(the following conclusion is vitally important to eliminating burnout and enhancing your quality of life as a business owner)
“You-proofing” your business has enormous benefits.
It will allow you to create a company and have a life. Your business will be free to scale up because it is no longer dependent on you, its bottleneck. Best of all, your business will be worth a lot more to buyers when you are ready to sell.
Another name for this type of independence is called the Hub & Spoke model, which is an indicator of how your business would perform if you were unexpectedly unable to work for a period of three months, or more.
Hub & Spoke is one of 8 key drivers of company value discovered in a detailed research analysis of more than 30,000 businesses, as part of the renowned Value Builder System.
The report revealed a startling fact: Companies that achieve a Value Builder Score of 80+ out of a possible 100 receive offers to buy their business that are 71% higher than what the average company receives, which is 59 out of 100.
From the Value Builder Questionnaire, after a Score is generated, business owners can access a comprehensive Assessment report detailing each of the 8 drivers’ specific effect on company value and sellability, allowing the business owner to pinpoint opportunities of “low-hanging fruit” for optimization.
It’s important to mention at this point that whether you plan on selling your business in the next year, five years, or 10 years, or if you have no thought about selling whatsoever, there is inevitably a time in every business owner’s life where exiting their business for one reason or another suddenly becomes a need and a priority. Could be because of health problems, burnout, or a desire to take on a new and different opportunity.
Regardless of the reason and the timeline, the most responsible and productive thing to do is begin “exit planning” and preparing your business for a future sale well in advance of that day. This will ensure that when the time comes, you’ll be able to sell for the highest possible value, on the most favorable terms (for example, all cash versus seller financing), and with the quickest and smoothest process possible.
If you wait until you NEED to sell to start optimizing your company’s value and sellability — measured by these 8 Key Drivers — you will be viewed as a “motivated” seller and get put through the wringer by potential buyers.
As the saying goes, dig your well before you’re thirsty. This maxim is more applicable to the inevitable future exit and sale of your business than any other element of business ownership, so start now.
In the meantime, owning a highly sellable business will give you abundant freedom IN your business, until the day that you are ready to exit and gain ultimate freedom FROM your business.