Why Should You Plan an Exit Strategy? As a business owner, you’ve spent a lifetime of hard work building up your company. How much thought have you put into preparing an exit plan to leave it?
You probably started with a clear picture of your short-term business goals. Well, it’s no less important to look further down the road with an eye toward maximizing the price you’ll get when the time comes to sell. | |
Ideally, there’s already an exit strategy built into your start-up plan. A strategy you can review and revise at least once a year, when you work on your annual business plan and budget. Likewise, when unexpected changes pose potential threats, you can make adjustments as needed to steer your business in the direction that your exit option demands.
On the other hand, if you manage an existing business and haven't planned an exit strategy yet, it wouldn’t hurt to consider your exit options right away. Perhaps you could improve or change the way you run your business to increase profits.
An accurate, carefully crafted exit plan should help you mould your business into the ideal shape for your chosen exit option, maximizing the value you get from it.
It should also serve as a guide to help you groom a successor from within, whether your chosen successor is a family member or part of your management team.
Finally, an exit plan can raise your chances of exiting at a time of your own choosing, when the business is doing well and market conditions are ripe.
In sum, your exit strategy can affect: - the value you and other shareholders realize from the business
- whether you sell it for one lump sum, or for deferred or staggered payments
- the future success of the business and its products or services
- whether you retain any involvement in or control of your business
- your tax liabilities.
Integral Part of a Success
Exit planning is an integral part of a successful, comprehensive business plan. But most business owners are so busy growing their business that the last thing they stop to consider is their Exit Strategy. If you really want to build your company to be all that it can be and more, you need to establish right up front what you're going for and what it means to you when you get there. Read all | | Why Most Exit Strategies Fail
Studies show that most family-owned businesses do not achieve the anticipated or desired results from their exit strategies. No matter what their method of exit, be it succession, management buy-in, or management buy-out, they build a (seemingly) solid exit strategy only to discover that it does not reflect reality for one reason or another. Read all | | The Only Approach To A Successful Exit Strategy
Proper planning and well timed exits can literally mean millions of dollars in additional Value and Wealth Preservation that is added to a business owner’s net worth and legacy. Therefore, it is imperative to inform business owners and their advisors of recent developments in – and to provide timely information on – this increasingly important practice area. Read all |
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