We recently shared with you how owners can control their exit and not let their exit control them. We highlighted the foreword to the book Poised for Exit by Julie Keyes, which was written by Sunbelt Business Advisors and True North Mergers and Acquisitions CEO Chris Jones. If that sparked your interest, here is the full foreword from Chris.

If after reading the foreword you’re ready to learn more about planning your future beyond ownership, please email msilasiri@tnma.com to request a complimentary digital copy of Poised for Exit.

Foreword – Poised for Exit by Julie Keyes

Written by Chris Jones, CEO – Sunbelt Business Advisors and True North Mergers and Acquisitions

This book could change your life as a business owner.

For over twenty years, I’ve been helping business owners exit their companies. I wish every one of them had read this book before they were ready to exit.

As a business owner who also sells businesses for a living, there are a hundred things I would prefer to do before exit planning. I’ve got a business to grow, clients and employees to support, a business to win, and fires to put out. Most importantly, I have a family to care for and a life outside my business.

So, hopefully, our dear author Julie will forgive me when I confess that I don’t want to do exit planning.

But I do it anyway because it’s so critical to my future, my family, and those same clients and employees.

You can control your exit, or your exit can happen to you. I prefer the former. I prefer understanding all my exit paths and picking the best route to realize my personal and financial goals.

Too often, business owners allow the urgent to swallow the important. What could feel less urgent than an exit at some future date that has not been declared? Or personal and financial goals that have not been clearly defined?

I challenge you to read this book, and when you are done, write down what life after business ownership looks lie. Julie calls it “Life 2.0”. Then do the next hardest thing – tell someone! As business owners, we can be incredibly isolated. You aren’t going to share Life 2.0 with your employees, customers, and suppliers. But tell an exit planner like Julie Keyes and ask her to hold you accountable to your personal and financial goals. If you are feeling particularly brave, ask her to make you uncomfortable and challenge you. 

As CEO of the largest business brokerage and M&A firm in the country, I’ve seen firsthand the enormous benefits enjoyed by business owners who invest in exit planning. The business becomes less dependent on the owner, key employees become leaders, revenue visibility improves, processes are refined, products are rationalized, margins increase, focus improves, and culture improves. The owner learns how to look critically at the company’s strengths, weaknesses, opportunities, and threats.

This SWOT analysis is a major part of how business buyers look at value. If you want to know how valuable something is, you ask the market. In this same way if you want to know what a business is worth you ask the market of business buyers.

There is nothing quite as powerful as looking at business value through the eyes of a buyer. Thinking like a buyer forces ownership to soberly assess risk and growth opportunities. The value of your business is the ultimate scorecard because it considers everything the enterprise does. Business value is a combination of quantitative measures, such as profitability. And qualitative measure, which are often referred to as “value drivers.” Once you understand your baseline business value and what impacts business value, you have an amazing opportunity to focus on value growth. You’ll possess a powerful piece of baseline data that you can measure against every year. Is my business more valuable than it was a year ago? Every business owner should be able to answer that question instantly.

I’ve also seen the cost of avoidance. Ready for some tough love? 

• If you plan to transition the business to your kids, business partner, or key employees, they could be taking over a business that is not exit-ready, increasing their chances of failure.
• You could die in your business, and the business doesn’t survive your passing because you failed to plan. 
• Enormous amounts of money are left on the table in a sale.
• You fail to sell entirely because your business is not ready.
• Your Net After Tax proceeds fall short of what’s needed to fund your next chapter. 
• You regret selling because you didn’t have a real exit plan,

Here’s the real sinister cost of avoidance: The business owner becomes complacent because the business “has arrived.” Complacency seeps into the culture. The growth mindset fades as the company’s revenue and profitability slowly wane. The company has lost its mojo.

Perhaps the business is debt-free, and the business owner also owns the real estate. Therefore, even with declining financial performance, the business owner is still making decent money. It’s still a profitable business. But the company’s value is plummeting, and ownership’s chances of a successful exit are fading.

Fellow business owner, business value is the ultimate accountability partner. Like the scale at the doctor’s office, it doesn’t care about your feelings. It just gives you the facts. Like a doctor, an exit planner helps your business become so much healthier. 

I’ll leave you with this. A friend was recently sharing his favorite investments with me and how he was doing in the stock market. He showed me the green and red box charts of his top investments. He knew exactly what these stocks were trading at. He also happens to own 100% of a successful, privately owned company. I asked what a share of his company was worth. He had no idea and looked at me like I was crazy.

I encourage you to begin with the end in mind. After you read this book, take action. Write down what you want for Life 2.0. Share it with your trusted advisors. Engage an exit planner to hold you accountable. 

Get a baseline of business value from an exit planner, M&A advisor, business broker, or certified appraiser. 

Then, get to work on not just growing your business but also growing the value of your business. 

Even if you plan to die with your boots on, exit planning will make your business so much more successful and enjoyable to run while you are still vertical. 

The work you put into achieving Life 2.0 will make the life you are living today, Life 1.0, so much better!