The Hidden Goal of the Smartest Business Owners
What are your business goals? If you’re like most owners, you have a profit goal you want to hit. You might also have a top-line revenue number that’s important to you.
While those goals are important, there is another objective that may have an even bigger payoff: building a salable business.
But what if you don’t want to sell? That’s irrelevant. Here are five reasons why building a salable business should be your most important goal, regardless of when you plan to push the eject button.
Salability means freedom.
One of the fundamental tenets of salability is how well your company would perform if you were unable to work for a while. As long as your business is dependent on you personally, there’s not much to sell. Making your company less dependent on you by building a management team and creating “just-add-water” systems for employees to follow means you have the ability to spend time away from your business. Think of the world of possibilities that would open up if you could choose not to go into the office tomorrow.
Salable businesses are more fun.
Running a business would be fun if you were able to spend your days on strategic thinking and big-picture ideas. Instead, most business owners spend the majority of their days on the minutia: the government forms, the employee performance reviews, bank reconciliations, customer issues, auditing expenses. The boring details of company ownership suck the enjoyment out of owning a business — and it is exactly these tasks that you need to get into someone else’s job description if you’re ever going to sell.
Salability is financial freedom.
Each month, you open your brokerage statement to see how your portfolio is doing — not because you want to sell your portfolio but because you want to know where you stand on the journey to financial freedom. Creating a salable business also allows you peace of mind, knowing that you’re building something that, just like your stock portfolio, has value you could choose to make liquid one day.
Salability is a gift.
You might be planning to pass your business to your kids or let your young managers buy into your company over time. These are both admirable exit options, but if your business is too dependent on you, and it hasn’t been optimized to run without you, you might be passing along an expensive liability. Success and continuation of the business without you needs to be a major consideration before thinking the transfer of your business is a gift.
Nine women can’t make a baby in one month.
There are some things in life that take time, no matter how much you want to rush them. Making your business salable often requires significant changes, and a prospective buyer is going to want to see how your business has performed for the three years after you have made the changes required to make your business salable. Therefore, if you want to sell in five years, you need to start making your business salable now so the changes have time to gestate.
Are you curious about how salable your company is and what you would need to tweak to sell it when you’re ready? If so, it’s time to get your Value Builder Score via the questionnaire on our website. It takes about 13 minutes, and your responses are kept confidential. You can complete the questionnaire at integrabrokers.com.