In today’s podcast, MultiFunding President Lynn Ozer, aka SBA Queen, and I talk to Tom Bronson, founder and president of the Business Transition Summit, as well as Mastery Partners and Mastering Mergers and Acquisitions. All three companies empower business owners to maximize business value and serve business owners in different capacities to help them achieve their dream exit. In this episode, we focus on what every business owner needs to know about business exit strategies for business success.
“I am what most people call a serial entrepreneur. I have owned, operated and sold 100 businesses in my career,” he said.
For every business that comes on the market, only 17% of them actually reach a closing table, meaning there's an 83% failure rate for businesses that attempt a transaction.
“My team and I started thinking about the things that we did in our businesses to make them more attractive and more valuable and prepared them for going on the market,” he said. “And so we developed our own intellectual property around this where we do an assessment of the business, then we build a roadmap to get the business from where they are today to where they want to be, then we help that business owner and team execute that roadmap and ultimately reach a transaction.”
His theory is that entrepreneurs should be thinking about their exit strategy when they first start up or buy a business, if not before.
“I have never gotten into a business without first thinking through what my exit strategy is going to be because I know that I'm not going to own this business forever,” he said. “Every business on the planet will eventually transition, because we have an expiration date.”
In order to be ready for a successful exit, a business must avoid owner dependency at all costs. He advises owners to document the tasks that only they know how to do, then teach somebody else how to do them and watch somebody else do some of those things.
“I get rid of all of those non-strategic things that I'm doing so I can spend more time thinking about strategy, and the business just starts improving,” he said. “If you can't take time out of your business, then your business is owner-dependent, and you need to find a way to solve that. That is deal killer number one.”
Listen here to learn what Bronson believes are the biggest mistakes entrepreneurs make, who makes a good candidate to sell your business to, and how to transition the leadership team.
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