Exit Like A Boss | Step 9 - Strategic Financials

Welcome to the world of exiting like a boss. You see, I've had the privilege of helping almost 800 business owners navigate a 21-step process to make their exits truly spectacular. Today, I'm here to share with you not just the secrets but also the mindset needed to exit like a true champion. If you're ready to make your exit a remarkable one, let's dive right in.

The Road to Strategic Financials

In the quest for a triumphant exit, we can't simply rely on hope and chance. We can't cross our fingers and wish for the best. No, my friends, we must have a plan, a strategic plan for our business's financial future.

Picture this: a business that's on the cusp of being acquired by a publicly listed company for a cool $10 million. To get there, they'll need to generate a net profit of $2 million. That's a five-fold return on investment, and it's indeed a happy day when you can achieve that. But here's the catch – you can't just coast along, hoping that someday you'll magically hit that $2 million profit and everything else will fall into place. No, that's not how it works.

What it means is that we need to plan our financials year by year. We can't just take last year's profit and loss statement, add 10%, and call it next year's budget. No, that's a surefire way to fall short of our goals. Instead, we need a plan that's grounded in reality.

The Power of Targets and Time Frames

Let's start with where we are today. Perhaps your business is currently turning over $5 million and making a net profit of $1 million. That's far from our $2 million target. But, remember, the magic is in the details. If we're looking at a 10-year exit strategy, we need that net profit to double, which means an annual increase of $100,000.

Now, here's the million-dollar question: how do we achieve that growth? The answer lies in strategic financial planning. This isn't about obsessing over every line item in your budget. No, it's about setting high-level goals. What's the desired profit? What's the turnover required? How do you get there?

If you need to make $2 million and each widget nets you $2, you'll need to sell a million widgets. Simple, right? But the devil is in the details. What's the selling price? How many people need to sell, make, and deliver those widgets? How many trucks do you need on the road? What's the cost of all this? It all boils down to a concise high-level budget, just eight or nine lines that define your financial trajectory.

Sustainable Growth and Adaptability

But there's another critical piece of the puzzle: sustainable growth. You can't grow at 45% per year for three years if your business can't fund that kind of expansion. If your growth rate doesn't align with your financial capacity, you'll need to adjust your plans.

You might have to delay your exit, secure additional funding, or pivot your strategy. The key is adaptability. Your financial plan isn't etched in stone; it's a living, breathing document that must evolve with your business's changing needs.

Matching Goals with Reality

Your financial plan should mirror your business's aspirations and exit goals. Use it to navigate from your current state to that future exit date. Ensure that it aligns with your business's value potential and your ultimate vision.

This is your recipe for success, your blueprint for exiting like a true boss. It's not about just hoping for the best; it's about meticulously planning your financial future. With all the right pieces in place, you can ensure that you won't just exit – you'll exit like a boss.

So, my friends, it's time to embrace the strategic financials, set your targets, and make sure they match your grand exit goal. With a dash of adaptability and a pinch of ambition, you'll be well on your way to mastering the art of exiting like a true boss. The world is yours for the taking; now, go claim it! 🚀🎩