Did you know that the earliest recorded solar eclipse occurred on October 22, 2134, BC?! The solar eclipse that passed over us August 21, 2017, was fascinating and I hope you got to witness it. After all, they don’t happen every day. But if you missed it you can check out this handy tool that will tell you how many more eclipses there will be in your lifetime. Cool!
Some would require a bit of travel, but the next one that will occur in the US will be on April 8, 2024.
Being located in NoCO (northern Colorado) had its advantages as we were just south of the path of totality. I didn’t have to look at my clock to know that the eclipse was about to occur as it was noticeably getting darker in my office, to the point it felt like I had sunglasses on. I didn’t have the recommended ISO glasses, so armed with a note card with a hole punched in the size of a No. 2 pencil and a piece of paper I went outside being ever so careful to resist the temptation to look at the sun – “you’ll burn your eyes out”. I carefully lined up with the sun behind me and projected the eclipse onto the paper on the ground! WOW! This brought back childhood memories of doing the very same when I was in school. Yes, our teachers used this as a learning exercise, instead of locking us in the classroom!
Did you travel to Wyoming to witness the eclipse or stay home? I would love to hear about your experience!
Planning a transition from your business can sometimes feel like a solar eclipse – being in the dark! With the help of my Transition RoadMap® I work with business owners to find the right path to their successful transition.
Last month I introduced you to the 5 stages of the Transition RoadMap® and Stage 1: Developing Your Itinerary. If you missed this newsletter you can read it here. The Transition RoadMap® is specifically designed to help you begin thinking about your business as an outside investor would. You will learn how to align your personal, business and financial goals in order to maximize and extract value from your business. In this newsletter, we will take a look at the next two stages.
Stage 2: Preparing for Your Journey
Stage 3: Mapping Your Strategies for Success
In the next newsletter we will cover the final 2 stages of the Transition RoadMap® :
Stage 4: Preparing for Departure - Coming Soon, Stay Tuned!
Stage 5: Arriving at Your Destination - Coming Soon, Stay Tuned!
By breaking down the transition from your business into “single steps”, you will be able to do the difficult, making them look easy...
Let’s look more closely at Stages 2 and 3.
Stage 2: Preparing for Your Journey
Now that you know where you are today and where you want to go (Stage 1) it is time to begin preparing for your journey. Much like planning for a trip, you need to be prepared. If you are like me, you might make a list of things you need to do before you leave (pay the bills, arrange boarding for your dog) and make a packing list (fishing rod, waders, clothing, food). Even if you don’t make a handwritten list you mentally prepare. You wouldn’t take your skis, for example, if going on a beach vacation. Preparation is key. So what does that look like when it comes to exiting your business?
Building on the information gathered in Stage 1 and the personal and business needs, we begin looking at your business and determining current needs. First and foremost, we want to protect what you already have. This is done by identifying areas of risk. Examples of risk include, but are not limited to:
Business risks (planning, leadership, sales, marketing, people, operations, finance and legal)
Personal risks (insurance, contingency plans)
Financial risks (estate and income taxes, asset allocation, and retirement needs)
Once identified, the risks are ranked in order of highest risk and greatest importance. You have spent years working hard in your business and building the business to what it is today so it is important to protect your business and your family.
Preparing for your journey and de-risking your business should be part of your overall business strategy whether you plan on transition out of business or not – it is just good business. The benefits of “de-risking”, include
Value enhancement (more on this in Stage 3 and coming newsletter)
Peace of mind
I don’t know about you, but those benefits sound pretty good to me. How about you? Would you have better peace of mind knowing you had eliminated risk for your business and family AND added value to your business?
Now that you have prepared for your journey (packed you bags, so to speak), you are ready for Stage 3: Mapping out Strategies for Success.
Stage 3: Mapping out Strategies for Success
Up to this point you have learned where you are today and prepared for your journey by protecting what you have. In Stage 3 the primary objective is helping you maximize value from your business in the most efficient manner and while meeting your overall goals and objectives. This is exactly the time when we “do the difficult things when they are easy.” This is done through a combination of:
Value enhancement opportunities, and
Strategic planning
Whether wanting to sell your business for top dollar or extracting value in the interim, there are steps that can be taken now to enhance the value of your business to you and prospective buyers. Once again, we build off of the information gathered in Stage 1 and identify the areas that will have the biggest impact and take the least amount of effort to implement. This is done using the following steps:
Identify and prioritize value enhancement opportunities,
Put specific strategies around the opportunities identified, and
Identify key people involved (including outside advisors)
This process is repeated until both goals and objectives have been met, the desired value is achieved, or all value enhancement opportunities have been identified and addressed. Why wouldn’t you prefer to maximize and extract all the value you can from your business?
Value enhancement opportunities can be easy to implement or difficult, which is why we evaluate those that will drive the most value to you, your business and your family. But by breaking them down into smaller tasks we are able to see immediate results, de-risk the business and put in place a lot of the things in place that makes the business more valuable to a potential buyer.
Stay Tuned!
Next month we will look at the final Stages in the Transition RoadMap®.
Have a great month!
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ETS Compass is my personal newsletter that provides thought-provoking topics and helpful guidance to business owners looking to navigate change in their businesses. Whether it is value enhancement or transition planning, it is my goal to educate you.
My goal is to provide useful and purposeful information to you that may help you transition from your business.
Author: Sheryl Brake
Sheryl is the CEO and Founder of Encompass Transition Solutions, LLC and former partner of a top 25 national accounting firm. She has been working with business owners in a wide variety of capacities for more than 30 years. Sheryl lives in her home state of Colorado with her husband, Michael.