Ensure having the right focus to prepare for successfully selling your company one day
People talk about New Year’s resolutions this time of year which for company owners and CEO’s, should include thinking about the focus for the year ahead for building their company net worth.
Whether by yourself or with key advisors or executives on your team, here are questions every private company owner/CEO should be giving strong consideration to:
- Did my team build company net worth (enterprise value) in the just finished year – is my company worth more today than it was worth a year ago? Where did we do well in this area and where did we not so we can address this in the new year?
- Am I clear on what will drive up the net worth of my business in this new year? Strengthening our financial performance is certainly a key element but how about steps we are taking to make our company stickier with customers, increasing the predictability of revenues, improving the productivity of your organization to enhance margins, strengthening the culture of our team, etc, etc.
- Am I clear on what a future acquirer will expect to see when the day comes they kick our tires – am I building a business that will excite them when they start looking closely at it?
- Have I identified with my team our top 3 to 5 strategic areas of focus for this new year? And do these areas bridge to helping us build long term company net worth?
- What is my business worth today (to an acquirer) and is there a gap to what I’d like to receive one day when I decide to sell?
- If there is a gap between what my business is approximately valued at today and what I’d like to one day sell it for, what are the top issues causing this gap? And do my strategic initiatives for this new year help me address these gaps?
- Do I have the right people in the right roles with the right focus for helping me build company net worth?
- Do I have the right incentive plan in place for key managers on my team to ensure they have the right focus in this new year for helping to build company net worth?
These are just some of the questions we help clients think through on a regular basis. Step outside of the daily tactical aspect of leading your team and ask these questions to ensure you’re not confusing motion for actually making progress. We always say that owners/CEOs should use time as their friend in preparing their company for a future exit event that will make them euphoric. Addressing these questions will have you thinking and talking about the right areas that will help you one day achieve your personal euphoric outcome.