A wise business owner understands their company is an entity that should stand alone & succeed even if they are not at the helm
Louisville, KY (PRWEB) March 20, 2012
American Fortune announced today the two most common and most conflicting strategies for running a business and planning for its future. On the tails of this announcement, Brian Mazar, CEO of American Fortune Mergers & Acquisitions, also released his suggestions for owners who want to sell a business and currently fall into one of these two strategies.
A wise business owner understands their company is an entity that should stand alone and succeed even if they are not at the helm. Making a business thrive independent of the owner takes planning and preparation. Will the company crash and burn if leadership changes?
There are two common strategies business owners employ: the “Plan for the future” strategy and the “I’ll worry about it later” strategy.
What follows are the top statements one would make if they are a “Plan for the future” strategist with their business.
“I can prove how much my business is worth.” Owners who regularly update a Certified Business Valuation keep their focus on the pulse of productivity and efficiency. Business Valuations expose sensitive spots where cash flow is falling through the cracks. Knowing a business’s short-comings gives a company the opportunity to fix them.
“I have reviewed or compiled financial statements provided by my CPA.” Yes, indeed, QuickBooks and such programs are helpful, but limited in their capabilities. A CPA provides guidance and an unbiased paper trail that keeps the company accountable. Make sure the business maintains the last 3-5 years of reviewed financials.
“I know exactly who will take over my business if I am incapacitated tomorrow.” Life happens. Divorce, emergencies, illnesses, and death. Wise business owners acknowledge this and prepare their organization for the unexpected. The prepared business owner knows exactly what will happen to their business, who will be in charge, and how changes will be handled.
“I make my own decisions, but I rely on professionals to show me my choices.” Surround leadership with a great accountant, merger & acquisition advisor, financial adviser, attorney, etc. and be mindful of the difference between a good and a great professional. A good professional will state what could happen as a result of certain scenarios. A great professional will point out several options, note their consequences and state the things that are hard to accept.
Many business owners are so busy that they forget to take the time to plan ahead. These owners adopt the “I’ll worry about it later” strategy with their business. Below is some of their thinking.
“I think I know how much my business is worth.” A potential buyer will ask questions until they know what the business is worth. Don’t wait for a firing squad to answer these questions. Know them in advance and have them documented in a certified third-party business valuation.
“Profit & Loss statements are printed off of my bookkeeping software.” P&L statements from standard software programs won’t maximize your bottom line. The sooner a CPA is involved the quicker a company’s value increases.
“I don’t need a Succession or Exit Plan.” Ahhh…the immortal owner. They will never die; therefore there’s no need for a succession plan. We meet the spouse of this “immortal owner” when they approach us to sell the business after the owner has a serious illness or died and the company has lost significant value. Don’t do this to your loved ones. Plan ahead.
“I won’t do anything unless my accountant gives the go-ahead.” If the company’s advisors are making decisions, fire them. There are too many overly-paid naysayers who will find problems in any scenario. Everything carries a risk. Find someone who will explain the risks and rewards to you in a real and unemotional way.
For those who work with an owner that “plans for the future,” congratulations. The business is on track and leadership is thinking about the right things. If, however, the “I’ll worry about it later” strategy is more commonly mentioned in the workplace, work needs to be done. But, take heart that it is never too late to better position the company for the future.
American Fortune Mergers & Acquisitions, LLC is a nation-wide firm that provides services in the areas of growth-to-exit planning, mergers and acquisitions and business valuations for businesses with revenues between $3 million and $100 million. American Fortune was founded by industry veteran Brian S. Mazar who developed a unique buying process that is sell-side driven. Due to this process, American Fortune successfully sells their businesses at an average of 98% their listed price.