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You’ve owned your business for many years. You’ve built it from nothing to where it is today. You enjoy going to work each day and receive a great sense of satisfaction from the daily accomplishments of the business. But now it’s time to sell, or at least develop an exit strategy. The problem is “You” are the business. All of the customers, suppliers, and employees know that you make all or most of the decisions. You spend your day in the weeds and micro-managing as opposed to focusing on the bigger picture of how to improve and grow the business. This creates a big problem for a buyer. First, the buyer is obviously concerned about how much of the business is due to the customer’s relationship with the seller (how many customers will leave when the seller leaves?). Second, the buyer will have the same concerns with the suppliers. It also devalues the business if a buyer thinks that he or she is going to have to be there every minute to make every decision. Most buyers will not be interested. Here’s the test. If you can’t leave your business for 30 days, take a trip with your family and have minimal contact with the business, then you have a “JOB” not a “BUSINESS”.

The solution? Simple. Empower your people and work toward reducing the time you spend on daily operations. This may be difficult at first. I suggest that you stop every couple of hours (set an alert on your phone or watch) and ask yourself if what you are doing at that moment is where you should be spending your time, or could someone else handle the task at hand? Allow your people to become the face of the business. Now your focus is thinking strategically. By removing yourself from the day to day operation of the business, you can now work on plans to grow sales, improve gross profit and possibly even develop completely different profit centers. In our work, we see hundreds of businesses. Without question, almost all of the extremely successful businesses we see, whether measured by sales or profits, are owned by strategic thinking owners. When an owner first starts a business, they typically wear every hat and make every decision. However, if 5-10-25 years later, they are still functioning that way, they often struggle to grow the business and may eventually go out of business. Every owner has events and problems occur daily that could pull them into the weeds. As the successful owner grows their business, they gradually add or empower people to handle these daily issues so they can eventually transition to focusing on strategies to grow and improve the business.

Owners should spend at least 80% of their time thinking at a high level. The questions they should be asking themselves are:

• How can we be better today than yesterday?
• How do we find new accounts?
• How profitable are the current accounts?
• How do we reduce our cost of goods?
• How do we reduce expenses? 
• What other products or ancillary businesses can we add?

There is a great sense of accomplishment when you are working in the weeds with your people, but it is certainly not the best for the business or your people. We can not emphasize enough how much this change will increase the desirability of your business to potential buyers, and more fun for you too.

Whether you are considering selling your business today or 3 years from now, it’s important to understand how buyers and bankers will view the business, and how you can get the most value when the time comes.