If you’re not the ringmaster of this circus then someone else will be!
So you’ve determined when you want to transition out of the business, what form the transition will take — sale, transfer to employees, management buyout– and now you need to make it happen. I’ve covered potholes, why you need a Success TeamTM and the preparation needed to sell your company. Now it is time to manage your performers. How do I use the Success TeamTM So now you have them. You’ve already met with some of them. How often should you meet with them? Your goal should be to keep them familiar with the business and not be a stranger when you really need their expertise. So here’s some guidelines:
- You should meet with your CFO at least monthly. Review your KPI’s and identify both the good and bad. After or at the same time meet with your key employees and plan how you will recover from the bad and emphasize the good. Quarterly at a minimum, you can have your CFO can see what has happened to the estimated value of your company. Has it gone up, down, stayed the same? Remember the goal is to increase the company value so you can retire as you want.
- You should meet with your banker quarterly. See my other blog posts about getting the most from your banker.
- Your Appraiser. Talk with them about any major asset purchases. Will the purchase add value to the business? What can you expect as a return on the investment at time of sale? For example, what’s the return for installing a swimming pool compared to remodeling the kitchen? That doesn’t mean you don’t make the investment. But you might look for alternatives that either reduce your cost, or increase the value.
- Your CPA. Yes they may also be the tax advisor. But something you might not think about. Financial statements compiled by a CPA have more value than internally prepared financials. Reviewed statements are still more valuable. Audited financials have the most value.
- Other members of your team may be every 6 months or each year. As you get closer to your transition time, sale of the company or something else, you will meet with them more frequently.
Again, why do I do all this work ahead of time? Now, why do you want to do these actions – CPA prepared financial statements, appraised values, et al? You do this for one simple reason – CONTROL THE PROCESS! If you don’t control the process, someone else will. For example, what if the buyer comes in with something radically different appraisal? You have something to compare with and can negotiate. Or it may be a bad appraisal. Or the buyer challenges your financial information? A CPA has validated your information where did they get theirs? Why include your banker? Your banker can advise if the buyer has the financial strength to get the deal done and you’re not wasting your time. All your advisors on your Success TeamTM are important to your successful transition. Whether it be a total sale, a partial sale or transfer. Finally Fees – the elephant in the room. Yes you are correct, all of these advisors cost money. Everyone wants a piece of the action. So that is why you start early. You bring them in early in the process. Why? So they can work together and make sure you get all you want and they are compensated. Good advisors are not going to work with you and after all is done, say, you owe me more! You will know the costs and can include that in the calculations. Good advisors will naturally look after your best interest, work to maximize your rewards and for doing that should be fairly compensated. This is one reason to start assembling your team early in the process. So you can weed out those that are only in it for the money. My Role My role in this? As your B2B CFO® everything I do is to improve the life of you, the business owner. You are important to society. I have unique processes and tools to help eliminate the barriers to your success. Let’s talk about how I can improve your life. Other blog posts in this series are:
- Congratulations on Selling Your Business! Now get back to work!
- Swimming Hard Running Your Business? Here let me throw you a 100lb weight
- Make Your Dream Team a Success TeamTM Making the most of Exceptional Talent
I Bring Financial Knowledge, Provide Financial Training and GenerateFinancial Stability I am fluent in “financialspeak” and can translate your monthly numbers into strategies for future success. I take companies to a higher level of success LinkedIn: http://www.linkedin.com/in/andyandersoncpa/ Email : AndyAnderson@b2bcfo.com. Phone: 909-732-4917 Other blog series: