Business self-sustainability is one of the key topic I write about regularly, and a key factor is having a business successor. That’s because there are so many benefits that you get with a successor. The last post titled, How Big Do You Need to Grow Your Business for Self-Sustainability?, I showed how little business growth is really necessary to have business self-sustainability. In fact, we have had clients that have grown their businesses beyond the revenue needed. But because business a business successor wasn’t a priority, they threw away an opportunity to have all the great benefits that come as a result.
Why Should You Focus on a Successor?
Business self-sustainability with a successor in place is loaded with benefits. Here are the 5 that I find small business owners choose to make it a priority most often:
- Increases business value.
- Decreases overall business risk .
- Establishes more options to exit your business.
- Creates independence and freedom from your business.
- Provides greater security to your family and your employees families.
A successor increases business value.
Business brokers will tell you that an owner operated business ALWAYS sell for less than an absentee owner business. That’s because investors are looking for a cash flow stream that provides a good ROI WITHOUT their involvement. So, by creating business self-sustainability you automatically make your business worth more.
Decrease business risk with a successor
Bankers, lenders, investors, and venture capital companies love when a business is not dependent on the owner in order to operate. We’ve all lost sleep at one time or another over the “hit by a bus” scenario. Well so do these guys, as getting their money back is dependent on you being there. Business self-sustainability means the business no longer relies on you meaning the business has less risk. Bankers, lenders, investors, and venture capital companies love that scenario and will give more when it exists!
Establishes more options to exit your business.
This is the one that gets most small business owners’ attention. If your business could provide you an annual net profit equal to what you want when you retire, AND you didn’t have to be there to run the business, WHY WOULD YOU SELL IT!!! If you establish business self-sustainability your business just becomes another investment in your investment portfolio. It’s an annuity for your family. You don’t have to sell it, but if you do as we saw earlier its worth more!
Independence and financial freedom comes with a successor
One of the biggest complaints I hear from business owners is “I am chained to my business.” They can’t get away for more than a few days or their business and lifestyle are impacted. What kind of life is this? It’s not! But, most don’t know how to get out of the rut. Business self-sustainability is the way out. You just need to make it a main priority within your business plan!
Provides greater security to your family and your employees families.
This is a similar to the reduced business risk in #2, but from the internal people that depend on the business’ perspective. It’s the bus scenario all over again. What would happen to your family, your employees and their families if something tragic happened to you? Business self-sustainability assure this isn’t an issue. If your business runs by itself, the bus scenario become null and void. How would that make you feel?
How Do You Get Started?
So, are you convince that you need to make business self-sustainability a priority? To get started I would suggest that you first better understand about self-sustainability by reading the posts on this blog tagged with business self-sustainability. Or, if you want to get serious about it right away you should consider applying the Business Accelerator Assessment to your business.
Life independence and financial freedom are closer that you might think! You just have to give business self-sustainability the focus and priority that it deserves. Get started right here and now!