It’s hard to believe Thanksgiving is just days away (or maybe already in the rearview mirror, by the time you catch your breath and read this).
Thanksgiving is my favorite holiday and always makes me stop to reflect on all I have to be grateful for, from the people in my life, to where I live, to the lifestyle I enjoy — and also what allowed for these things. Where did luck play a role, what choices made a difference, and how did others’ support and talent enable a plan to come together?
Thanksgiving planning made me think that this is a good time for business owners to use the holiday to also take stock and to think ahead.
Taking Stock…
For an upcoming podcast I was asked to speak about how successful business owners avoid major selling pitfalls. One of the pitfalls I mention is the lack of a compelling company story, substantiated with credible evidence and data.
What better time to construct or update your company story than this time of year? Here’s what you do.
With a mindset of gratitude and appreciation, list what you and your business have accomplished this year and over the years. How might you explain it to a close friend? What might you recall about the people who helped make it what it is today? Don’t whitewash the story; there were hard times that you worked through. How did they make you stronger? How do they influence your company and your leadership today?
A company story consists of where you’ve been, what you’ve accomplished, and what the future promises. Of course it includes specifics too:
- Financial strengths and vulnerabilities (and mitigation plans)
- Growth potential and underlying assumptions
- Synergies of interest to a buyer, e.g., core competencies, IP, customer bases
- People, including bench strength and key technical talent
- Brief history including founding, growth milestones, legal entity status, etc.
- Selling objectives: why, why now, your goals for the sale
…and Thinking Ahead
Whether you are actively in the process of selling your business or thinking you should start planning for a possible transfer of ownership in ten years or so — you have a critical success factor to put in place NOW.
Your company story needs the data and documentation that substantiates your value and makes your company story credible. The National Federation of Independent Business Owners cites the two biggest threats to an owner’s retirement (from a company sale) as 1) weak documentation and 2) owners’ business plans misaligning with their personal estate documents.
More than several owners I met in writing Exit Signs told harrowing stories of spending 24/7 weeks creating, recreating and organizing the documentation and data analytics that substantiate their value and company story. Chapter 7 in Exit Signs offers templates and tools to make progress on this task.
Here’s an illustration of one way to check your ability to substantiate your company story:
Giving Thanks
At this time of the year we have a choice of mindset. We can look at the proverbial glass as half-full or half-empty. I am going to look at what is right in my life, in work, and in the people I enjoy.
At this, my favorite time of year, it makes sense to me to take stock in the story we have to tell about the history, successes and the opportunities ahead for our businesses, whether small sole proprietorships or large private corporations. Knowing the story we want to tell, we can then ask what a likely buyer might ask: “Show me the data.”