Remember when summer vacation was about to end and going back to school was just around the corner? Summer sure went by fast. By late August it was time to check the back-to-school list, which “back in the day” was pretty simple: clothes and supplies.
My family didn’t have a lot of money, so new school clothes were few and special. Always a pair of new shoes, a new outfit for the first day or two back, new socks, maybe a jacket and a few shirts. I didn’t have older siblings, so if I had grown much, it was an expensive shopping day.
Way back in elementary school we brought our school supplies in a cigar box: pencils, erasers, pens, scissors, crayons, and a small ruler. Picking out that free box from a local store was a big deal. I remember the cigar smell perfectly. Funny how this time of year can so easily pull us into past times.
You might be feeling your summer vacation also flew by, and here it is almost fourth quarter. It’s time to take out the back-to-business list of what you need to do to move into the last quarter of the year — or if you are on an exit path, another year of transition goals to review.
Let me propose two lists very much like the lists I had for back-to-school: talent review and a salability tune-up list.
A talent review is like an assessment of the state of your wardrobe for the coming school year.
The review starts with an honest look at how much you’ve grown in size and complexity. Think of it as standing in front of a mirror seeing that your pants are too short, and puberty has set in, altering the very shape of things!
And before you look at what’s in the closet, you also have to know what’s ahead. How has the world changed? What’s expected in this next phase of school, i.e., in our industry, markets, technology? How will the schoolwork and the activities change, i.e., what new capabilities or systems and processes will we need?
It’s then you are able to look in that closet at what you have to work with. What still fits, what needs repair, what’s so out of style as to be embarrassing if not useless, and finally, what do you need to make or buy? These are the same questions to ask about the profile of talent in your business. This talent review needs to happen every year. Then, you’ll need to make a plan to ensure everyone still fits and identify where there are gaps, given the next phase of the company.
(If you’d like some additional help with this list, my book Exit Signs: The Expressway to Selling Your Company with Pride and Profit provides a set of questions and tools to ensure that you have the bench strength to move into the next phase of your company life as well as into the next phase of your life as an owner.)
Salability Tune-up List
Having that list of school supplies to check off gives you the feeling you are equipped for the new school year. Things are lined up and ready to put in your desk. Business owners need a similar “prepared to go” list. With this list, your business will be set for you to exit with strong salability.
Salability determines how quickly your business will sell in your market. You’ve seen the salability lists: “21 most important factors in selling your business”; “Eight factors influencing the sale of your business”; and “The four factors that predict sales transactions.” They all include, as a rule, the following six factors. These are defined in detail in Step 4 of Exit Signs, with tips for ensuring they are in place.
- Growth strategy
- Financial and operating efficiencies
- Customer base
- Depth of management
- Assets including product pipelines and intellectual property (I.P.)
- Price and financial terms
As you look at the start of fall and the last quarter of the year, rate how complete and up-to-date each of these factors is. What needs to be sharpened, what’s still functioning well, what plans are missing in your cigar box of business management?
Finally, set up a process to continuously check on how these salability factors are progressing including accountabilities, improvement measures and frequency of reviews. Make it a regular report card.
I loved school. I loved the anticipation of it, getting everything ready, and feeling prepared. It must have rubbed off on me as a business owner, too. I loved building my team, working ON the business not just IN the business, and feeling prepared to leave it. Writing my book, Exit Signs, was a way to pass along my lessons learned.
Are you ready for back-to-school? What’s on your checklist?