Got Exit Strategy?
Renowned organizational consultant Stephen Covey says that all success starts in one place: Your mind.
He calls it "beginning with the end in mind" -- having a clear vision of what you want before you begin, just like a building follows a blueprint.
Nine times out of ten I find, when I work with business owners who are struggling, it's because they have neglected to do this very important visioning work that assists in creating an exit strategy.
You must know where you're going if you ever hope to get there.
To assist in this process, I want to introduce you to a powerful framework for understanding the phases of business growth. It's called the Five Steps to Freedom, and it will give you a roadmap to building a true business asset -- a company that continues to progress and produce profits even without your day-to-day involvement.
Here they are...
Step 1. CREATION.
This is when you're beginning as an unknown in the marketplace, researching a viable niche or approach for your business, developing a working prototype of your business model, and launching the enterprise.
This step is called "creation," but sometimes even an established business owner hasn't taken the time to put together a solid business model or research an exact market niche! If this describes you, one of the first things you must do is lay a sure foundation...because until you do, you'll be dramatically hindered in your ability to transform your business into a profit-producing asset.
Step 2. DISORDER.
This step is every bit as chaotic as it sounds! It's when you begin waging the often-bloody battle of becoming cash flow positive. You do it by investing heavily in sales and marketing and other high-impact growth strategies. Your goal is to create effective marketing systems and build enough brand awareness to capture as much market share as possible, as quickly as possible!
Sadly, only a handful of businesses ever make it past this step -- and if you're struggling to find enough time to really work on your business, chances are you're stuck here. Still, there is light at the end of the tunnel, and if you can power through it, you'll soon find yourself in the next phase...
STEP 3. CONTROL.
This is when you convert cash flow into profit by stabilizing and organizing your operations, measuring your well-chosen performance metrics, and fine-tuning and adjusting the business model.
This step is all about systems: organizing the business in such a way that YOU aren't needed for every decision, every sale, every day-to-day interaction with staff and customers.
STEP 4. PROSPERITY.
Your goal here is to solidify a position of dominance in your niche market by economizing and optimizing for efficiencies. This will allow you to continue to invest in growth and repay debt. When you've reached this point, you can really start to enjoy the fruits of your labors!
STEP 5. FREEDOM.
Your final act is to reproduce yourself and develop a strong core of leaders who will continue to grow the business through partnerships, joint ventures, and acquisitions.
At this point, you will enjoy the luxury that comes from having free time...and free cash flow.
Of course, as valuable as the five steps are in and of themselves, it's not enough just to know them. You must understand how to apply them to your business and situation. There are five additional steps you need to take in order to make this happen:
Complete Your One-Page Strategic Plan. This is one of the most effective planning tools in existence: on a single page, identify your company's vision, values, Key Performance Indicators, as well as long-term, short-term, and immediate goals -- and much, much more. If you want to guide your business through the five steps to freedom, you need this resource.
Understand the Current Value of Your Business. In order to get to where you're going, you've got to know where you are. You need a professional assessment of the current value of your business so that you understand exactly what it will take to reach your objectives. You are welcome to look around for a business appraiser on your own -- or reach out to me and I will recommend evaluators known for their speed, professionalism, and accuracy.
Hire a Business Coach to Help You Increase the Value of Your Business. A reputable business coach will help you make the changes you need to eliminate waste, improve your cash flow, and increase the overall value of your business so that you can prepare it for a successful sale and transfer. Most entrepreneurs simply need the expert attention and accountability that a business coaches provides in order to make the fastest progress possible.
Assemble Your Power Team. If you don't already have an accountant, financial advisor, and attorney on your team, it's time to begin shopping around for them. They will prove vital as you prepare your exit strategy.
Begin Developing Prospective Buyers. Start on the inside: current staff members and executives are often prime prospects for buying your business once you're ready to sell. If there is no one internally, consider the services of a business transfer professional to help you find an external buyer.
Remember: this is NOT a pipe dream. I've seen dozens of business owners completely eliminate financial worry from their lives forever by navigating the five steps to freedom and leaving their business in the hands of competent leaders. You can do it, too.
If you’re experiencing problems in your business related to time, team, or money, please don’t hesitate to reach out to firstname.lastname@example.org or click to schedule a complimentary 30-minuteBLiTZ session with Dean.