By: Jim Roddy, VP of Sales & Marketing at the RSPA

You might know Tom Bronson as a regular presenter at RSPA events and other industry conferences. Or you might know him as the former CEO of Granbury Solutions which he sold in 2018 before launching his Mastery Partners consulting group. Today, you’ll get to know him as author Tom Bronson.

Earlier this year, Bronson published Maximize Business Value: Begin with the Exit in Mind, and the book certainly lives up to its title. Bronson maps out specific actions for SMB executives if they want to sell their business at a satisfactory price. One VAR executive told me he devoured the book on his flights back to the West Coast from RSPA Inspire 2020 in the Bahamas, and he felt Bronson gave him a roadmap for a successful exit in the not-too-distant future.

Here are some the most insightful passages from Maximize Business Value:

1. Most exits fail because the owner does not start the process early enough to prepare the business for a successful exit.
2. Brokers and bankers are more concerned about closing a deal than improving the outcome.
3. A well-designed exit strategy is a guidepost for effective decision making in your business. When faced with a strategic decision, if it does not increase the value of your business, you simply shouldn’t do it.
4. If you don’t have an exit strategy, then by default your strategy is to die behind your desk and leave the problem for your family and employees to deal with.
5. If you start to prepare less than two years before the planned exit event, there is very little you can do to change the outcome.
6. Many owners leave a tremendous amount of value on the table when it’s time to exit. They are focused on income generation (a job), rather than being focused on building enterprise value (an asset).
7. Planning ahead not only provides an opportunity to avoid disaster and maximize profits, it opens the door to strategic options.
8. Having only one option is not an option.
9. As a business owner, how much time do you spend thinking about the quality of your team? Are they actively taking your business to the next level, or are they happy with the status quo?
10. A culture of relentless execution is the single most important thing to ensure that you and your business stay on track to meet your ultimate transition goals.
11. Distractions have a way of making you feel productive, but they actually stand between you and greatness.
12. Family or intergenerational transitions are barely more successful than selling the business outright, with only a 30% success rate in moving to the second generation.

RSPA Recommended Read Rating: 9.0/10

This book is relevant for any privately-owned SMB, but especially for resellers in the retail IT channel. Many VAR executives have admitted to me they’ve been head-down working on growing near-term sales and profits instead of taking steps to build their business value. Closing a $15,000 installation in February is great for that month, quarter, and year. But building a $5,000 per year recurring revenue stream from a merchant more positively impacts your business value. From the perspective of a prospective buyer, that $15k February sale is history; the $5k in recurring revenue is their future.

Bronson’s book reminded me of what I failed to do when I was a small business owner in my 20s. I published two monthly magazines in northwest Pennsylvania, busting my tail days, nights, and weekends for over a half decade. When I was ready to move onto something else, my publications had a well-known and respected brand, a reputation for high quality, a faithful readership, and escalating sales numbers.

However, I flunked on several areas Bronson addresses in his book. Below are nine functional areas Bronson lists followed by a self-assessment of my former business:

• Corporate Governance. Everything was in my head.
• Finance and Accounting. Besides outsourcing payroll, all I had was a checkbook (which I never balanced). I created all my invoices in PageMaker, a desktop publishing system.
• Human Resources. Freelancers delivered my magazines in their personal cars. No contracts, no insurance coverage … but massive risk and liability.
• Didn’t I already say everything was in my head?
• Sales and Marketing. I had lots of personal relationships but no sales/marketing cadence.
• Strategic Planning. LOL
• Succession Planning. Never heard of it.
• Product and Development. Looking back, most everything in my business was between my ears and not on paper.

When I attempted to sell my business in 1998, I had a few interested parties including the local newspaper, which seemed a perfect fit in my mind. I met with them and their general counsel around a giant mahogany table in their headquarters and presented what I had. They were quite complimentary of my product and my individual performance, but they never called me back about an acquisition. When I publicly announced I was shuttering my business, I received a flurry of well-wishes from advertisers and readers. But you can’t deposit those in the bank.

Don’t make the mistake(s) I did. Planning your exit – whether that’s selling to strangers or handing off to family members – should always be a top priority for a business owner. Buy a copy of Maximize Business Value today and start planning your future. As Bronson says, “If you don’t have an exit strategy, then by default your strategy is to die behind your desk and leave the problem for your family and employees to deal with.”

Jim Roddy is the Vice President of Sales & Marketing for the Retail Solutions Providers Association (RSPA). He has been active in the POS channel since 1998, including 11 years as the President of Business Solutions Magazine, six years as an RSPA board member, one term as RSPA Chairman of the Board, and several years as a business coach for VARs, ISVs, and MSPs. Jim is regularly requested to speak at industry conferences and he is author of Hire Like You Just Beat Cancer. For more information, contact JRoddy@GoRSPA.org.