I was recently working with a client that is one of those infuriating people that is good at all sorts of things. He races sail boats and sings in a rock band when he’s not running a successful consultancy. Late last year he asked Redbank to develop an exit strategy for him. This is the story of that effort and the surprising end point.
The Actual Exit Plan
When we work with clients on exit planning, which more and more is becoming integrated with strategic planning for our clients, we look at four phases: the unplanned plan (or estate plan), the ripcord, the interim plan and the indefinite plan. Each has its place, and you really should have all three in place. BUT they aren’t redundant, and they meld together. The unplanned plan is simply your estate plan. Because the ugly truth is, you may not survive to see us complete your plan. You could walk out of the meeting and be hit by the proverbial bus. So you need to get an estate plan in place. Honestly, most of our clients already have one, but just as honestly, they often need a tweak because they haven’t been updated and/or they don’t reflect the realities of exiting a business that has grown for decades.
The Ripcord Plan is the second plan to put in place an it covers the case in which you just need to get the … out of the business. This could be a forced situation like a health issue that prevents you from continuing business as usual or it could be a rapid deterioration of the industry segment that you serve. It doesn’t really matter, the point is, you need to exit the business with all due haste. In this case little can be done to improve the performance of the business, but it can be neatened up a little, personal assets taken off the books etc. This is a classic make ready for sale project.
The Interim Plan is the third plan and it flows naturally from the Ripcord. In fact, you will complete all the Ripcard plan activities and flow directly into the interim plan. This is the time for making big changes to the business to increase the value of your asset when you sell it. This phase can run from 18 months to 3 years or more, depending on the condition of the business and the opportunities to be harvested through intensive work. This is the heavy lifting phase and will often involve the hiring of a President or COO to complete the work as often the Owner is not interested in this sort of hill climb so close to their exit.
The final plan is the Indefinite plan. In this phase, the President that was hired has improved the performance of the business that honestly, the Owner can’t imagine selling it. It runs itself, the Owner attends quarterly board meetings to review the performance of the business. The President is trustworthy and well compensated so they aren’t going anywhere. …what’s not to love?!
Back To Our Hero
When last we spoke about our hero, he was contemplating exiting his business. So we conducted a workshop to assess the situation and his needs. It turns out that he LOVES what he does. All of it. Racing, singing AND consulting. So rather than create an exit strategy we creating an abbreviated Ripcord plan and then when straight to the Indefinite plan. The goal here, for this client was to streamline all the minor irritations of owning and business and make the business as much about joy as possible. So that’s what we did. Now he only does three things: racing, singing and consulting. …and he has eliminated all the administrivia and energy sucking activity from his business and almost from his life. As a bonus, we worked on and found an approach to generating new business from his extensive rolodex that doesn’t even take a lot of time so his revenue has stabilized, contributing significantly to the sleep at night factor.
Call To Action
Think about your situation and whether a reduction in daily busyness wouldn’t add value to your life. If it would create an entry plan:
1. Identify the energizing portions of your life.
2. Identify the energy sucking portions of your life.
3. Identify the risks in your life.
4. Develop a life entry plan to maximize the first and eliminate or mitigate the second and third.
5. Feel free to call us for this. It seems simple, but having a third party really get to know you and point out things about you that you didn’t know is VERY helpful in this process. Not to mention, we’ll actually get it done for you and minimize your time required!
I hope you found something to apply to your business in this MBR. Let me know either way.
See us here on LinkedIn.