My Library and Courses
Last Update: Friday October 20, 2017

Key Idea: Think Now About Later

Hattie says you need to start thinking now about how you will leave your business because it is your baby and it will grow up. Like all of us, businesses have a life cycle.  More...

Key Question:

A: 

Start thinking now about how you will leave your business because it is your baby and it will grow up. Like all of us, businesses have a life cycle. They are embryonic (remember when you first had that great idea?), are born, grow to maturity (oh, the challenge of those early years!), live the adult life, age, and finally, pass on. If you create a business with a longer life cycle than your planned working period, you'll have something of value to hand over to someone else! As you build your business, you are creating an annuity.

Think strategically and document, document, document. Start now to capture the story of your business as it unfolds. Go to your favorite search engine and do a search for "scrapbooks." Get the right supplies and do the book right. Include lots of photos, every piece of press you get, every mailer you send. By the way, this is a great way to get a parent, aunt or uncle involved in your efforts. Explain to them the importance of documenting your business' evolution, equip them with the right supplies, and pass on to them all the materials you want in your book.

In addition to the scrapbook, commit to quality bookkeeping. Hire a CPA to create financial statements and always pay your taxes. Keep this thought in the back of your mind: If I wanted to run for Mayor, what would a curious press discover about me if they got a hold of my business records?

Take the time now to educate yourself about succession planning. Learn the difference between price, cost, and value. Read books, attend lectures, visit with business brokers at Chamber luncheons, etc. Be confident that someday, you'll need this knowledge. 

Think about it

Is there anything about your business about which you are embarrassed or ashamed? If yes, what can you do now to fix the things that cause you to feel this way?
 
 


 


Clip from: From Equity to Exit Strategies - 8 Possible Paths

The world:  Most of us small business owners do OK competing with the big businesses in our industries or we don't survive. But when it comes to our exit strategy and succession planning, most of us fall on our face.

This episode is to explore business valuation and exit strategies.

An exit strategy is just like doing a will, but here you try to maximize the dollars you get out of your life's work.   Nobody wants to see you liquidate. That's getting pennies on your dollars. Tangible assets get sold (fire sales) and the intangibles are lost forever. Liquidation is the worst kind of liquidity.  

Most of us will sell our business through merger or acquisition. But, if we get much over two-to-three times sales or six times earnings, we all think we've done very well. Yet, when big business sells, they usually begin at six times earnings. Then we see 40 times and even 300 times earnings on the open markets. Why should we be satisfied with so little?

Go to all the video clips within this episode...
Go to the homepage of this episode...

We all must prepare today for the invevitable tomorrows.

Small Business Owners Everywhere in the world, We all will exit our business someday.

Visit our web site: http://smallbusinessschool.org/page1107.html

Business Classification:
Education

Year Founded:

Think Now About Later

HATTIE: Hi I'm Hattie Bryant. We all ask the question, "What will my legacy be?" What has been the meaning and value of my life?" There are over 25 million small business owners in the USA and all of our companies together represent over $47 trillion of dollars of net worth. For most of us that business is a very important part of our legacy. Most of us ask, "Could the business live on without me?" And we all ask at some time, "How can I get my money out of my business?"

Today we are going to look at exit strategies and equity models.

We'll look at eight ways to get your money out of your business at the same time you leave the essential values in it. That's called an exit strategy, and we know most of you do not have one. And we also know that we all need one.

The moment any of us start a business, we should begin asking, "How am I going to get out of this business?" Succession planning is a key to your overall success. So let's look a range of possibilities and how each might benefit you and your employees the most.

We believe there are eight possible roads to travel. Most of you will take the first road. Although we hope you’ll choose one of the last three. So we'll be moving quickly down the first five roads, and you need to know that all of this information is on our web site. If you go there now, you could follow along.
 

Not a member yet? Learn!  Be empowered! Join us!