Opportunity knocks– is your business and are you ready?

Your business is humming along, revenue is strong, profit margins are growing, and your staff is engaged.  You feel like you are moving into a great season of life.  But are you ready when an opportunity comes calling? 

Take a moment to play the what-if game… What if an interested strategic company reached out to you and wanted to acquire your business? Are you ready?  What if an internal key employee approached you with the idea of taking over the business? Are you ready?

Knowing your answer to hypotheticals is challenging, but thinking about it before the questions comes up can help you make the right decision.

So, how do you get ready for the opportunity? First, let’s take a look at you and your business – where are you today in respect to 3 main areas – Personal Preparedness, Financial Readiness, and Business Attractiveness

Personal Preparedness

Personal Preparedness includes personal estate planning. Typically, estate planning involves getting your “house in order.” Usually, estate plans address what happens to your estate should you die or become incapacitated. This is especially important for business owners because they are counting on the sale of their business to fund their retirement and in an early death fund the retirement of their family. 

It also means getting yourself ready. What does your professional life look like when you transition out of your business? If you suddenly became disabled and couldn’t work, or you died prematurely, what would happen to your business? Would your employees continue to come to work after your funeral? Would they wonder if they would get paid? Would they wonder if your spouse is now taking over? Would some or all decide they need to consider finding a new job? What would happen to the value of your business if a large number of your employees left within a couple of weeks, would the business survive or maintain its value? How can you get prepared for the unexpected?

Financial Readiness 

How much money will you need to fund your retirement? What does your personal  P&L look like when you are responsible for your expenses, not the business?  When you know how much money you need,  then you learn how much you need to net from the sale of your business at your exit. Now you can see if there is a gap between what you need and what the value of your business currently is- this Value gap gives you a great place to start and work on your business to grows its value now so you can be ready when an opportunity knocks. 

Business Attractiveness

Could someone else easily buy your business and be successful? A buyer will consider the business’s future cash flow. They will consider the risk associated with them buying the business and the persistence of those cash flows. Do the cash flows fall off if you aren’t there? What happens to the business if you are not there – does it hum along without missing a beat?  Are your customers doing business with your company or are they doing business with you?  If you are the only reason the business is successful take time now to change that dynamic so the business and you are ready for an opportunity.

You are the leader of your business – take up the reins – drive it forward and be ready.  Take the time to work ON your business by committing to working with a professional business coach. Together, you can explore the avenues open to you should you stumble upon an opportunity, and make the choice that’s best for you and your business.

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