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Do you have an exit strategy?

exit strategyAs the CEO of your company, do you have an exit strategy?

At one time I had a consulting company, and part of our business was executive search.

And there are a few important details that senior executives look for when they change jobs.

These items include;

  1. Compensation, including salary & bonuses, and particularly stock (ownership) options?
  2. Goals that they are expected to achieve. Mostly, these are shareholder value goals, and how that will be increased?
  3. Where is the company now, and what do they have to do, to grow it where the Board of Directors (BoD) wants it to be?
    1. Is a completely new direction needed to achieve the goals?
    2. How much leeway, time and money is the BoD going to give the new executive?
    3. Are layoffs needed, and how massive?
    4. Do any of the current senior executives need to be replaced?
  4. Exit strategy – What happens if,
    1. the BoD doesn’t want you any more, or they decide to change the company through such things as selling it, acquiring other companies, you don’t live up to their expectations, etc.?
    2. you don’t like the situation, or a constructive dismissal situation arises?

These are just a few of the areas that potential new executives look for, especially CEO’s.

But these types of events can also arise within your own company, possibly the company you started and grew.

And of course, you may also be looking for someone who has more experience than you have in growing a company. So you may want to hire someone to do that, and then of course you will be looking at these important criteria, to help you decide on the right person.

The real key to all of this is; “What is your exit strategy?”

No matter what your current situation is, you need an exit strategy, even if it is five, ten or even twenty years from now.

And of course, in order to get the most benefit from your exit strategy, you need to build your shareholder value as much as you can, before you exit.

And shareholder value is measured mostly in the revenue and profits your company has at the point you exit. It is also measured by your client base, and to a lesser extent, your products and services.

Companies are usually bought for a multiple of profits, and private companies are usually bought for a multiple of EBITDA, similar to a PE ratio for a public stock.

So then, how do you grow revenues and profits so you can realize the best gain for yourself in your exit strategy?

How do you keep increasing your shareholder value?

Obviously, how you spend your money once you get it, is up to you. This means only you, as the main shareholder, or you and your partners, will decide how much profit you’ll keep in your company.

And of course this profit is a percentage of the amount of revenue you bring in each year.

That is probably why you have a VP of Sales & Marketing.

But most times, that VP is too busy running his/her department, and all of the sales and marketing people, that he/she doesn’t have the time to train people who may be struggling, and are not delivering on their annual quota.

But there is a problem here.

According to BPM Online research, the number of reps making quota in 2016 was only 55%.

We obviously haven’t discussed how your reps are doing, but if it is not over 90% making quota, then we should have that discussion.

That is why you need an expert who knows how to train, coach and advise all of your client facing personnel, including your sales and marketing people, as well as client service people, to get them to their full potential, so you can realize the maximum revenue and profits.

In fact, some of your sales and marketing people may actually be detrimental to your growth.

Untrained sales people and marketers can cause a negative effect on your revenue growth. In many cases they can turn off potential clients, so that they will never do business with your company.

So what is the best thing you can do?

The Aberdeen Group, a business research firm, stated that if a company only provides initial one-time training to their sales people and marketers, without ongoing coaching, these people are less likely to improve the “share of wallet” with their current clients.

Aberdeen also states that Best in Class B2B companies turn to external trainers and coaches 61% more often than laggard companies do.

If your sales people and marketers do not know how to grow your current client base, they are very unlikely to bring in new clients, or certainly not good new clients.

After all, your current clients already trust you, and some sort of trust has to be developed before anyone will buy a product or service from your company.

So, if you want to grow your shareholder value, so you can solidify your exit strategy, no matter how far out that is, you need to start by helping your sales and marketing people become excellent at their jobs.

Just like saving for retirement, start your exit strategy now, so you don’t have to worry about it later.

Contact me through either my phone or email in my signature below, and let’s discuss how you can increase your shareholder value, and start your exit strategy, with better trained and coached sales people and marketers.
Ian DaintyKind regards,
Ian Dainty
Ian Dainty’s Email

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