… failing to realize the importance of a strong balance sheet, which defines the health of a company and is critical if you want to grow the company or do any kind of organic or acquisition growth. The other thing is that there’s no plan. They assume that hard work will somehow translate to a big check.
CP: Are you going to share a road map with the session attendees?
AS: I’m going to provide a way for business owners to calculate based on an estimate of what they need to be able to exit compared to what they have, what the gap is, and then help them think through what they’ll have to do and the number of years they have remaining to get the business to the point where it will meet their needs to exit comfortably.
There’s a worksheet to help them think through — what’s their wealth and personal wealth target that they need to accumulate and how does the business fit into that; and what does their business have to be worth for them to get there. Based on the gap that exists – and there’s always a gap – what has to happen in the seven years to get the business to a place it needs to be by 2025 so they’ll have the money in place to retire?
Every business is going to transition. You’re not going to take it with you, and the sooner people begin to run their company with that in mind, the more likely they are to have a successful exit.