Retail Observer

RETAILOBSERVER.COM JANUARY 2023 50 I t has been said that the day you start your business is also the day you should develop a plan to exit the business. But let's be honest with ourselves: most business owners don't do this – or we think about it too late in the game. Many of us tend to "find ourselves" in the businesses we're in, without always knowing exactly how we got here, let alone how we're going to exit. Are you planning to create a seamless transition to a family member or key employee? Perhaps you're looking to the outside market for a strategic buyer? Whatever route you take, the question is always, "Are you ready to get maximum value for a business you've spent years building with your blood, sweat and tears, as well as the financial investments you've made over time? " I know it's hard to think about getting out of your business while you're still building or growing it. But the reason most of us start businesses (in addition to serving our communities) is to create real value and wealth for ourselves and our families. Don't sell yourself short. As you create and reevaluate your business strategy for your company every year, you need to incorporate into that strategy a succession or exit plan. It should cover your plans to retire, who your successor(s) will be, or the steps you'll take to find a buyer on the open market. And much like your business strategy, it should be a very fluid plan and subject to change as you and your business evolve. It's a business plan that looks at everything that will happen over the next five to 30 years, depending on where you are in life. Your business plan should be a constantly changing document that can be updated over time. Don't get locked into what you put on paper – conditions and people change. Perhaps after 10 years you will have built a business that has value; and maybe the next generation is ready now. Your business plan should be flexible enough to allow you to take advantage of another opportunity, or to give you more time to spend with the grandkids. WHAT SHOULD YOUR NEXT STEPS BE? • Start preparing now, before you want to sell. To get maximum value, you must show steady growth year over year. Processes and systems must be in place. A potential buyer will be looking at trends. Can they come in and continue to make money from day one? Your people (your biggest asset) must all be on the same page, matched with solid processes. • Document all your policies and procedures. Build strong teams and make sure the business is built to run without you. Define your core values and make sure every employee is on board. • Define what the real value of your company is. Steady growth? Consistent profits? People? Processes? Systems? What are your unique differentiators in your market? Are they clearly defined, and just as important, well-articulated and known by your community? • Have you identified who will take over? Are they ready? If not, what skills and/or training will they need in order to be ready? • Identify your transition team. Get your team involved: CPA, attorney, financial planner, insurance/tax planner. Get professional advice. You are not and should not be in this alone! • Figure out your worth. What is your business really worth? How did you establish that value? Can you clearly show the math on how you got to the number? Would a reasonable buyer agree? By clearly defining your succession plan, you will not only be building a better company that's ready for transition, you will be building a more profitable company right now. Rick Bellows, Executive Vice President of Field Support Nationwide Marketing Group Rick Bellows Succession Planning RO DOES YOUR COMPANY HAVE A CLEARLY DEFINED SUCCESSION PLAN?

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