If you are one of the very few entrepreneurs that has a formal business plan it probably does not include a section on exit strategies. Entrepreneurs seldom place importance on their exit strategy when starting a business. Unlike investors, business owners are focused on running (and growing) the company. Some investors are interested in income, but the ultimate goal of most investors is return of their investment and a healthy profit. This requires a well-conceived and executed exit strategy.
If the business plan is the road map for your business,
the exit strategy is the destination.
To be successful in your business you have had to put in tremendous amounts of time, effort and hard work. At some time you are going to start thinking about getting out of the business. It may be that you are thinking of retirement, or you may receive an offer to purchase your business, or you may want to slow down and smell the roses, or you may just be burnt out and want to cash in on your years of hard work. The reason is unimportant, knowing your options and strategizing your exit is essential if you want to receive the most from your exit.
Don’t wait until you (or your heirs) are forced to make hasty decisions. Sometimes the need to make these decisions occurs unexpectedly, such as in the case of an incapacitating illness or the death of the CEO or of a partner or co-owner. Some aspects of an exit strategy may take years to achieve and the sooner you start planning the greater your chance of success.
John M. Leonetti, author of Exiting Your Business, Protecting Your Wealth, says:
“The exit is a process, not an event. This process takes time and will impact a lot of people, so owners should put a lot of thought and analysis into it to gain clarity about what the right decision is. In most cases, if the owner makes the investment of time, they will be rewarded for it.”
Planning your exit well in advance can make a significant difference to the success of your exit strategy. Contact us to discuss and help you plan your exit strategy.