In the competitive sectors of construction, engineering, and manufacturing, business owners often find themselves deeply involved in their businesses’ day-to-day issues and short-term growth strategies.
A subsequent myth pervades many business owners: “It’s too early to think about selling my business.”
This mindset can be a strategic misstep, as it misses out on aligning the business’s growth trajectory with key considerations of market demand and the owner’s personal and financial goals.
The Common Misconception
This common oversight is the belief that considering their business’s eventual sale or transition is a task for later stages.
This perspective focuses on immediate challenges at the expense of future saleability and strategic direction. Such an approach can restrict a business’s scalability and profitability and may not align with the owner’s long-term aspirations.
By concentrating on the immediate, owners risk their businesses becoming less adaptable and efficient, potentially diminishing their attractiveness to future buyers or investors. This narrow focus also overlooks the chance to transform the business to meet market needs and the owner’s objectives.
A Broader Perspective for Future Value
Business owners must balance their focus on day-to-day operations with a broader, future-oriented strategy. This means understanding the future market demands and how aligning with these can increase the business’s appeal and value. The business should be shaped not only for today’s success but also for tomorrow’s opportunities, taking into account the market’s expectations and the owner’s personal goals.
Adopting a forward-thinking approach is vital. It ensures the business is designed for efficiency, scalability, and market appeal. Crucially, it also makes the business easier for the owner to manage, aligning its trajectory with market demands and the owner’s personal and financial goals.
Guiding Businesses Towards Optimal Growth
My experience with the Propertylink business from 2011 to 2016 is a testament to this approach’s effectiveness.
By developing strategies forged from a unique master planning process, my business partners and I captured value-creation opportunities while concurrently satisfying our own goals and needs. We subsequently enhanced Propertylink’s value, achieving a 16-fold increase in shareholder wealth in five years.
While the solution involves viewing the business from a potential acquirer’s perspective, it also means integrating these insights with a comprehensive owner’s strategy. This approach ensures that the business runs efficiently for the owner, is market-ready, and aligns with the owner’s broader life objectives.
Conclusion
Early consideration of a business’s future alignment with market needs and the owner’s personal goals is critical for long-term success.
For business owners, this means stepping back to gain a fuller picture of their business’s weaknesses and potential positive trajectory.
The strategies created will set the stage for a business that is successful in the present, primed for maximum value in the medium term, and aligned with the owner’s vision in the long term.
The information contained in this article is general in nature and is not legal, tax or financial advice. Contact a lawyer or a tax or financial professional for information regarding your particular situation. The information in this newsletter is provided with the understanding that it does not render legal, accounting, tax or financial advice. Clients should consult their legal, accounting, tax or financial professional in specific cases. This article is not intended to give advice or represent our firm as qualified to advise on all areas of professional services. Master Planning is a discipline that typically requires the collaboration of multiple professional advisors. To the extent that our firm does not have the expertise required on a particular matter, we will always work closely with you to help you gain access to the resources and professional advice you need.
Any examples provided are for illustrative purposes only. Examples may include fictitious names and may not represent any particular person or entity.
