The below flow chart considers the three stages of business ownership. Given the undeniable truth that every business owner will leave their business at some point, the three categories are comprehensive. Following the Business Owner Flow Chart are summaries of the services offered by Chinook vis-a-vis these categories. For a more detailed exploration please contact Chinook for a comprehensive consultation.
Business Owner Flow Chart
The first category considered is the Sell Path. This is pertinent to owners who are personally ready to sell. Physically, emotionally and spiritually they are ready to move on to whatever is next, be it retirement or another opportunity. Valuation is the first step in the Sell Path. There is no point in going to market if we can only expect to sell your business for $500,000 and you know you need $750,000 to do what you want to do next. This is the time to review the owner’s objectives. If his ‘what’s next’ goals can be modified, then going to market is still an option. If not, then the owner can use our value driver report to springboard an effort to increase the value of the business. The owner may choose to seek business coaching or consulting to help him develop and implement a plan. All this is done with a view to improve the value of the business and go to market without compromising the ‘what’s next’ goal.
If the valuation of the business is adequate to meet the financial objectives of the owner, they may choose to move ahead with going to market. In preparation for the marketplace, a Confidential Business Profile (CBP) is developed along with a Blind Profile. The CBP is a comprehensive detailing of the business encompassing all aspects of the business, internal and external, financial and operational, and all aspects in between. The owner must approve all documentation before it is presented to the marketplace. The Blind Profile allows us to market the business without revealing its identity.
The second category to consider is the Exit Plan. For owners who can see leaving the business on the horizon. This is typically 2 to 7 years, although we always say the best time to do an exit plan is while you are starting your business. Exit planning is designed to put the owner’s objectives clearly in front of all his professionals to give them the best opportunity of achieving those objectives. Here Chinook would ‘quarterback’ the process to ensure that each professional’s areas of expertise is implemented with the goals of the business owner in mind: to make certain that the individual professional not skew their aim towards their individual area of expertise. The Financial Planner, Insurance Representative, Accountant and Lawyer all have an important role to play. Business owners who have the courage and foresight to implement this program will have the very best opportunity to exit their business on their terms all while in control and maximizing their personal and financial gain.
The third area of business ownership is Value Drivers. These business owners do not yet see themselves ever not owning their business. Many smart people have said that one should begin with the end in mind. Other wise ones say enjoy the journey. This approach to business ownership considers both. The first step is to get a free Value Driver Report. The information learned from this report can be the foundation of a business plan. This business plan will make your business more valuable and attractive to buyers if it were on the marketplace. The bonus, however, is that it will also make your business more profitable and easier to operate.
The undeniable fact is that we all must leave our business at some point. Implementing a plan today will ensure that no matter when you leave or what exit strategy you choose to employ, you will be able to move on in the most advantageous manner for you, the business owner.