. The CFIB reports that most business owners who sell regret their decision, in part because of poor planning/preparation.
Here’s a short list of things you as a business owner should have before exiting:
A Business Plan:You’d think this would be something done at the onset of a business venture, but you’d be surprised (or maybe not) at the number of businesses in operation today that have never taken this critical step. My rough guess, from my time visiting businesses as a Business Retention and Expansion Officer, is that as many as 6 or 7 out of 10 SMEs have never created a business plan. So why bother doing one after the horse is out of the barn? Well, there’s the old saying: fail to plan; plan to fail. If you need to attract investors or get financing, you need a business plan. If you want to set your business up for success long after you are spending your days fishing in Florida, you need a business plan. In short, if you have a business, you need a business plan.
A Talent Strategy: Particularly in Alberta, where the chronic labour shortage in critical industries is described as the number one obstacle to business growth and sustainability, this often overlooked component of building a successful business is imperative. Implementing a solid strategy for recruitment and retention and talent development can establish you as an employer of choice, a competitive advantage you need in this “skills bull market”.
A Communications Strategy:Everyone knows that communication is the most important factor in any kind of relationship. Everyone knows it, but few understand that communication, internal or external, is so much more than dissemination of information. Investing in a communications audit and strategy will do more to reveal the challenges and opportunities in your business than possibly anything else. Working in an atmosphere with good communications processes is like opening a window in a stuffy room; suddenly everything feels clear and everyone breathes more easily.
An Integrated Financial Strategy:“Integrated” is the operative word here. Many businesses focus solely on their numbers and ignore all of the other points mentioned in this post, to their detriment. Want to improve your bottom line? Develop a comprehensive plan with a strong focus on your people and your communications. Strategy alignment of every facet of your business to your corporate vision, linking strategy to execution, can exponentially improve your financial outcomes.
Sound overwhelming? It needn’t be. I’m part of a highly skilled team with access to tools and resources to do all this heavy lifting for you. Avoid the trauma of transition and invest in setting for business up for long term growth and success. And then enjoy your time fishing.