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.
To be clear, effective exit planning focuses on, “When is the best time to leave this business?” not “When is it time for you to get out of the business or retire?” Having a plan doesn’t mean that you have to be old and exhausted to act on it. In fact, the best time to exit may be when you are at the top of your game!
In increasing order of desirability, there are six ways to exit a business:
1. Bankruptcy
2. Liquidation
3. Sell a job
4. Sell to a family member
5. Sell to a financial buyer
6. Sell to a synergistic buyer
A seventh way-IPO-is a glamorous notion, but it’s not usually realistic for most privately-owned businesses.
Simply put, an Exit Plan allows you to sell your business at the highest reasonable price and, equally important, actually receive that purchase price. Entrepreneurs typically don’t make Exit Planning a priority because they don’t realize how critical it is to have a plan well before they’d ever need it. They believe that exiting is something that may happen in the future; making money is something that must happen today. Of course, making money today is important. But a well-crafted exit plan will actually make money for you long before you execute it.
You know how tough it is to deal with the urgencies and emergencies that are in front of you right now, right? You don’t want to spend valuable time on something that’s way off in the future, lumped in there with retirement planning in the land of “someday.”
Investing time and energy in crafting your Exit Plan isn’t going to save the day immediately, right?
Wrong. A properly crafted Exit Plan can provide tangible benefits now, and an even bigger payoff later.
NOW:
1. More profit
2. More cash
3. More time
4. More fun
5. Less risk
6. Less stress
7. More clarity and confidence
LATER:
1. Double the value of your business
2. Receive that value in cash
3. Be ready to take advantage of unexpected opportunities
4. Enjoy your freedom
5. Do it again – if you want to
The impact of having an exit plan hinges on the Power of Intention.
When you maintain an awareness of the bigger picture, even while you are dealing with daily challenges, you naturally raise your level of energy, enthusiasm and intentional. Spurred by your intentions, you naturally incorporate the appropriate structures, strategies, and systems into your business to best achieve your exit objectives.As a result, a cascade of interrelated events and resources comes together to make your vision of the future a reality.
Building value into your business is what an exit strategy is all about. You can wait until later to build value, but cannot recoup tomorrow the value that you failed to build today. An Exit Plan helps you to build stability, expand-ability, and sociability in to the operational design of the business as you:
1. Build tangible value in to your business while providing outstanding value to your customers.
2. Build the structure that helps you to realize the optimal potential and worth of the business.
3. Build systems that will allow you to focus on what you enjoy and do best and on where you can make the greatest impact.
Action Plan: If you intend to build maximum value into your business every step of the way-rather than several years (or worse, several months) before you want to exit- here’s what to do:
1. Schedule one hour a month to developing your Exit Strategy in your calendar and honour it.
2. During your first hour of exit planning, write down all the reasons why you want to avoid dealing with exit planning.
That’s it!
Sources: https://www.linkedin.com/pulse/exit-planning-integral-part-efficacious-inclusive-business-gupta
