While you may not think about it until retirement begins to appear on the horizon, the value of your business plays a major role in your exit strategy. How you develop and position your company now will be an integral factor in the variety of options available to you when the time comes to step out of your leadership role. To maximize your exit strategy options, consider these business elements sooner rather than later.
Whether we’re talking about subscriptions, contracts, or lease agreements, reoccurring revenue means potential buyers can count on a certain amount of revenue to help sustain them through the transition.
Your Unique Value Proposition
There is a wealth of investment opportunities in today’s business market, so it’s important that your business is unique in its offerings. In addition to helping boost your current profits and solidify your standing in your market, understanding and leveraging your unique value proposition can open up future investment opportunities, if selling the business is a part of your exit strategy.
All industries vary in the pace of their growth. For example, tech companies may show explosive growth, while insurance brokers expand at a slow and steady pace. Regardless of your industry, growing faster than your competitors will increase your value. Look towards innovation to leverage opportunities that others may be missing.
Your company’s vibrancy is an often-overlooked value point. Not only does an energetic image help to attract more customers, it could also address a motivating factor for larger companies who are looking to freshen up their image through the acquisition of a smaller, culture-driven business.
Whether you’re building a prized online space or operate in a prime piece of real estate, your location adds so much to how others value your company. If you are considering selling your company or simply passing it down to a second generation, saving them the time and effort of establishing a new location is truly priceless.
In this day and age, we’ve all experienced what can happen when major market fluctuations occur. Having a diverse base of customers helps to mitigate some of that risk. By ensuring that no one customer or client makes up more than 10% of your business, you are adding value to your company.
You’ve been working with your customer base for quite some time, and you know more about them than anyone else. Have you found the tried-and-true way of converting your prospects into paying customers? Establishing systems and documentation for your sales funnel ensures your business success will continue far beyond your retirement date.
Second In Command
Companies that have a second in command who will remain with the company following your exit are much more valuable. Major transitions can cause anxiety for both customers and employees, and a consistent face becomes incredibly important. As your exit date approaches, have your second in command step in and become familiar with all of your contacts.
As a business owner who has worked so hard to establish your business, it can be easy to overlook the plan for stepping away. By considering your exit strategy now, you are able to open up the opportunities that will be available to you when the time comes to retire. At FocalPoint Business Coaching of New Jersey, we specialize in helping business owners plan for the future of their companies. Let’s get started today.