I hope you enjoyed your Easter weekend.  We went to my mother's house for Easter dinner.

On the drive there Faith was reading the April 12^th issue of Time Magazine.  On page 66 she noticed an article entitled "Don't Become Irreplaceable." 

(You can find the article here: http://tinyurl.com/elfpltimemagarticle

This is a must read article for all business owners because it highlights a potential financial disaster that awaits the entrepreneur who is expecting his business to be a retirement nest egg and does nothing to make that happen.

As you've heard me say before, a business is the largest financial asset for most entrepreneurs and selling that business is the key to the owner's financial security.

Many business owners find out too late that the business doesn't have enough value to provide for retirement after a sale.  And a shocking large majority (4 out of 5 according to the International Business Brokers Association) find out they can't sell their business at all.

Being 'The Guy.'

Well, the article describes one of the biggest mistakes business owners can make when it comes to developing a business - being THE GUY. 

You know 'the guy.'  The guy is the one all the customers want to work with.  The guy is the one who has all the answers.  The guy is the one who knows how to do everything the best and does everything.  The guy is the one who has to be consulted for all of the answers and permission.

The problem is that, when the business owner is 'the guy,' there's no true business.  It's just 'the guy' and the people who help 'the guy.'  'The guy' owns a job rather than a business.

Understanding Business Value.

The true value of a business is a thing called "enterprise goodwill" - the relationship between the business and its customers.  Enterprise goodwill is easily transferable to a buyer.  The business is salable and has greater value to buyers.

But, when it's all about 'the guy,' then there's only 'the guy's' personal goodwill - the relationship between him and the customers.  Personal goodwill isn't easily transferable to a buyer.  Plus buyers are cautious about buying the business because many (if not all) of the customers will leave when 'the guy' leaves.  (And buyers are even more cautious and afraid now than they were a few short years ago.)

A Test for Your Business.

Businesses that create the greatest income for their owners (present income and future income) do not require owners to be part of the business operations or management.

Owners of these businesses could literally walk out the door and return 3 or 6 months later to a fully functional operation.

Have you built enterprise goodwill or personal goodwill?

To answer that question, consider what would happen if you left your business for 3 or 6 months.  Would you have anything left to return to?  Would the business be operating smoothly?

If you're not sure, you need to step back from the daily operations and get into the role of creating a business.

Failing to do so could mean you don't have a business to sell at all or that the cash you'll get from a sale will be inadequate.

How to Correct the Problem.

Creating a salable business with enterprise goodwill is not something that comes naturally to entrepreneurs.  In fact, the early stages of entrepreneurship require 'The Guy' approach for survival.

However, if your business is beyond survival and you haven't created a salable business, you must be realistic and recognize that it requires a plan and changing what you're currently doing.

The process of moving your business from a job to a true salable and valuable business and creating financial security in your business must be deliberate.  It's a system that creates value in the business.

I recently gave a talk to a group of business advisors about how to do exit planning.  During this talk I discussed the EPI/DEx^TM System, a 5 step system for creating a salable business to make sure you realize the cash business owners need to achieve their goals.

I have 7 copies of the DVD of the talk left and am happy to give them to the first 7 readers who request them.  Since this newsletter is sent to hundreds of people, if you want a copy, let me know right away.

Of course, if you'd like to discuss how to make your business salable, feel free to call me at 407-649-7777.  I'd enjoy talking with you.