How To Protect Your Business And Grow It For An Eventual Exit with Michael Ringel

With Salim Omar and the CPA Marketing Genius podcast.

Backstory

Michael Ringel is a highly educated, experienced and retired CPA with an illustrious career behind him. He entered the industry by working at various successful firms before going out on his own. He found his passion for working with entrepreneurs and business owners in the mid-90's. Ringel began by building support groups for business owners.

"We brought entrepreneurs like yourself and your clients together, in a collaborative mastermind environment," says Ringel.

One of the things Ringel discovered is that many business owners are so focused on the everyday aspects of their business that they don't spend time working on their long term plans. Ringel helps business owners form exit strategies that will enable them to retire with financial peace of mind.

Michael Ringel can be reached via email at mringel@strategiesforwealth.com.

Know The Value of Your Business

According to Ringel, 98% of business owners don't know the value of their business. You may know the value of your investments, 401k, and IRA which are easily accessible, but that stats show that most entrepreneurs don't know the value of the largest asset that they have- which is their business.

The reason business owners do not know the value of their business can be due to many factors including-

• A lack of time
• Money-Bringing in a CPA for a proper evaluation is an expense most businesses want to put off until later.

According to Ringel, there are financial tools that can make the process easier. You can also view your key performance indicators, benchmarking you against other business owners in your industry.



Ringel also makes certain that his clients have enough money from the sale of the business, to provide the income that they want to have for the rest of their lives.

When Should Business Owners Start Thinking About Selling?

Ringel asks, "When is the best time to plant a bonsai tree?" The answer is 20 years ago and the second best day is today! He says, "most business owners think about how to get into business, but rarely think about how they're going to get out. The day after you start your business, or even prior is the best time to think about your exit. It should be a part of your business plan."



Getting the valuation of the business done as soon as possible will assist you in adding value to your business while allowing you to exit comfortably.

Why is Exit Planning So Difficult?

"Typically the exit will be the largest financial transaction of an entrepreneur's life. There's no dress rehearsal and you only get one shot," says Ringel. Exit planning may be difficult due to a number a factors including-

• Few financial professionals actually focus on exit planning. 
• The tremendous amount of anxiety around exit planning.
• Ego- people may think that their business is worth more than it actually is.
• People think of their business as their 'baby' and have a difficult time separating from what they've built over decades.

Filling The Gap

According to Ringel the gap is the difference between what a business owner has on his personal balance sheet to create income when they retire versus what they desire.



"You have the personal balance sheet, and the business balance sheet. The gap is the difference between the two and will be the net proceeds of the sale of the business," says Ringel.

What Are Drivers That Can Increase The Value of a Business?

A turnkey business holds great value on the market. Having a business that can operate without you and has a steady cash flow will allow you a better retirement, more money and financial confidence.

 A turnkey business has three value drivers-

1. Working with your key employees.

"Provide them with extra benefits. Your key employees bring in your revenue. Having them onboard when you transfer your business adds value to the sale. Make sure that your key employees have a financial desire to stay through the transition," says Ringel.

2. A diverse client base

The majority of the income for your business should not  come from one client. If something should happen where you lose that client, your business will immediately lose value. A diverse client base means that you have multiple people bringing in revenue, adding value to your business. Ringel advises that owners determine the percentage of income your top clients have and that you are constantly expanding.

3. Build Systems

Most businesses don't have systems. Systemizing your business is a great way to add value. Build a business as if you were going to franchise it. This gives people something tangible to buy.

Final Words of Wisdom from Michael Ringel

When it comes to exit planning these are the three factors that matter-

1. Protect your business cash flow.
2. Focus on growing your business. 
3. Know that all roads lead to an exit. 

"Business owners are going to leave their business someday. Either leave on your terms or die with the business. It is essential you spend the time to realize the value of your life's work, which is the value of the business. Protect, grow, and eventually exit your business," says Ringel

CPA Marketing Genius offers Done-and-You services for web design, SEO and online marketing for CPA firms who want to grow with high value clients. Listen to the CPA Marketing Genius Podcast for more amazing insights.

Michael Ringel

Michael Ringel is a wealth strategist who is on a mission to inspire and coach families on the truths of investing and help design a plan that supports their purpose.