If you signed up to run a marathon, you would ideally spend the next few months following a training plan to help you finish the race in the best possible condition.
But when you started your business, did you make sure there was also a clear plan in place to facilitate your best possible exit?
It’s understandable if you didn’t, and you’re certainly not alone. When you’re caught up in the all-consuming whirlwind of starting and growing a company of your own, thinking about the end of the journey can feel irrelevant.
This is one reason why so many business owners neglect to include an exit strategy in their business plans. Another reason is the idea that planning your business exit means anticipating failure or disaster – for some business owners, ‘exit’ is just another word for ‘liquidation’.
However, just as your business plan guides effective day-to-day decision-making, your exit plan will help you shape and control a positive post-business future.
Methods of exiting your business
You don’t have to know exactly when you’ll exit your business (although some entrepreneurs start their companies with the express purpose of exiting after a specific period of time). You simply need to think about what you’d ideally like to happen when that time comes.
Some business exit strategy methods include merging with, or being acquired by, another company, or passing the business along to a family member. You could also have your existing managers buy you out, or sell your stake to an investor.
5 reasons to include an exit strategy in your business plan
1. You’ll have a blueprint for the future
A well thought-out exit strategy works as a clear goal to aim for, which should also help to provide extra motivation in the present.
Your plan could even help you determine when might be the right time to exit your business.
2. You’ll understand your company’s true value
It’s important to know how much your business is worth. This way, you will know if you need to maintain or grow, depending on whether the amount is enough to secure the future you’re looking for.
Sadly, I have worked with many clients in the past who, through lack of knowledge and planning, allowed their businesses to drift from a valuable and saleable resource, to a dying business with little or no value.
3. You’ll be more likely to attract the right investors
An exit plan shows that you have thought carefully about the future, growing and investing in your business with a particular goal in mind.
This is attractive to potential investors, who will want to be sure that your business is worth their time and capital.
4. You’ll help to motivate existing staff and customers
While it isn’t necessary to tell everybody about your exit plan, your own motivation to keep maintaining and/or growing your business will help to reassure staff and customers that you can keep up with their needs.
5. You’ll be in control of life after business
One day, you will leave your business.
Planning for this certainty means giving yourself the best chance to exit on your own terms, and secure the future you dreamed of when you started out.
If you’d like to discuss your own exit plan in more detail, please contact me to arrange a complimentary Discovery Call.