Why You Need a Plan to Exit Your Business
From the day you start your business, you should have a plan to exit your business.
This statement may seem abrupt, or maybe it is a far-off pipe dream, but consider there are only 3 options when it comes to an exit strategy for your business.
- Sell to someone inside your company
- Sell to someone outside your company
- Close the business
With only 3 options on how to exit your business, the work is really on deciding WHY you want to exit your business.
Whether you think you can. Or think you can’t. You’re right.”
Risk Management
Here are a few important reasons to consider why you should have an exit strategy, BEFORE you decide to exit.
Risk Management – What if you were not there to run your business?
Having an exit strategy is a good tool to manage risk. Although you currently plan to take time away from your business, there is always a risk for unplanned time away from the business. If you needed to be away from work for an extended period, you would want your business to continue to function as normal.
Developing a strategy for your business to run while you are not there, reduces the risk.
Business Valuation
Is your business worth less when you are running it?
For many small businesses, the value of the company is tied up in you, the owner. Therefore, when you go to sell the business, there is little value if you are not there to continue to run it. And running your business, when you no longer own it, would not be as enjoyable as when you do.
Consider how you can remove yourself and your name from the business to increase its value.
Business Vision
What is the vision for your business after you leave it?
If you have sold or bought a home recently, you know the priority that is put into staging the home. Getting it ready to sell. If you were the one selling, I am sure it was a ton of work to get it ready and maybe you even hired someone to do it for you.
Maybe you even commented that the house looks so nice now, you don’t want to sell it.
What would it look like if you did the same thing with your business? Image the mindset you would have if you operated your business as if you were going to sell it the next day. The clarity for you and your staff to keep the business clean and reduce the number of loose ends would be amazing.
You may feel so good about it, that you decide to keep the business, operate it as is, and spend more time on vacation.
Personal Vision
Do you have a vision for yourself after you leave your business?
Many times, business owners do not consider exiting their business because they have not thought about their own plans. This can be difficult, and perhaps beyond your current comprehension because of the stress your business is causing you. If so, I encourage you to reach out to someone who can guide you through this process.
Perhaps the opening statement “From the day you start your business, you should have a plan to exit your business.” does not seem so abrupt after all.
Having an exit strategy for your business, starting today, is a wise business decision that impacts all areas of the business.
It can take up to 24 months to reasonably plan for you to remove yourself from your business. If you want to maximize the value of your business, it is a good idea to begin planning for you not to be there.
Ready to secure the future of your business? Start planning your exit strategy today! Discover the key steps to manage risks, maximize value, and envision your next chapter.
