EXIT STRATEGY – Do you have one?

Keeping You In The Know – Experts Advice

Is your business one of the few that actually has a documented exit strategy?

An exit strategy is about leaving your business on your terms! And the only way to do this is to plan for the known AND the unknown.

Baby Boomers are ‘coming of age’ (that is retirement age) so many small business owners will be exiting from their business to retire during the next 10 years, and are hopefully already planning for this.

Some business owners, not yet ready to retire, will also be planning to exit their business, sometimes into another business or to take up other opportunities.

An exit strategy is a very important tool for any business to have and should be documented and part of your Business Plan.

The most likely exit strategies considered by business owners are:

  • Pass on the business to the next generation
  • Sell the business to other partners or employees
  • Sell the business on the open market
  • Pass on the business to other family members
  • Close the business and sell the assets.

You may already have considered all the above strategies and worked through the elements of your most preferred options. You also may have determined the possibilities and success of each option and the preferred timing of the exit. (ie. in the next 12 month, 2 years, 5 years or >10 years).

With all this thought and planning, your main goal of leaving the business on your terms, will probably be achieved.

But what about the UNKNOWN. Sickness, divorce, death, rogue partner and anything else that may affect your business. An exit strategy needs to cover as many of the ‘what ifs’ that could occur, because leaving a business because of an unplanned situation means that at best, the sale will not be on your terms and at worst, you walk away with nothing.

You should start planning your exit strategy from day one, and this, together with the Business Plan, should guide the processes of how you operate your business. If you are past day one, then tomorrow is a good time to start planning.

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