The hidden goal of the smartest business owners
Here are five reasons why building enduring value should be your most important goal, regardless of when you plan to push the eject button.
Enduring Value is personal freedom
As long as your business is dependent on you personally, there’s not much enduring value. Make your business less dependent on you by building a management team and creating systems for employees to follow. Think of the world of possibilities that would open up if you could choose not to go into the office for the next month.
Businesses with enduring value are more fun
Most business owners spend the majority of their day on mundane tasks: government forms, employee performance reviews, bank reconciliations, customer issues, and production problems. The boring details of company ownership can suck the enjoyment out of owning a business—and it is these kinds of tasks that you should delegate to someone else if you want to build enduring value.
Enduring value means financial freedom
Each month you check your investment portfolio statement to see the current balance and perhaps to make adjustments. But your most valuable asset, your business, does not send you a statement every month. You must understand the eight drivers of value and track your progress towards achieving a business with enduring value, one that can be liquidated one day, just like your stock portfolio.
Enduring vale is a gift
Passing control of your business on to the next generation is a valuable gift when you plan well in advance and ensure your successor has the capability to assume the new role. If you choose to sell to a third party, buyers pay more and are more likely to make an offer if there is already a capable management team in place.
Building Value takes time
Making your business valuable often requires significant changes; and a prospective buyer is going to want to see how your business has performed for the three years after you have made the changes required to make your business sellable. Therefore, if you want to exit in five years, you need to start making your business valuable now so the changes have time to produce results.
Are you curious about how valuable your company is and what you would need to tweak to sell it when you’re ready? Then it’s time to get your Value Builder Score. It takes about thirteen minutes and your responses are completely confidential.