IMPORTANCE OF HAVING AN EXIT PLAN WITHIN YOUR BUSINESS PLAN!
It is imperative for every business proprietor to have a well-planned exit plan/strategy ready in view of an unexpected emergency exit from the business.
Some would say, developing an exit strategy is equally as significant as establishing the business.
A well-structured exit plan will maximize the existing value of your business in the event you go to sell. It will also considerably help reduce the time needed for the planning required to sell off the business.
In a nutshell, that is the Exit strategy procedure. Let’s look at each step a little closer.
An exit strategy could possibly be made a whole lot simpler if you have a good idea of the value you are looking at acquiring, as an owner that is about to exit.
Ideally, a full appraisal will be derived, at some point – generally within 12 – eighteen months of actual sale.
Despite the fact that everything may perhaps be going great in the business, you can never tell when you would have to sell off your business and then move on from it.
The following are scenarios when an exit plan for the business is going to be beneficial:
- An unexpected shift in current market conditions
- A proposal extremely too great to decline
- Decrease in consumers, distributors or essential staff members operating the business.
- An incapacitation or hypercritical ailment – family members or you
- If you are ready to retire
- Or perhaps your demise
An exit strategy for business is a work in process. A well-planned exit keeps the control in your hands and you are able to maximize the advantages from the sale of your business. Also while you have your business the processes you put in place also become your training materials for others.
The various benefits that a structured exit strategy offers you include:
- • It serves as a road road-map to others also it often is followed with or without you (in case of death or incapacitation) or a competently earned lengthy holiday break – a great deal more enjoyable!
• A plan provides you with a concept regarding the advantages in case of an exit
• It will give you peace of mind, simply because you have made your plans and are ready to tackle the unfamiliar situations.
The exit plan should be well documented and also analyzed on a yearly basis.
It really does not need to be the size of war and peace – keep the strategy brief and accurate. You should discuss the exit strategy with your loved ones, well-qualified consultants, and essential confidants. A trusted family member or friend should have knowledge of the whereabouts of the exit strategy.
Questions to give some thought to are:
- in what number of years are you considering exiting the business? For what reasons, are you considering exiting?
- How much cash are you going to demand from the purchase of your business? Who will be more than likely to purchase your business?
- Or who are you leaving the business to and do you have everything in place for them to run it.
A great book to help with strategy, exit plan and setting up your business for succes is The E Myth by Michael E Gerber
Putting and keeping a business together can be a challenge for anyone and getting the right plan together is essential for success and succession planning.