Hopefully, some of you are doing a great job creating a business that runs very well without you at the throttle.
Unfortunately, many business owners aren’t. Take the business owner who has a very specialized business making the machines that make the machines that build the cars in Detroit. He’s a genius at it. He’s also getting up there in age—past retirement, to be honest.
He has a dozen well paid and very loyal employees, and he wants to make sure that they retire before he walks away.
Yes, walk away. His son was supposed to take over the business, but he died unexpectedly. Think about how devastated this father was. Imagine losing your son and business partner all at the same time. This business owner had been training his son, the second generation, to take over since the kid was young. His son was the business owner’s exit plan, but that plan never happened.
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Chapter 2 | Is your Business your J-O-B?
I don’t think the father has ever fully recovered, and he’s made it clear. When he’s ready to be done, he says, “I’m going to throw the keys in the bushes, and that’s that.” What this man created is very valuable, but it is going to die with him. It was worth everything, and now, essentially, it’s worth nothing.
When you work too much in the business, and you’re the one at the center of it all, then you don’t have a business. Your business may have made you a lot of money, but you’ve created a job, a very good one, for yourself. Probably a great lifestyle, too. But it isn’t sellable. That is a very bitter pill to swallow. If you are so integral to the business that you and no one else have relationships with all the suppliers, the customers, and everyone else, the reality is that the business has no value to transfer or sell.
Do you own a business that runs with or without you? Or have you created a job for yourself? That is THE number one question that will answer whether or not you’re going to be successful when it’s time to sell your business. If you don’t have a business that will sell, your business will die when you do.
The Value of Your Business
When you have spent your life building this business, many times from the ground up, it is invaluable to you. It’s just so darn hard to let go.
You are certain that that business has enough value that you’re going to be able to retire and live well through the remainder of your years. Why? Because of all that this business has provided you. Your business can have tremendous value—or not.
What is the real value of your business? How can you measure it? Are you qualified to put a number on it?
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