You are ready to sell your business. You started this thing decades ago because it seemed a good way to make a living.

But the real question is: if you are the business, do you have something to sell

Your company may have a nominal value, but if you are the company, you probably are not going to get someone to buy you for a lot of money.

At best, you might be looking at an earn-out where you will be required to “hang out” for several years, getting paid over a transition period, where they get the profits, you shoulder the risk.

Not a good thing. An earn-out is not a sale.

When a service company is sold, or a product company where sales are not repetitive, and most day to day operations are dependent upon you, the buyer will have quite a concern over what happens to the net profits they are buying after you have departed.

The buyer does not want to own that risk, thus you, the owner often have to stay around for two or three years - maybe more to get your money. During those years, a lot can happen that makes it difficult for you to meet the buyer’s performance goals. Add to that, you no longer are in charge, so the pressures of no longer doing it “your way” add to the mounting frustrations of being on a quota. Buyers use earn-outs when they know the owner is the company, and so leave the risk on the owner. Things work, the seller wins.

Things do not, the owner loses.

So let’s make your business run independently of you.

Here is where to start: Understand who you are. What are your Unique Abilities? One of the top business coaches in the world, Dan Sullivan (Strategic Coach) says most of us should spend 80% or more of our time only operating within our Unique Abilities, and those areas we operate in should only constitute the 3 things we do best, love to do, and are most productive toward achieving our goals. These are the things you thrive at doing. Things you love doing. Not surprising, when you are executing within your unique abilities, you are in your peak earning period.

Everything else is dragging your earnings efficiency back to a mean average. What does that mean? Say you make $200,000 a year. And assume, for simple math, you work 1,800 hours a year (45 weeks at 40 hours a week). That’s you being paid $111 an hour.

But wait! Look at how you spend your day. I will bet 20% of the time you are within your unique ability, making $500/hr. Ok. 20% of your time multiplied by 1,800 hours is 360 hours. 360 hours at $500/hr is $180,000. Of the balance of your time, probably 40% of the time is simply non-productive, yielding $0, and 40% of your time is yielding $21,000, or $30/hr (1,800 hrs * 40% * $30 = $21,000). The total? $200,000. So why work on things you shouldn’t, and more importantly, things that do not make you money?

This gets complicated, but follow the math: What if we took more time off, only working 2 months on, 1 month off (i.e. 52 weeks – 16 weeks = 36 weeks a year), at 40 hours a week, spending 50% of our time in our unique ability, generating $500/hr and 50% of our time on non-productive projects?

Sounds like 1,440 hrs * 50% * $500/hr, or $360,000. And that’s with 50% of this time being “non-productive”!!!

What happens as we improve on this the following year by mastering delegation?

The bigger question is: Why aren’t you doing fewer things, outsourcing what you are not “best” at, make more money, and be able to show a buyer that you do not have your hand in every aspect of the business? Why?

Because that is how you always operated, from the day you founded the company to now. But now we need to change. We need to define our unique ability and get rid of the activities that not only drag your effectiveness down but make a buyer nervous when looking at all the things you seem to be “in charge” of.

So how do you start? Good question. Here are two things you can do right now:

1. Go online and order Strenthfinder 2.0 by Tom Rath. Loaded with hundreds of strategies for identifying and applying your strengths, this book and accompanying website will change the way you look at yourself - and the world around you - forever. And help you become more Operationally irrelevant in your business.

2. Here is another place to start: Make a list of the top 20 things you do. It does not matter if it is sales, engineering, or production work. Circle the three things you like doing the most (chances are you are already looking at your unique abilities, but Tom Rath’s book will make it quite clear to you.

Now circle the most important three items on the list. Who can you train, who can you delegate these tasks to? And when they make mistakes, as they will, be sure to make these mistakes teaching moments, not incidents for shame, blame, and guilt. This is just not important to you. It is vital for you.

One by one, as these tasks seem to be delegated successfully, add from the list of 20 to your list of 3 things you wish (want(!) to delegate, until as many, if not all of the functions are at least being shared among your key management team. This may take time, but again, it is vital if you want a sale, & not an earn-out or a considerable discount to what otherwise your value would appear to be.

For more help in understanding how to exit your business on your terms, visit ExitTheFamilyBuisness.com or take our Saleability Survey... the intrinsic tool to preparing your business for sale!