One of the most important topics we cover at our exit planning conferences is the idea of what your business represents to you. Is it merely a job? For some, it is a hobby. Others see it as who they are and self-identify closely with it (making a transition away challenging).
What we try to convey to our attendees is this: Your business is an investment, pure and simple. And you need to see it as such.
If you see it only as your job, you usually will not be thinking strategically or long-term at all. You might only be looking as far ahead as the next payroll. For some smaller businesses, this is a sad reality. However, if you ever want to grow beyond this into another dimension of your businesses life, you have to force yourself to see the company as a true investment.
Likewise, if it is a hobby, you are most likely not considering the longer term. Now if you are financially independent and have inherited great wealth that will tide you over for the rest of your life, then treating it as a hobby is probably OK. But are YOU in that position? And sadly, given the myriad of things beyond your control (such as your health), what could happen to your life savings if something unfortunate were to happen? Realizing that your “hobby” is an investment is vital.
Finally, far too many business owners see their business as an extension of themselves and the idea of ever departing – much less handing the reins over to a third party – is almost impossible to consider. For the sake of business continuity, your key employees, your customers and most importantly, your family, you need to step back and ask yourself, “Where do I personally want to be in X years?” (X is fully dependent on you and where you are in life.)
Even though it gives you great pleasure to be the one unlocking the doors at 5:00 a.m. every morning and the one closing down at 7:00 p.m., and despite the fact that your ego is stroked every time one of your employees comes to you for the umpteenth time with a question that should not have gone to you (if you had a middle-management team), the reality is that your business is an investment, like any other you make.
Have you ever calculated your return on investment (ROI) on this “stock” you have bought in your company? Do you have a target return that you want to reach before you exit? Odds are you have never even considered this.
Because you have fallen into the trap of NOT seeing your business as the investment it is in your financial future; not only for you, but for your family. You are seeing it as a job, a hobby, or your personal identity. Frankly, this could be the most serious financial mistake you will ever make.
Fortunately, Generational Equity and our team of exit planning professionals are here to help. Most of us have been working with entrepreneurs and their families for close to 30 years. This experience has taught us that the most important thing we can do is shake your thinking loose and help you consider that your business is the single largest investment you will ever make.
Getting back to the ROI question, the second reason you have never done this calculation is because you are missing the largest piece of the equation: Your company’s value.
If you don’t know this number, you have no idea what your ROI might be because this is the key item used to make that calculation. If you dig deep enough in your financials, you can probably find the total equity listed in last year’s balance sheet. That might equal what you paid into the company over the years, but will not account for the “blood, sweat, and tears” that have gone into it.
If you are not looking at your company as an investment vehicle, you need to attend a Generational Equity executive exit planning conference. Spending a day with us is an excellent ROI in terms of your time. To learn more follow these links:
And perhaps this client’s input summarizes why attending our conferences are so important to business owners:
To learn more, feel free to give me a call at 972-232-1125 or email me at email@example.com.
And no matter what, begin to consider the notion that your company truly is an investment.
By Carl Doerksen, Director of Corporate Development at Generational Equity.
© 2017 Generational Equity, LLC. All Rights Reserved.
I couldn’t have asked for a better team than Michael and Deborah. We couldn’t have done it without them.Robert Evans, President and CEO of Mealtracker Dietary Software
Generational Equity educated and informed us – so that we could be on the upside of a good decision (to sell).Bil MacLeslie, CEO, ipHouse
I quickly recognized that Don was working for Sharpe Mixers above all else, and held our interests above others.Jay Dinnison, Owner of Sharpe Mixers
We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
Bruce and I wanted to take this opportunity to thank Generational Equity for assigning Musa Jagne to our transaction. In Bruce’s words, “Musa did one hell of a job for us!”Karen S. Williams, CFO, BW Manufacturing
I am pleased that I was able to work with Andrew Byrd throughout this experience. From the first meeting we had in Minneapolis I felt that I was in good hands. His knowledge and expertise is second to none. He guided the process consistently throughout. I feel lucky that I was pared with Andrew and could not be happier that I chose Generational Equity to handle this major life event. Thank you Andrew and GenEq for everything!Eric Erlandson, Owner, Action Fastenings, Inc.
