10 Benefits of Having an Exit Plan
Benefit #5 – How More Free Time Adds Value to Your Business
Another major advantage of working through a longer term exit plan is that ultimately you will end up with more free time.
As you do your research and consider what your business may be worth you’ll notice that businesses that are the less reliant on the owner can command a higher multiple and higher asking price.
If you’re currently working long hours and your business is totally reliant upon you then you have to have to question how attractive your business is to buyers.
Looking through a buyer’s eyes is your working week attractive from the outside?
If you can prioritise time to work through a plan to really analyse your team, your management and your impact on the business you will most likely be able to identify ways that you can back off a bit and get the business running successfully without as much physical input from yourself.
In my experience most people who have not done this think it won’t apply to their business the old saying “You can’t read the label from inside the jar” rings very true here.
Taking time to work through this could not only significantly impact the value of your business but it can also have a very positive impact on your personal life.
This part of the exit planning process is one that I find the most rewarding, generally speaking, if a client is going to change their mind about selling the business it’s usually after completing this part of the plan.
It’s very difficult when you are caught up in the day today running the business to see the full picture, in this situation you can easily feel as if the business can’t survive without you. Back in the day I remember feeling that if I was not there everything would fall apart, if I was not behind the counter the customers wouldn’t come in, if I wasn’t on the coffee machine nobody would buy coffee and so on.
This is very common and this is you then you are not alone!
If you can try and create some space to step back, take a breath and think strategically about how you can gradually remove yourself from day to day operations of the business you may be pleasantly surprised to find that it’s not just something people other people do, your business can actually do this as well.
Its not unusual for me to talk to people who are working 50+ hours per week in their business on the floor, many people are working much more than this.
When you are caught up like this is very difficult to be working on your business effectively, in this situation some of the key numbers and key metrics can slip and you end up working more for less.
During the first few years of business in my cafe I was focused on the wrong things and was working way too much in the business.
I was so focused on a revenue goal and on saving money on wages that I took my eye off the really important numbers of the business, at the end of a year although I hit my revenue target because my food cost a blown out and I miscalculated the wages I actually ended up losing money that year. It took me the next couple of years to recover financially from that, another one of my expensive life lessons.
From that point on I applied a different approach, although I had a bookkeeper and accountant I made a point to learn my numbers, set budgets and track KPIS religiously, something that I continue to do to this day.
If you are not fully across your numbers then you can easily slip into making the same mistake that I did, I really want this post to try and help you prevent that from happening.
There are a lot of sayings and phrases about how you should spend more time working on your business rather than in your business. Whilst many of these are a bit cheesy there is actually a lot of value to the concept and to the thought process.
How much time do you spend working “On” your business each week?
If you get too caught up in the day today as I did you can easily lose track of what’s really important, try not to fall into this trap but if you do then remember you can escape but it’s up to you and nobody else.
By freeing up even a little time to start working on your exit plan you will be surprised how different you can feel about your business and your role.
Focusing on the value of your business, especially on a strategy to increase that value
is an important first step to you gradually and methodically stepping back from your day today involvement in the business.
Once you understand the increase in value that can be achieved by having a strong well engaged team in place you will find extra motivation to help you to take the steps needed to action this.
Try to step back and create a bit of space for yourself allowing more time to look at the current team that you have. Work out where you might need to make changes, if you need to recruit more people this will allow you more time to think through that recruitment process. Time working on the business in this area will help you to put better structure behind the systems for advertising, recruitment, onboarding, training and retention of your team.
With tasks like this it’s really easy to think that you’re not working. I’ve often been guilty of this myself where I am working on systems and processes and thinking more this is not real work. You almost feel guilty and that you should be doing something else. You need to try and push through these feelings and stay focussed on the end goal.
Even a small amount of action in this area can have a big impact on how you feel about your business, if you have been too caught up and not been able to do this then give it a try.
I find the best way to do this is to block out time to spend working on the business, this is time that you should not allow to be taken from you, make it non negotiable. If you are likely to get distracted and you don’t think that you can do this during working hours then make time either first thing in the morning or after you close.
The trick here is start slow, set aside some time and focus just on one area of your business that you feel would benefit from more attention. Once you block this time out and just focus you will be surprised about how much you can get done in a short amount of time.
Depending on what you need to work on first will determine how you approach it, I have found that with bigger tasks such as ops manuals, training docs, large marketing projects etc it’s easier to plan them out and action something every week. Once you start seeing progress the momentum will kick in and you will get through it quicker than expected.
Don’t let the thought of a finished version of a large project stop you from making a start, break it up into smaller chunks and just do a bit each week or whenever you can block out time.
I hope that this helps you to think about how you might be able to step back and work on a plan to release yourself from some of the day to day operations of your business. This does not happen overnight and like most things in business is just a process, it starts with you taking one step in the right direction.
As always, if you have any feedback, comments or experiences to share about this topic feel free to post in the comments below.
If you would like to find out more about how we can help you to execute a longer term exit plan in your business then get in touch, I am always happy to talk about this.
Have a great rest of the week.