75. How to build with the exit in mind - Laurie Barkman - The Business Transition Sherpa

Today, we dive into the essential topic of building a business with the end in mind.

My guest is Laurie Barkman, author of the Business Transition Handbook and a seasoned Business Transition Sherpa. Laurie shares invaluable insights and strategies on preparing for a successful business exit.

Whether you're a new entrepreneur or a seasoned business owner, this episode is packed with practical advice to help you plan your business journey from start to finish.

Laurie begins by explaining the concept of a Business Transition Sherpa. Think of a Sherpa guiding climbers up Mount Everest. Laurie provides similar guidance, but for business owners navigating the complex terrain of succession planning and business transitions.

She emphasises that the process should start early, ideally years before the actual exit, to ensure a seamless and profitable transition.

One of the key frameworks Laurie discusses is the "three-legged stool" of business readiness. This includes personal readiness, business readiness, and financial readiness.

She highlights the importance of evaluating these areas regularly to identify any gaps or risks that could impact the business's value or the owner's ability to exit successfully.

Laurie also talks about the significance of understanding what makes a business saleable.

It's not just about having a profitable company but also about having transferable value that buyers find attractive.

This includes having solid operational systems, a reliable customer base, and minimizing risks that could deter potential buyers.

Another critical point Laurie makes is about the emotional aspect of selling a business.

For many owners, their business is like a child, making the decision to sell highly emotional.

Laurie addresses the need to balance logic and emotion in business decisions, ensuring that the head, heart, and wallet are all considered.

Key Elements Discussed

1. 1. Balancing logic and emotion in business
   • Laurie mentions, "There's an emotional component to this as well, right? That's the heart and it's hard. You know, they've built the business or they've inherited the business." (14:51)
   • She emphasises that while the financial and strategic aspects of selling are crucial, addressing the emotional side is equally important to avoid future regrets.
   1. Think like a buyer
   • "If we understand and can think like a buyer and look at our business from the outside in like a buyer, you'll be better off." (8:20)
   • Laurie advises business owners to view their business through the lens of a potential buyer to identify and mitigate risks that could lower the business's value.
   1. Understanding what makes a business saleable
   • Laurie explains, "What problem does your company solve for another company? Buyers decide the price and the private market." (7:31)
   • She stresses the importance of creating a business that is not only profitable but also has transferable value and solves significant problems for its potential buyers.
   1. What is a business transition sherpa?
   • Laurie describes her role: "It is someone who cares so much about the experience of business owners on their journey... I'm guiding my business owner clients and people all over the world how to maximize that experience so they can have an exit without regret." (00:18)
   • As a Business Transition Sherpa, Laurie helps business owners navigate the complexities of succession planning, ensuring they are well-prepared for a successful exit.

Tune in to hear Laurie Barkman's expert advice on building with the exit in mind, ensuring that your business journey is well-planned and profitable.

You can find Laurie and her resources at https://thebusinesstransitionsherpa.com/.