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When I started Compass Point nearly 20 years ago, I heard a quote from business owner (and my now mentor) Tom Stine, “The only reason to get into business is to get out.”

I remember thinking at the time, “That’s a bit cold. Sounds like consultant talk.”

But 20 years later, I can honestly say that truer words have never been spoken. From an owner’s perspective, the whole goal is to build a transferable business. It’s transferable IF it has value. If there is no value, then why would someone want to buy it?

This is paramount to transitioning family businesses. The goal is to set up the Next Gen for success without you. Starting with a strong business focused on maximizing value gives the Next Gen a leg up on the challenges they will inevitably encounter.


Maximizing value to maximize your options

A business that is maximizing its value gives owners options:

  1. Allows you to achieve your personal goals of time and money today.
  2. Gives you more options for transition in the future –  when you are ready.
  3. Acts as a contingency plan when one of the 5Ds of business strikes: death, disability, divorce, distress, and disagreement. Nearly 50% of all businesses transition due to one or more of these factors and, contrary to what you are thinking, it CAN happen to YOU. Be prepared.

The concept of “always being for sale” isn’t just about a mindset of “I’ll sell if the price is right.” The hard truth is that if you aren’t maximizing value every day that you’re actively in the business, the price ISN’T EVER going to be right.

Unfortunately, there is no crystal ball to show you the timeline. You never know when there will be a knock on the door. But when there is, you better be ready. Or fortune will pass you by.


Value drivers that maximize value

Get to work today on the BIG picture of the business. Make maximizing value a part of your strategy. Focus on the value drivers in your business – things like:

  • improving profit performance
  • focusing on markets with growth potential
  • producing a strong business model that generates cash vs sucks it
  • creating recurring revenue
  • minimizing customer concentration
  • increasing customer satisfaction and competitive advantage
  • reducing the business’ dependency on the owner as the hub

You’ll like running this company and will dramatically increase the odds of passing it on to the Next Generation successfully.

The best way to maximize value is through uncovering your financial gaps. We can help you identify those gaps and other areas of value.

Tom Garrity profile picture
Tom Garrity

Tom has family business in his DNA. His entire career was forged in family-owned companies. This extensive experience in business development, key leadership roles, and practical financial analysis fueled Tom’s quest to help owners build successful businesses while maintaining a strong family unit.

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