“One is never afraid of the unknown; one is afraid of the known coming to an end.” ― Krishnamurti
No doubt about it, these are challenging times for businesses and their owners. For some of you, this crisis is a “direct hit” that has endangered the continuity of your businesses. For others, it is a “shot across the bow” – a warning that it’s time to alter your trajectory. We have been given the ultimate ultimatum – change course and adapt the way we do business or suffer the consequences.
Ultimatums are jarring, scary, and difficult to negotiate. But here we are, and how we respond will make all the difference. Taking no action is deadly; it’s time to change your mindset, re-think, and rebuild your business with your exit in mind.
“Companies that outlast this crisis will have CEOs who can rapidly assess these new circumstances, recognize new patterns and opportunities, and act with urgency to take immediate action to pivot and restructure their companies. Those that don’t may not survive.” ~Steve Blank in a recent Harvard Business Review article -“A 5-Day Plan to Keep Your Company Afloat”
If you are like most owners, you are dependent on your business exit to achieve your personal financial goals.
You are now faced with rebuilding and maximizing business value before you can attract an outside buyer or transition it to your employees or family and gain your freedom.
We understand that in the fog of war, it’s often difficult to see your way out without guidance and support. Let’s look at the three phases for getting your business back on track while simultaneously figuring out your best options for getting out.
(1) Survive by Taking Action:
This includes quickly cutting costs, applying for government loan programs, monitoring cash flow etc. Blank sums up this phase perfectly:
“Your company’s survival in this downturn can be captured in a simple formula.
Survival = (speed of your understanding of the situation) x (the magnitude of the pivots/cuts/lifeboat choices you make) x (the speed of your time to make those changes)
Notice that the word speed appears twice. This is not the time for committees, study groups, or widespread consensus building. Even with imperfect information, the future of your company depends on your ability to make rapid decisions and start acting.”
(2) Emerge and Plan:
Right now many of you are still in a holding pattern, focused on surviving, but you also need to be thinking about your future and what you want and need to achieve with your long-term business exit.
You will need to understand your strengths and weaknesses today and make changes to improve the saleability of your business whether you decide to transition internally or to an outside buyer. This is a chance to take a good, hard look at your business and develop a growth and exit plan with your team’s input. You will need to think like a buyer to build value and resiliency into your business.
(3) Implement and Achieve Your Goals:
Once you have your plan, it’s time to re-tool your business and take advantage of new opportunities. You need a methodical process for delegating responsibilities, tracking progress, and holding your team accountable. Having a defined focus and knowing that you are making progress toward your eventual exit will help you maintain your personal energy and gain the momentum you need to achieve your goals. Your team and your business will emerge stronger, more valuable, and more sustainable in this new world.
Planning Is Critical
As Dwight D. Eisenhower famously said: "Plans are worthless, but planning is everything." It's the process of planning that’s most important, not the actual plans. Similar to a military engagement, we need to be ready to adapt and make new plans when things change. We've often said that planning for a business transition is a process, not a discrete event. The same can be said for rebuilding your business after one of the most devastating crises the world has ever seen. This will take time.
During the height of the Great Recession, we heard lots of baby boomer business owners declare: “I will never go through this again!” Most managed to stay afloat, and as the economy recovered and we entered a long period of prosperity, that sentiment faded away. Once again, we are all reminded that there are things beyond our control that can disrupt our businesses and our lives without warning.
The Bottom Line
Your chances of being able to sell, either to internal or external buyers, when your profits return, will greatly increase with a solid growth and exit plan.
Take control of your future and be ready to catch the economic rebound wave.
Don’t wait until it’s too late… again.
Find out more about how to emerge stronger, more valuable, and more sustainable in this new world by attending our upcoming business owner workshop: