Over the past year, we have written about what it takes to own your own business. We reviewed what it takes to go from an idea for a business to formalizing and legalizing your business to the administration of your business. There is only one part left: THE END.
For those of old enough to remember, The End was a controversial song by a group called The Doors – Jim Morrison was the lead singer (the fact that I’m having to explain who they even were makes me feel VERY OLD!!). The opening verses remind me of the feelings an entrepreneur goes through when he/she/they dispose of a business. Others that are much smarter than me have spent years dissecting the lyrics of this song, so I’ll let you come to your own conclusions.
This is the end
This is the end
My only friend
Of our elaborate plans
Of everything that stands
No safety or surprise
I’ll never look into your eyes
My point, however, is planning and preparing for “the end” is key for any business but especially an entrepreneur’s business.
HOW DID YOU GET HERE?
Entrepreneurs are usually high energy, high emotion and wear their feelings on their sleeve. They put everything into their business. They often forgo other relationships because their biz is their baby. Thinking about what happens when it’s over is not something many want to do.
Why is this? Entrepreneurs planned for everything else – why not the end? As an entrepreneur, we have managed/grown a business that is:
- Respected in the community
- Added revenue and jobs to the community
- Provided disposable income for you and your family
- Paid for the education of others
More than anything else:
- Your business has survived.
WHAT’S THE FEAR?
Why not plan to have someone take over the business so that you can step back and see the beauty of your creation? Here’s the fear in one sentence:
The perceived value by others will not be your perceived value.
The first time someone tells you what they think it’s worth and what they will pay for your “baby,” you feel
Then the entrepreneur gets
After an entrepreneur realizes that their biz isn’t worth what they thought it’d be, they become
And finally, the entrepreneur comes to terms with the real value and reaches
The bottom line is that a succession plan is necessary for your business to complete the cycle. More so than that, your family deserves it. This is very important, so I’ll repeat this last phrase: YOUR FAMILY DESERVES IT.
T H E P L A N
When we talk with entrepreneurs that are starting a business, we ask the following questions:
- What are you selling?
- Why should I buy it?
- How do you fund it?
- What does the end look like?
Believe it or not, knowing the end will guide you from the beginning. If your exit strategy is short-term, then pump up the volume. If your exit strategy is long-term, then build a quality process that is tried and true. If your exit strategy is to pass it on to your employees, find the good ones and do whatever is necessary to keep them. Regardless, knowing The End will not only help you from the start, but it’ll also take a heavy weight off your shoulders. If you are an Entrepreneur, you are already nodding your head because you know what I’m talking about.
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This concludes our series on The American Dream. For the complete series, please visit our web site www.LesemannCPA.com