Define Your End Game

It is my theory that it is unlikely that anyone can create a company and operate it for years successfully without loving what they do or at least enough of what they do to make it worthwhile.  At some point, however, we will all need to stop what we are doing and let someone else take over or close the company. Preparing long before the day comes will make the endgame easier.  

There are many considerations including is the company worth more as an ongoing entity or is it better to close the business and liquidate the assets.   

If you company is dependent solely on your labor and expertise, a dentist for example then all you may have to sell is the patient list. However, even here there are ways you can create equity in your practice. Most dentists once they build up their practice are married to a location or at least the town for fear that if they relocate too far the patients will lose track of them.  The location has value and a few changes might make the sale of the practice more valuable. Rename the practice so that is not relying solely on you name.  Dr. Jones, Dentist can be changed to Main Street Dentistry.  You can create repeatable systems and processes so that someone buying the practice can step right in without recreating what you have done.

If you have created a valuable company are you going to sell it? Give it to your offspring? If you prepare it to sell then it will also be a condition to give it to you child.

If you are selling it are you selling it to the employees, an employee, a stranger or competitor? Are you willing to finance the sale? If you are accepting payment over time it is even more critical that you create systems to succeed. If giving it to your offspring are they capable? Do they even want it? Will there be friction in the family that make a sale to outside parties more preferable? Second generation businesses often fail because the new operators do not have the ambition and hunger that the previous generation had.  

Begin to think about the end game. How will you get the most for you company and what can you do now to make that happen?

Original Material (c) Thomas Robinson