“Begin With the End in Mind” is one of the 7 Habits of Highly Effective People that Stephen Covey spells out in his iconic bestseller. In its most basic form, it means always having the image of life’s “end-game” as a framework for evaluating everything else. More simply, beginning with the end in mind means to think about how you would like something to turn out before you get started working on it. The vision that emerges from such reflection brings much needed clarity to the choices that are made during the journey to a timely and profitable exit.
For business owners, the “end in mind” habit is critical, considering that your business is highly likely to be your most valuable asset at retirement, and is thus key to a timely and successful future. Practically, beginning with the end in mind might be described as consciously weighing key elements of your exit plan into account before investing countless hours and money to build a successful business.
If you are working to build a profitable commercial enterprise i.e. a business with employees and other tangible and intangible assets that will be valued in the market at the time of exit, here are some essential features that buyers value in an acquisition that might help shape your vision for an exit plan that will help you begin your journey with the end in mind.
- A business that works without the current owner
- Well-functioning and documented systems
- Consistent profit growth
- Well organized and accurate financial records
- A diverse list of loyal customers that will remain after the sale
- A strong brand
- No lingering or complex legal issues outstanding
- Highly functional assets including IT systems
Particularly with reference to item #1 above, in his book, Built To Sell, John Warrillow states that “…the #1 mistake entrepreneurs make is to build a business that relies too heavily on them. Thus, when the time comes to sell, buyers aren’t confident that the company – even a profitable one – can stand on its own.”
We strongly encourage business owners to invest the time and money necessary to develop an organization that is highly functional without direct and ongoing operational involvement of the owner. This allows the owner to provide effective leadership to the organization and bring focused attention to, among other things, the features that are valued by buyers to maximize the efficiency and financial rewards at exit i.e. at the time of sale.
Consult with a coach for more information on how you can begin focusing on the end that you have in mind.