You can download and read the Feasibility Report for a regular fine food and local produce market in Ilkley here.
Exiting you business is not an event, its not all about the “deal”. Good exits depend on your strategic thinking before the deal, and the new purpose of your life after the deal.
In the UK, as business owners we still generally tend to shy away from talking openly about “Exiting” or selling our businesses. Yet the growing ‘entrepreneurial’ mindset across businesses means we need to bring exit planning into the mainstream. And certainly, breakdown the association of Exit Planning with retirement.
In fact there is a growing association between entrepreneurship and early exit. So, exit planning becomes part of the business start up phase – truly starting with the end in mind.
Despite our preoccupation with the excitement and hype of the “deal”… there are four stages in the exit process, and doing the deal comes not first or second, but third, according to research conducted by Bo Burlingham, author of “Finish Big: How Great Entrepreneurs Exit on Top”
What little we do hear about entrepreneurs exiting (selling) their businesses is often hype and spectacle; tech start-ups that sell for billion’s 18 months after starting up.
It’s almost always about the deal. The numbers. How much someone “cashed in” for. We are rarely exposed to the details of a “normal” private company sale, and we don’t hear about what comes before the sale… or after it.
Bo spent five years researching the real life experience of over 100 business owners who had recently “Exited” for Finish Big and determined that there are four distinct phases to a successful exit.
· Stage one is exploratory. Learning what options exist, and deciding what you do and don’t care about in an exit. It may also include coming up with a number—that is, the amount of money you feel fairly reflects the effort and risk shouldered by the business founder.
· Stage two is strategic. It requires learning to view your company as a product itself, not just as a deliverer of products or services, and then building into it, the qualities and characteristics that will maximise its value. And also allow you to have the kind of exit you want, and that is also good for those left behind ie a strategic buyer whom sees the inherent value in the businesses people, its culture, know how and its systems and processes rather than seeing the business as just assets and cash-flows.
· Stage three is about execution. This is the deal stage, whatever type of exit you may be developing. It could be a sale to an institution, sale to a trade or strategic buyer, Management Buy Out, hand over to family member, or even hanging up the proverbial “gone fishing” sign. There are lots of options, all with up and down sides.
· Stage four is the transition. It begins with the completion of the deal and ends when you’re fully engaged in whatever comes next.
Until you’ve moved on—not just physically but psychologically—to a new venture, a new career, a new purpose, your exit isn’t complete.
Each stage is unique to each business owner, but the important message is to appreciate that all four stages exist and you will go through them all. Whether it’s before or after your exit is up to you.
The research quite painfully illustrates that if it is afterwards, most business owners, almost 70% in fact, look back with “profound disappointment and regret.
The experience of stage four of the process: the stage of transition into the next phase of life for a business owner who has exited his or her business, is dramatically improved by an early focus on the first two stages.
So business owners who exit fall into two groups after the exit; those who were exhilarated and proud of the exit, just over 30%, and those who were left feeling lost, confused and bitter, just under 70%.
This seems to come from the amount of none financial benefit we, as business owners, draw from our businesses. “Purpose” and identity is a massive part of what a business owner derives from their company.
Often the business created a sense of achievement and recognition for the owner or leader, which after exit – disappears suddenly and can be difficult to immediately recreate after the sale.
If this challenge is anticipated, prepared for and there is a sense of personal anticipation about the future, then business owners can move on successfully. If they are prompted to look back by regrets or by a lack of preparation they can become ‘stuck’ in limbo between the past and the future.
Having a financially and personally successful exit is surely worth the effort?
Andy Hartley is a facilitator at The Alternative Board (Bradford West) and works with small and medium size business across the region to help business owners achieve greater business and personal success. If you would like to get in touch please call 07816 272762 or email AHartley@TheAlternativeBoard.co.uk.
Andy will be one of three expert speakers at a Free Exit Planning Workshop on 15th March at the Midland Hotel in central Bradford. Get in touch to find out more or Register Here.