How To Begin Exit Planning

Why should I start exit planning?

Every business owner eventually leaves their company. Some owners leave voluntarily (retirement, career change), while others  do so based on market changes, circumstances beyond their control, or because of countless other things.

As an owner, you are the champion of your business and it’s never too early to start thinking about your exit strategy.

You can choose to have your output develop organically, or you can take control to influence the outcome. The following questions will help you decide how you want to pursue your exit strategy:

  • What do you want for your company? Who will continue this work? Who will serve your customers in the future? 
  • What do you want from your company? Do you want to maximize the return on investment of your time and money?

There are two different pathways to choose from

Pathway #1

The first way, the future of your business comes organically. In this case, one of the following is likely to happen:

  • Due to illness, injury, or caring for someone who is an ill family member, you are no longer physically able to run your business and the business is not viable without you.
  • Death. Unfortunately you don’t get a lot of choice with this one … Your business becomes part of your estate. Your beneficiaries determine the future of your business.
  • You close the doors and walk away. The business is not sustainable; Once you’ve paid your expenses, there isn’t enough left over to pay you.
  • Someone else decides it’s time to close the business. Often this is the result of the intervention of another entity or person.
Pathway #2

On the second way, you actively shape the future of your company:

  • Gift the company to a family member, colleague, or other legal entity so that they can continue your work. This result assumes that your successor wants to continue your business.
  • You sell the business. Selling to a family member, friend, partner or even a stranger is a common dream of business owners

Wrapping up

You can use the time between now, and your exit to create value in your business that a Buyer is willing to pay for.  

Exiting your business is inevitable. The path you choose to take is up to you! 

Your next step

Take the Exit Readiness Questionnaire.

If you want advice on planning the exit of your business, book a meeting with us here.

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