It may be years before you are ready to leave your business. You may absolutely love working, and can’t imagine retiring any time soon. Or maybe you want to exit, but you don’t have the financial resources to leave the business just yet. No matter which situation you find yourself in, it is inevitable that you will leave one day. Being prepared ahead of time is crucial to a successful exit from your business.
Successful owners start thinking about their exit plan now -- long before they plan on actually exiting. They start by building a successful business that has value to a buyer now! You can build your business two ways: One is defensive and one is offensive. Using a mixture of them both will enhance the quality of your business and ensure that your eventual exit will be a successful one.
Defensive: Although you may have no intention of exiting anytime soon, it is extremely important to “go on the defensive” and be prepared to exit at any time. You never know what the future will hold.
· The market could take a drastic turn for the better -- or the worse, and it may be time to get out.
· An offer you cannot pass up may come along unexpectedly.
· Or in extreme cases, you could fall ill or disabled and unable to run the business
Sadly, we don’t live forever and none of us know when we are going to die. Knowing that your company will be able to function without you in the event of an emergency is important to saving the integrity of the business you worked so hard to build.
Offensive: “Offensively” speaking, you want your company to be one that thrives for a long time, especially after you exit. To ensure that:
· Put strong systems in place – financial, operational, sales, etc..
· Make strategic business decisions today. You’ll reduce risks and prepare your business to be more valuable before you leave.
· Build a strong management team
· Become less financially dependent on your business in the final years leading up to your exit are important things you can do to build a vibrant saleable business that people will want to buy.
· Look at the areas in your business that need improvement. Weak links could be detrimental to a profitable sale, so fix them now.
· Assess your strengths and build on them to increase the value of your company.
Get ahead of the game by planning for your exit now. There is no harm in being prepared many years in advance.
Learning that building a better company today and exit planning are the same thing will ensure that your exit will be a successful one.