This post is about one of my 45-second pitches at my BNI Chapter, BNI City Business. You can read the introduction to this collection here.
16 February 2024. Another meme that I had been sitting on, and a perfect match for the topic. First, we need to have locked down our clearly stated reason for exit: what you are going to do after exit. You want to be running to this post-exit objective rather than running from your business. Most business owners hang around too long in their business until they are forced to exit without a goal, and are therefore running from their business. Second, you need to have a good understanding of what your business is worth at the start of your journey. You will use this value as the basis of assessing the contribution of every initiative in your exit plan, and to set your target exit value. Will the initiative increase or decrease the firm’s value?
This week is about the third step of the exit planning journey, developing your exit roadmap. I typically start this discussion with the paraphrased quote from Alice in Wonderland (CS Lewis): “If you don’t know where you’re going, any road will take you there.” I actually prefer this wording to the original (above), as it makes the point with more clarity.
But I digress.
Without a clear exit goal and at least a rough timeline, you could end up walking in circles, focusing on things that don’t add value and are therefore unimportant to your exit. Developing a plan – your roadmap to exit – is essential for the process to work well.
Your exit plan comes from an understanding of the value drivers and value detractors in your business. As simplistic as this sounds, you build up your capabilities around the value drivers, and eliminate as many of the value detractors as possible. The business valuation or appraisal from the second step helps you identify and understand these value factors. You may also do some more analysis of your business as it is today to ferret out further factors for inclusion in the plan that will drive the value up.
The plan is your roadmap. It helps you know where you need to go.