When Jeff Bezos announced he would be exiting as Amazon’s CEO, it threw the media into a frenzy. It seemed Bezos had been planning this move under the radar for years, focusing his time more heavily on strategic decision-making tasks than day-to-day management. Bezos conveyed an important lesson for business owners in all industries: It’s never too early to begin thinking about your exit strategy. As businesses evolve, it’s natural for leaders to make a change as well.
Still, that’s often more easily said than done. After spending years building and growing your business, it can be difficult to even consider transitioning away from your company. The business has probably become an intrinsic part of your identity, something you’ve woken up and worked for every day.
At some point, every business owner realizes he or she at least needs to have an exit plan in place. As president of a sales consulting firm and someone with more than 30 years in sales leadership, I know this well. However, according to the Exit Planning Institute, 79% of business owners say they have no written transition plan, even though 61% strongly agree transition plans are important to the future of their businesses.
When it comes time to exit, you need to have a set strategy and know that you are getting the best value for your business. Plus, you’ll feel confident that your business and sales teams are functioning at a level of independence and autonomy that will be sustainable after you leave.
Jason Kilar announced he is planning to stay on as WarnerMedia CEO until 2022, following serious speculation that his position was up in the air after AT&T announced that it was spinning off WarnerMedia to merge with Discovery. Kilar’s announcement demonstrated the magnitude of company and leadership changes, as well as the benefits of determining an exit strategy in advance.
The exit-planning process: more than a checklist
Are you wondering how to sell a business? The more planning you do in advance, the more options you will have when it is time to sell. The exit-planning process starts with valuing a business, maximizing its selling price, getting your successor lined up, managing the timing of the sale and organizing legal documents and teams. One step that is often overlooked — yet equally important — is having a solid sales plan in place. Business leaders simply cannot afford to overlook whether they have a solid sales contingency plan as part of their exit strategy.
As you prepare to step away from your organization, the onus is on you to ensure a smooth transition by focusing on your company’s sales infrastructure and proper planning. Otherwise, you risk selling your business without having laid the needed groundwork. That can result in you rushing, missing opportunities, being forced to accept a lower sale price and being generally unhappy with the result. Perhaps worse, it can result in scaring off a buyer who doesn’t feel confident that your sales team can perform independently without you.
Here’s how to start considering your exit options now and readying your sales team for the sale of your business.
1. Keep a sales-team leader in place
Your sales leaders have likely been running the ship smoothly for some time, and it’s important that you try to retain at least one of them as your company transitions to new management.
It can take up to nine years to sell a business. That historical knowledge is invaluable to your buyer, who won’t risk purchasing your company without an experienced sales leader in place. It would be like trying to buy a ship with no rudder to point it in the right direction.
2. Build up and support a sales team
If you’re the one in charge of your sales department, it’s time to empower and elevate your team so it can become self-sufficient. Otherwise, a buyer can’t take the risk of letting you walk away.
One way to do this is to help your sales team embrace digital technology. To ensure that operations continued once the pandemic began, Levi Strauss & Co. had to make rapid decisions — which it could do, in part, because of its investment in digital technology and data analytics. Technology enabled the clothing company to make sales decisions quickly and smartly.
According to a McKinsey study, companies that embed digital sales see five times the revenue growth, not to mention a 30% increase in acquisition efficiency. To truly set yourself up for success, you’ll have to get comfortable with the idea that all the sales volume of your organization should be managed by your sales team — not you.
3. Establish a consistent sales process
If your company is like most, you likely have a somewhat systematized sales process that ends up changing “flavors” depending on which salesperson is executing it. For instance, maybe sales is technically a seven-step process that gets reduced to five by some salespeople and increased to nine by other, more meticulous types.
The goal is for you as the owner to create a repeatable sales process so that the sales team won’t need guidance from you post-exit. If you are too integral a part of the sales process, it will go off the rails once you leave. Building a sales team that can follow a consistent, repeatable sales process, regardless of who owns the organization, is critical to your company’s success.
Be prepared to communicate with potential buyers about your sales team and why they can trust it. They want to know whether the team can achieve its revenue goals without current leadership in place, whether it’s capable of growing at a faster pace than originally planned. That said, it falls to you to reassure them that the business is built on a solid foundation and that you have the personnel in place to execute at a high level, regardless of the leader.
Exit planning is much more than selling your company and riding off into the sunset. As you start to consider how to optimize your business for a sale, don’t forget to also use this time to prime your sales team, create repeatable processes and empower them to act as a high-functioning, self-sufficient machine — even when you’re not around.
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Original source: Entrepreneur