How to Make More Money and Leave a Legacy With Your Business
Posted by Christine
1 May 2021
You want to make more money and leave a legacy after a lifetime of work building your own business – don’t you? Yet only 2% of business owners know what their business is worth today. And over 90% of business are unsaleable!
Experts in their field, the shareholders of this well-established company were already in their 60’s and recognised that they’d been so busy “doing” they hadn’t spent any time planning for what would happen to their business when they wanted to retire. One thing was certain, they knew their energy levels were getting lower and the business was at risk of fading away.
One of the biggest problems was that they had employed a series of Managing Directors and been disappointed with their performance. This had happened more than once so they were now questioning what the problem was. How could they make more money from their business today and leave a legacy for tomorrow?
The initial VALUE assessment identified the strengths and weaknesses in the business. This included the heavy reliance on the business owners who were trapped in the day-to-day activities. We built a bespoke action plan based on these findings.
This resulted in a programme of improvements that added value to the business was started straight away. This immediately put pressure on the owners which they found very uncomfortable. They wanted to reduce the pressure not increase it. This sign posted them to change the way they worked with the new Senior Leadership Team.
By working on the gaps in the business, they were able to work themselves out of the day to day and get their employees more involved. The business started to improve without the shareholder involvement which gave them the faith to delegate more responsibilities.
They explored their Exit Options. There were more routes than they knew. During the workshop a range of possibilities were discussed and debated until they had the information to make the choices that suited their needs both now and in the future.
After years of worrying about what to do, the shareholders had a plan and the insights to be able to see how they could let go of the day-to-day. They started to trust that they had built a capable team who, with visibility on the goals, could deliver desired results.
They all went from working 5 days a week to gradually working 1-3 days a month ON the business rather than in the details of daily operations. A plan was developed that protected the existing value of the business as well as allowing growth in the future.
The roles of shareholder, director and employee were clearly defined for everyone in the business. This helped everyone understand how they contributed to the business’ success. They have put in place appropriate protection for their shareholding, including a shareholder agreement that fits their needs, a buy/sell agreement and the correct level protection insurance that fits the value of the business.
They were fully able to pivot from a face-to-face delivery model to 100% on-line delivery during the COVID pandemic. Their employees were empowered and excited about doing this, especially as they now knew that the business survival relied on it happening successfully. This increased profitability, productivity and performance of their staff. They now have a clear route to retirement funding and a committed team of people all focused on what needs to happen to deliver the shareholder needs.
