One Step Closer: A 2022 New Year’s Resolution You Must Keep

By Wayne Slavitt

With the arrival of a new year, it’s a common practice to make goals or resolutions, promising to make changes or to follow a better path. Unfortunately, for most of us, such resolutions last about as long as a plate of cookies left in the lunchroom (for those of you who can remember going to an office with a lunchroom).?

If you own a company, might I suggest a new year’s resolution that’s more momentous than losing those 30 pounds and more valuable than making your own coffee at home every day.

If you're looking for a new year’s resolution with a high yield, why not resolve to make 2022 the year you start working ON your company not just IN your company? If you're like most business owners, you are intimately involved in the daily activities of your company, spending a great deal of time at your business making decisions. It’s hard to not be reactionary when those bullets are flying around (and toward) you. The problem, of course, is that it’s hard to score points playing defense.

Scoring points—making progress—is critical to meeting goals, especially the big ones. For a company owner, the most important goal of them all is to one day successfully sell the business. Now I realize that some owners pass down their companies to a family member or key employees, yet the majority of owners attempt to sell their businesses to third parties. This new year’s resolution applies to owners who plan to one day sell their companies.

Without any doubt, one day, you—as a business owner—will no longer own your company. Willingly or not, horizontally or vertically, the day will come when you no longer own your company. This is an undeniable fact. So why are you NOT preparing for it? Why are you putting off planning for what is arguably one of the Top 5 events of your life?

Let me ask you this: If you knew the main water line pipe going into your house was cracked and getting bigger, would you let it be? If you saw a nail sticking out of the side of one of your tires, would you just keep driving? If your dermatologist recommended a mole check every 6 months and it’s been 5 months since the last one, would you just hold off scheduling the next visit? Quite simply, no to each of these questions.

So, if you are proactive in so many aspects of your life, why wouldn’t you prepare for the “big event”, the eventual sale of your company? Why keep delaying the inevitable at the peril of leaving substantial value on the table?

I can say with certainty that the more time you allocate to prepare for the eventual sale of your company, the greater chance you have of increasing the selling price and terms, as well as improving the likelihood of a successful and smooth sales process. Conversely, starting to prepare for your company’s sale once you receive an inquiry from a potential suitor will more likely than not work against you in getting the very best price and terms, and in being able to successfully close your sale.?

Why is time such an important currency for a successful sale? Those of you who have read my prior writing or have heard me speak know that I define “Business Value” as “Profits divided by Business Risk”. To increase business value, you have to grow profits and/or reduce business risk, both of which take time. Expanding revenues and/or controlling expenses does not happen overnight. And there is a laundry list of factors in a company that contribute to business risk. I have developed my own proprietary business risk assessment tool that looks at over 140 potential contributors to risk in over 22 areas of a company.?

The more time we have to address and reduce or eliminate a company’s business risk, the greater impact we can have on maximizing business value. Conversely, if little time is allocated to preparing a company for sale, then little time is available to reduce risk. The price you receive will suffer, the terms offered will suffer and the likelihood of a successful close will be reduced.

Make 2022 the year you say “Yes” to starting the process to eventually sell your business. Resolve to allocate time and other resources to properly prepare your company for a sale. Time is ticking. Use it wisely. You can always lose those 30 pounds next year!

About the Author, Wayne Slavitt:

Wayne Slavitt is an expert in maximizing business value. Over the past 40 plus years, Wayne has been involved in numerous and diverse entrepreneurial projects in both principal and advisory capacities. Wayne’s broad involvement on both sides of the aisle ranges from executive positions as CEO, CFO, and corporate controller, to consultative roles as an investment banker, specialized business professional, and company founder.

Wayne has extensive public speaking experience, having been a frequent lecturer for Vistage and its predecessor company, The Executive Committee, as well as the keynote speaker at the ECRM Conference and a featured lecturer at Medtrade. Wayne’s new book, ”Run It Like You’ll Sell It:?Adopting the Seller’s Mindset to Maximize the Value of Your Business” instructs business owners and their trusted advisors on how to properly prepare for an eventual sale of a company to achieve peak results.

Through his consulting company, The PrimeMark Group, Wayne provides exit planning consulting services to successful companies with revenues of $5 million to $100 million in a variety of industries.

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