book.chapter Framework for corporate existence

Before considering the purchase of your company, it's essential to clearly articulate why your company exists and what it aims to achieve. This can be achieved by establishing your company's Dream, Vision, Purpose, and Mission. These four components form the bedrock of your business platform. The Dream is the ultimate result your company aims to produce, addressing a problem or filling a gap for your customers. For instance, a company might aspire to revolutionize small businesses globally, equipping them with effective, low-cost systems to foster growth and competitive advantage. This dream is the grand ambition, the big picture that guides all other aspects of the business. The Vision, on the other hand, outlines the structure your company must adopt to consistently deliver the desired result. A company might envision itself as the McDonald's of small business consulting, creating a franchise system that anyone can use to achieve success. This vision is the roadmap, the strategic plan that outlines how the company will achieve its dream. The Purpose of your company is the specific outcome you aim to deliver for your most important customers. This is where you define what the result will look like and how it will feel. It's best to encapsulate this in a narrative that resonates emotionally with your customers. For example, a company might aim to empower small business owners to create companies as reliable and replicable as a McDonald's franchise, instilling confidence in their ability to achieve great results. This purpose is the why, the reason the company exists and the impact it aims to have on its customers. The Mission is the core operating system you need to develop to succeed in your endeavor. It involves the practical details of day-to-day execution, such as creating a turnkey system that any small business owner can use to run and grow their business at a cost lower than hiring a minimum wage employee. This mission is the how, the operational plan that outlines the steps the company will take to achieve its purpose. Without a solid business platform, your company won't be able to achieve the exponential growth that attracts potential buyers. By building this platform first, you focus on what your company needs to look and operate like to be viable for future sale. Every enterprise has a life cycle, and as a small business owner, your job is to grow your company towards the liquidity event of your choice. This could be a sale to someone who wants to run the business, an acquisition by a larger company, or an IPO with the potential for further growth. If you already have a company, consider building a new enterprise (NewCo) alongside your existing operation. Start with a blank slate and develop a platform for your NewCo, keeping your exit strategy in mind from the outset. If successful, you can transfer the assets of your existing company into NewCo and scale it up. This approach ensures you're not just building a job for yourself, but a company to sell. As Michael Gerber puts it, "Your dream tells the story of who you intend to become. Your vision tells the story of what your company will look like, act like, and be like in order to manifest that dream as an ongoing reality. Your purpose tells the singular story of why your company is worth doing. And finally, your mission will show your most important buyer how you did what you set out to do." This is the essence of building a company to sell. It's about more than just making a profit; it's about creating a legacy that continues to make a positive impact long after you've moved on.