One day your business and you will no longer be one.
How often do you talk to your partners in your business and personal life about the eventual exit plan you have?
You don’t have partners? Well I’m sure you do, actually. These can all be considered to be partners, in varying circumstances:
- Fellow shareholders, directors, members
- Senior employees, support professionals
- Funders, suppliers, customers
- Life partners, parents, children, siblings
- Extended family members and heirs
So unless you’re a one man blogger living as a recluse in a mountain cabin selling hand carved sex toys online, you probably have partners in your endeavour.
You spend long hours talking about the strategy required to close deals, achieve the best return from your advertising, finding better channels to customers, improving production and delivery, and other necessary discussions. How much time do you dedicate to planning for your exit, or that of one of your partners?
That exit has a direct effect on the lives of the counter parties. Quite apart from the fairness side to the equation, those discussions allow the equity holders to GAIN value. The most successful negotiations I have been involved in over 25 years or so, involve annual involvement of the other partners.
“At some stage in the next 7 to 10 years I intend to retire. Let’s have a chat about what your continued role will be in this business after I have left. How are we going to make sure that you add value to the organisation, and therefore guarantee your position”.
“Look guys; one of you is going to have to buy my shares at some stage in the future”.
“Ladies and gentlemen, we are all involved in building a major asset in the nature of this business. Let’s do more than keep tabs on the performance of the organisation, and do whatever we can to maximise value each and every year for the next five, so that we get to exit with something really meaningful”.
“OK, we all know the country is in a difficult time in history, both politically and economically. What can we do to make sure that we don’t only come out the other side of this time, unscathed, but with a much more valuable company?”
There are hundreds of similar conversations to be had, at levels from the boardroom, down to the mom and pop brushing their teeth at night. Are you party to a similar discussion on a regular basis?