Over the past few decades, the landscape of business literature has been dominated by the idea of entrepreneurs transitioning from working in their business to working on their business. The blueprint for this transformation, epitomised by Michael E. Gerber’s ‘The E-Myth,’ outlines a methodology to create a business that operates seamlessly without the constant involvement of its owner.
While much emphasis has been placed on building businesses that can thrive independently, there’s a critical aspect that often gets overshadowed – the graceful exit of the founders. The realisation that a business must be prepared for a seamless transition led to the understanding that, beyond working on one’s business, there’s a universal need to make it ‘exit ready.’
In this journey toward exit readiness, one of the major stumbling blocks is the lack of clarity on what lies ahead for the business owner after the exit. The absence of a clear vision often translates to uncertainty, which, in turn, jeopardises the entire exit process. Entrepreneurs, being inherently visionary, need a vivid picture of their future endeavors to propel them forward.
Addressing this need for a comprehensive exit strategy, we’ve developed the 21 Steps framework. This framework serves as a guide to ensure that a business is not only capable of thriving without its founder but is also prepared for a smooth transition in ownership.
It’s crucial to recognise that being exit ready is more than just a checklist; it’s about empowering business owners with the confidence that their life’s work will not only garner interest in the market but will also command a premium price without the burdens of earn-out requirements.
The issues faced by business owners during their growth cycles and exits are remarkably consistent globally. These owners share common aspirations:
- Getting the Most From Their Life’s Work
- Balancing Value Maximisation and Legacy Creation
- Leaving on Their Own Terms
One pitfall we often witness is businesses receiving offers without being adequately prepared for an exit. This reactive mode puts the owners at a disadvantage, leading to an erosion in price during negotiations. The due diligence process may unveil risks, resulting in undesirable earn-out requirements that can feel akin to a messy divorce when they are not met.
The 21 Steps serve as a proactive strategy, allowing business owners to drive the exit process from the front foot and leave on their terms.
