I see young dog trainers out in the world, working as many hours as they can, building their skills and creating happy customers. They think they are earning money from the service they provide, but what they don’t realize is that they are also growing “business goodwill.” “Goodwill” is an asset of a business that has value and that can be sold. It represents the company’s ability to bring in future income.
When you are just starting a business, it may seem strange to think about how you are going to end it. But eventually you will leave your business, either to retire or to move on to other things. When you reach that point, 20 or 10 or 5 years from now, will you let your business goodwill evaporate? Or will you take advantage of the value that your hard work has built up? Planning now can make the final transition easier and maybe even profitable.
Having an exit strategy also guides the decisions you make today about your business. Should you form an LLC or Corporation, which have certain advantages in the sale of a business? Should you register your trademark, which also creates more business goodwill? Should you hire and train employees, who may eventually run or even buy the business? It takes an average of two to four years to sell a small business, so succession planning is key. Having an exit strategy is important for the continuity of the business and for your financial and retirement planning.
As Benjamin Franklin once said, “By failing to prepare, you are preparing to fail.” The hard work that you are doing now can create a separate entity that has value and existence beyond your own. Don’t let all that effort go to waste. Taking some time right now to think about and plan for the full arc of your business is the only way to reach your goals in the future.
If you need help with setting goals for your business and making a plan that you can follow through on, join Michael Badial and Christina Schenk-Hargrove in the Facebook group DTU: Marketing & Running an R+ Dog Business in December.