Having a Plan to Exit Doesn’t Mean You Have To Sell
This article originally posted via Startup Digest Reading List – Prepping for Exit – a Startup Digest Reading List
You don’t have to be actively preparing to sell your company – but you should have the groundwork in place if and when you want to sell.
Last week I had the chance to spend time with 14 service-based businesses, all with meaningful revenue and all companies with longevity. The topic was “How to Productize Your Service” with the premise that using tools and technology to market and sell as well as delivering their services will create a path to scale their business. Think of it as bringing tech in traditionally non-tech companies.
But tech isn’t the solution by itself, it also requires people and processes. The conversation included both scaling their teams and looking for places where the CEO was the single point of dependency in their businesses.
When I asked about how many were thinking of selling their business, it was a mix. Even if you’re not ready to sell, you should be thinking about how to make the business less dependent on your. At very least it will free up some time for a holiday without micromanaging the business from your favorite vacation spot!
Also, the business becomes more valuable when it’s less dependent on you. That can be hard for our ego, but likely the best thing for the business. Many founders started their companies because of their own technical or expert skill sets. This means that the customer only wants you to deliver on the service.
Some of the news articles about Google last week implied the founders were leaving because of pending federal investigations. But Page and Brin have been preparing for an exit for a number of years (see below). It started with them spending less time on the core business and more time working on moonshot projects (things that interested them). That provided some time for the team to fill in behind them.
You don’t have to be Alphabet to prepare for an exit. But you will need to make a plan and use incremental free-cash to invest in replacing yourself in key roles.
What roles are your primary roles today? <hint, it’s probably too many>
- Marketing – for many founders, this falls in your lap because you can either do marketing or hire for marketing but not both based on available cash. How can you scale your marketing?
- Sales – if you’re the face of the company and your customers always want to talk to you you’re going to have a scale problem. You don’t need a new face to the market, but you can’t be the only face. How will you scale sales and business development?
- Delivery – do you have a potential lead on your team that can fill in behind you on deliver? How do you start getting them in front of the customers more often?
- Recruiting – this is one role it will be tough to delegate. We all want to think we want to hire smarter and better people than us, but if we’re not active in the recruiting process in critical roles we may not get the talent we need.
Here’s to better vacations!
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