We knew it would be a difficult task to have someone really understand our business and our market, prior to researching a possible buyer, so it was imperative that we found someone of your caliber, with definite proven experience in this area.Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
We were happy to see the interest in our company and what we cherished has not just a valuable company but an important company to the communities we served in.Larry Moore, Owner, A Company Portable Restrooms
The help you provided us during each step of this process made us feel very comfortable and confident we were selecting the right approach to transition our Company.Andy Graham, Vice President, Modern Heating & Plumbing
Michael worked tirelessly, He followed every lead meticulously and urgently to make sure nothing was missed.Robert Evans, President and CEO of Mealtracker Dietary Software
Generational Equity’s assistance was invaluable in compiling and marketing our business.Bil MacLeslie, CEO, ipHouse
We will highly recommend Generational Equity and Musa Jagne to any business owner about to embark on the same process.Karen S. Williams, CFO, BW Manufacturing
I would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.Bil MacLeslie, CEO, ipHouse
We are extremely pleased with the way Generational Equity handled the sale of our company. Your associates, Tom and Chris, did an outstanding job of getting us (me) through the process.Michael J Polarek, President, Paragon Packaging
We thank you Eric and Generational Equity making our dream come true.Larry Moore, Owner, A Company Portable Restrooms
Thanks again Phil and feel free to have a future client call me if they would like a referral. You are a true professional!Andy Graham, Vice President, Modern Heating & Plumbing
T.D., thank you so much! You are a great leader! I love how you are using your gifts and talents to better others. You are clearly a GREAT COACH! This 3 day session undoubtedly changed the future of our business, and very well may have been the sole catalyst to save my company, my health and my marriage! A genuine “thank you” from the bottom of my heart.Bryan D. Horn, Owner, Over Under Clothing
Dear Chris and Andre, I just wanted to say thanks for all your help. Even though this process was not an easy one, it was comforting to know that I had a capable team standing beside me. You made me feel like we were almost your only client or at least the most important one. Thanks again, and I will recommend your service in the future.Shenille Engelhart, Owner – CLS Technology
Tom Staszak is one of the most professional people I have dealt with in my last forty years of business. You’ve got a great group of people and you have built a truly professional organization.Michael J Polarek, President, Paragon Packaging
Thank you again for all your guidance and support. Any company will achieve what they intend, if they have you on their team!Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
I need to say an immense thank you to Don Ho for his stellar work ethic, attention to detail, and tireless effort. Also thank you to the whole crew at GE! Without you, Don could not do such a phenomenal job. We were shooting for closing and funding before the end of 2020, due to the uncertainty of the political landscape and taxes. I am happy to report we closed last week and will be funding tomorrow.Dr. Caty J. Catron PhD, RN, VA-BC – Owner, Vic The Picc, LLC
I must say that I have never worked with a more driven, competent and focused individual as Don Ho.Jay Dinnison, Owner of Sharpe Mixers
I wanted to write you a quick letter to express our appreciation and our delight on the outcome of helping us through the process of our recent sale. We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.Terry D. Wickman, President, Keytroller
The process was much more involved than I expected and your help, experience and advice was a big factor in making the negotiations go as smoothly as possible.Terry D. Wickman, President, Keytroller
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.Ralph Noblin, President of Noblin & Associates
Greetings Mike. Thank you for the captivating and compelling presentation you made at the Phoenix presentation last week. Over many years in business yours was the most informative and well-presented presentation, on any subject, that I have ever attended! Your energy and enthusiasm combined with your concise and captivating support of your positions with easily understood examples and data was compelling.Pete L.
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