Fundamentals of Exit Planning

Establishing a well thought out exit plan is crucial to the successful transfer of your business, without sacrificing all of the hard work and financial success you’ve gained over the years. It is an inevitable fact that all owners will leave their business someday. Preparing yourself, your company, and the new owner is essential to leaving behind a successful business that will continue to flourish in the future.

Many business owners don’t know where to begin. Some business owners worry whether they will have enough money to last them through retirement, while others are concerned with the integrity of their business. Either way, having a strong exit plan before you are ready to leave the company will help ensure that the business will be able to go on successfully without you.

A few key steps are essential a well thought out exit plan. Begin by asking yourself the following questions: (possible resources are in parentheses)

-          Do you or will you have enough money to live comfortably? (financial advisor)

-          How much is your business worth right now?  (business valuation expert)

-          Have you started taking steps to increase the value of your company? (Investment banker and The Leadership & Legacy Group)

-          Do you plan on staying involved or walking away without responsibilities? (you)

-          Are you planning to sell to an inside or outside buyer? (you and broker/investment banker)

-          Do you have a business continuity plan should something happen to you? (you and The Leadership & Legacy Group)

-          Can your management team run this business without you? (The Leadership & Legacy Group)

-          Do you know what you plan to do post-business? (The Leadership & Legacy Group)

Honestly answering these questions, either by yourself or with the right mix of resources, will help you determine the necessary steps it will take to make a successful exit plan.

Important Considerations For Successful Exit Planning

Timeline: There is no better time than right now to start planning. But if you are looking for a quick exit, you may need to rethink. Exiting quickly will likely make achieving your goals more difficult. Building buyer value into the business before you actually decide to exit the business will likely increase your financial return.

Planning: It is smart to hire a reputable business advisor, broker, or investment banker to assist with the transition. There are so many complicated tax laws, insurance and estate planning vehicles and more, that trying to do everything yourself could seriously hurt your end of the sale.

Flexibility: Your exit plan must be flexible enough to navigate a changing economy, industry changes, staffing changes, and more. Most owners want to sell their business for a good price, or pass it down to a willing and responsible heir or both! They don’t want to liquidate the company.

The PLAN: Your exit plan should be a combination of personal, financial, and business goals and objectives that create the outcome you most want. It is important to look at the following areas to ensure a successful exit plan:

1.                            Your Business Plan – focus on the future even if you’re not going to be a part of that future business. Making both your company and your key employees more valuable is a major asset to the sale of your business.

2.                            Your Exit Plan – it is so important to have a written continuity plan in case something should suddenly happen to you. Also, prepping your key employees for your inevitable exit helps make the transition much smoother.

3.                            Your Financial Plan – know how much your business is worth and how much you will need to live off of after you exit.

4.                            Your Estate Plan – make sure to look at all aspects of your wealth, not just your business. Protect the wealth that you depend on by being proactive about the assets you have other than your company before the transition.

5.                            Your Team Planning – developing your team to prepare them to run your company profitably and sustainably will give you the peace of mind that your company will be run successfully after your exit.

As unsettling as exiting the business that you have poured your heart and soul into for many years can be, having the right plan to be able to successfully exit will not only make you feel better, it is necessary for the future of your business. Using the tips discussed in this post will help you organize your ideas about exiting, and get you one step closer to the successful exit you have dreamed of.

I'm Stuck! Six Ways to Release the Glue

We feel stuck for many different reasons, but when you boil it all down, most ‘stuckness’ comes down to some form of fear. It might look like overwhelm or denial or uncertainty, but at the root, it’s a form of fear. We are afraid. We don’t like to talk about being afraid, so we make excuses to externalize our fear. It’s not the right time to act. We haven’t figured out our plan yet. We need to gather more data. The economy is weak. Blah blah blah. These excuses serve to keep us even more ‘stuck’ because they allow us to justify why we are not acting. The problem… we are still stuck. If you are stuck, try one of the following actions and see if it helps you take even a baby step forward. Three baby steps give you one full step, so let’s get started:

1.       Remind yourself of what the compelling opportunity is if you were to move forward. What have you got to gain?

2.       Evaluate the real consequences of taking action now. It might not be as risky as you think.

3.       Brainstorm alternatives that reduce the risk – even crazy ones can show you a path forward, or can demonstrate that your current situation isn’t really that risky.

4.      Talk to someone who has taken this risk or a similar one and find out how they did it. Maybe you can apply some of their lessons learned to your situation, or maybe you can increase your confidence in yourself.

5.      Ground yourself in the wisdom and experience you bring and remind yourself that you have overcome many challenges before. Tap into the strengths that enabled you to do those and you may find they apply here too. 

6.      Go away. Really! Get out of your current environment and get some fresh perspective. Stop thinking about where you are stuck and immerse yourself somewhere new and different. Even for an afternoon. Get a cup of coffee downtown if you work in the burbs. Get a cup of coffee in the burbs if you work downtown.

Appraise the Value of Your Compliments

“The most exhausting thing in life is being insincere.”                                                                                                                                                 -Anne Morrow Lindbergh

I couldn’t agree more. Now, that doesn’t mean I am advocating that we all take a page out of Scrooge’s handbook and bring “Bah-humbug” back onto the scene...

Why flood your market with ‘atta boys’ and ‘good job’ compliments? It’s not that they are not sincere. I am sure you mean that ‘good job’, but what does ‘good job’ really mean? To preserve the value of your compliments, it all comes down to whether or not they are specific enough that the receiver really understands what you are complimenting --  and whether people can really trust that what you are saying is true and free of a personal agenda.

Sincere and specific compliments are hard work. Most people won’t bother. Finding the right words to describe specifically what you appreciated or valued in someone else’s actions is not easy. It requires paying enough attention to note the behaviors and then finding the words to describe them with the sincerity you feel.

Every time you give someone the gift of your words, remember, the quality of the gift you give is a direct reflection of the quality of character you have.

Let’s stop accepting or giving gold plated placations …

and instead strive to give the kind of compliments that are so specific and tangible that they are remembered forever.

Who will you give a sincere and specific compliment to today?