It's January! that means saying “So Long” to 2017 and turning the page to a new year.
That means it’s also time to be making plans for 2023. Don’t worry, you’re not Rip Van Winkle and you didn’t miss the past five years (My prediction is the Browns will win the Super Bowl and the Macarena will make a comeback in 2023).
While RSAs may think a month ahead, and managers may think a year ahead, savvy business people do take time each year to think about where they want to be five years in the future. You may laugh at the idea of a five year plan, but life, especially business life, is a journey. If you don’t have a road map to where you are going, you’ll never know when you get there.
Most journeys have unexpected detours, roadblocks, traffic jams, and exits. Because most of these are unexpected, you can’t plan for them. But you can plan for exits. Many people even call this an exit plan. Ideally, from the day you open your business, or start a new career, you should be looking for the way out. Exit plans include selling a business, passing it on to family members, or even liquidating for cash. Unless you plan to work until you take that long dirt nap, you will want to know when and how you want to take a final curtain call.
This is not to suggest that you should exit in 2018 or 2023 or any particular point in the future, just that the sooner planning starts, the more time you have to get your house in order.
Like Selling A House
Exiting a business is like selling a house. Realtors will tell you that the more modern, clean, and attractive a house, the quicker it will sell, and sell for more. Think about these ways to add value to your business:
Does enhancing your store front and signage increase or decrease the value of your business? If you guessed INCREASE, you are right. When it’s time to sell, you’ll want fresh paint, bright channel letters, and shiny windows --- along with a clean curb.
Often called your second storefront, many prospective buyers will search for and browse through your website first. Will an exciting, informative, interactive and e-commerce ready website increase or decrease the value of your business? Again, INCREASE is the correct answer.
Buyers of businesses in the 21st Century expect sellers to have all the qualities mentioned above, and for the business to have a great record of active digital traffic. Ignore your website and prospective buyers will pass your opportunity by.
Home Sellers today can enlist the services of professional staging companies to make their homes look great. The #1 issue that Stagers run into is too much junk and stuff in houses. Step One for them is to make the owner sell, toss, or store the effluence they have collected in a storage facility. Selling your business means selling all of your inventory based on actual cash value. That means a torn box spring that you paid $70 for back in 2014 is worth $10 (or less). All inventory over 360 days old is valued at about half of cost, and damaged, older, and pieces-parts are worth less (or worthless). Will having only a new, salable, and complete inventory increase or decrease the value of your business? Once more, increase is right. Drain your swamp of old over-parked merchandise and you’ll raise cash today, making your business more valuable tomorrow.
It can all be summed up in one word: WOW! Successful realtors know, when a buyer says wow when they enter a home, they can pull out their offer sheet. When you sell your business it’s the same. If you can get your prospective business buyer to utter that same expression, you are on your way to the exit ramp and the payoff for your hard work. Wow comes from a lot of things. Up-to-date paint and flooring is a start, lighting and fixtures count too. Top it off with a unique shopper experience, meaning making your store a place people want to, instead of have to shop, and any business buyer is sure to be wowed.
Here’s the really cool thing about getting ready to exit your business. Just like improving your home residence, any investment you make is yours to enjoy right now, so why wait until you are ready to cash out to make the investment. Improving the exterior and interior brings you more shoppers and helps convert them to customers. Put together a strong website and an attractive social media campaign and your site may go viral, or at least get people to take you seriously. Clearing out dead inventory gives you immediate cash to invest in all of the above.
If you plan to exit in 10 to15 or more years, you may not want business buyers in your store now. But you do want home furnishings buyers in your store every day starting now. Improve your store like you want to sell it in 2018 and you’ll see more clicks, views, foot traffic, and sales. It may even make you say “WOW”!