SUCCESSION PLANNING by Jessica Fialkovich LALAKA / Shutterstock.com How Women Founders Can Plan a Successful Exit Strategy It’s not always easy letting go of the business you’ve nurtured to success, especially if you’ve taken it from disruptive startup to market leader. Even thinking about it may feel counterintuitive. But crafting a smart exit strategy that can take you out on top is a critical stage of business development. It is, after all, a business – not a child or a friendship, even though we sometimes use those metaphors – and the owner’s job is to make it so successful that they can earn a handsome profit when selling it. The time to exit is not when you’re burned out, which was one of my primary motivators when I sold my first business after three profitable but hectic years. I was just 24 years old when I started my wine business. It was successful, but by the end, I yearned to return to my more familiar niche in professional services. In my current role as founder and president of a company that helps owners maximize the long-term value of their business, I’m sometimes amazed at how quickly I was able to sell that first business. Bringing a business to its most profitable condition takes time, patience and willingness to ask for help, which can be the most challenging skill for many independent-minded entrepreneurs to learn. 5 simple truths entrepreneurs need to know about letting go 1Being super CEO is bad for business. Are you running everything from operations to research and development? Women tend to take on many roles because they know they’ll get things done. However, playing Super CEO can result in a lower valuation or no sale at all. Buyers want to know your company will remain successful without you. Start developing new leadership talent and delegating critical responsibilities to maintain profitability and protect potential sales. 2Developing an exit strategy is a team sport. You’re an expert on your company but marketing it as a viable investment to prospective future owners takes a different set of business muscles. As hard as it might be to ask for help, you need a team of professionals who know what the business should look like to attract the best offers. Start with an exit strategist and have them work with you to assemble the right players. 3You’re still in charge. Don’t let the team’s expertise intimidate you. The team is there to consult and recommend, but the goal you set for your exit and the decisions about what to do are yours. Listen to their advice and take it seriously; make sure they give you solid data to justify any actions. If you disagree with their recommendations, don’t accept them. 4The sooner you start, the better the offers. This is where long-range planning skills pay off for owners who want to exit successfully. It takes time to nurture a business until it’s ready to have you step away and let it grow without you. Unless you’re facing unexpected circumstances, take the time you need (it could be years) to maximize the value of the company. Use your exit team to develop a clearly defined strategy with realistic benchmarks that include revenue, profit and leadership goals. Review the plan regularly and update it if needed. 5Everybody needs a backup plan. In business, everything can change in a moment: people, markets, the broader economy. Your exit strategy must include a backup plan that can be activated in case of developments like transition team changes or new products come along. Bottom line: value Designing a business to achieve maximum value doesn’t just pay off when it’s sold. A company with a solid leadership team and efficient operations commands maximum price – and who wouldn’t want to own a company like that, even without immediate exit plans. JESSICA FIALKOVICH is the co-owner of Transworld Business Advisors with locations in Texas and Colorado, and founder of Exit Factor. Connect at www.jessicafialkovich.com. 44 enterprising Women
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