Q: Tell us about your new company and what it does.
A: My new business is called Exit-Plan. In simple terms, I assist business owners to prepare their company for an eventual sale when they are set to retire or are ready to make a change. What I do is look at all of the factors that are important to a would-be buyer and work with the client to address each of these over time. Statistics indicate that 85% of business owners do not have a well-defined exit strategy and all too often are forced to sell due to health issues, changing markets and other factors that may be outside of their control. By positioning all of the chess pieces in the right spaces, one can significantly increase the value of a business.
Q: How has your background prepared you for your new role?
A: During my time as the president and CEO at Radial Engineering, in addition to countless music and pro-audio industry awards, my company twice made it on Profit Magazine’s Top 100 fastest growing companies and in 2015, we won the British Columbia Export Award for Technology. I started my career in the music industry back in 1976, and learned much over 40 years; that culminated when I sold Radial and all of its associated brands in January, 2018. While I was going through the final phases of that, I found myself assisting a friend on redirecting his efforts with his business and I found truly enjoyed the process of mentoring and consulting.
Q: How far in advance should company owners start planning an exit strategy?
A: The reality is that it takes years of preparation. For instance, if you plan a total exit, then you have to make sure that you have all of your people in place so that the business can run without you. Finding people is easy; finding good people is another matter!
You then have to have a solid history of sales growth and profitability; no one wants to buy a sinking ship. I started the process five years before my exit, but really stepped on the gas during the last three years. Keep in mind that what you are trying to do is present an attractive picture for the buyer. Once you decide to sell, if your company has any scale, you can estimate that it will take a year of answering questions, providing background data, years of sales history, financial reports and so on—so you want to make sure your company is running as if it were 10 times bigger! A well-run operation gives investors confidence. Most importantly, they need to see growth down the way.
Q: What is the greatest challenge that your clients face?
A: Time. Think of your parents going into an old folks home. It is much better that they make the decision versus your having to do it for them when they can no longer think rationally. The same applies here. Most business owners have the intention to plan, but usually put it off, and because they are caught in the day-to-day grind of being in the trees, they simply do not see the forest. Waiting until it is too late only leads to disappointment.