When should you start to plan your business exit strategy? For many, successful business exit strategy planning should start and be an integral of the business plan from day one.
Most entrepreneurs start their business with a good idea of how they would like it to develop and what it will look like as it changes over the course of time. Whether the vision covers months or years into the future is down to the individual. But the truth is that very few have a definite vision of the business exit strategy. But this may be the most important, most profitable/expensive decision that the business owner ever makes for themselves, their family and the business.
Who can plan for the future?
There are some businesses, where the business is so dependant upon one person that there is little chance of any residual value and the exit plan will be to extract maximum value from the business over the it’s lifetime. Even in this situation it is likely that a good customer list will have value to someone. If this is your business, then you should be maximising the value of your work, possibly looking at tax reduction strategies and planning for the future.
For most businesses, there will be a chance to sell to a number of interested parties, when the time is right. If your business exit strategy planning involves selling in the future in the main you will be looking for:
- Trade sales of some type, either competitors, suppliers or customers
- Your existing management
- Entrepreneurs looking for a new opportunity; and
- Anyone else.
Business exit strategy planning should always be flexible. You will never be sure when you will need to press th go button eith because of circumstance or opportunity. The best plan will have your business primed and ready for the roll out at the opportune moment.
How long will it take?
In an ideal world, you would have started to develop you business with a view to how you will step down from the start, but for a reasonable sized business it is likely to take at least twelve months to get all the pieces of the jigsaw in place and perhaps longer to make yourself dispensable and be able to produce accurate management information at the drop of a hat. There will be a considerable investment in time and some money to make sure that you maximise your final pay day from your business.
What should you do now?
The ideal time to start planning your exit from your current venture is probably now!
You can call me NOW to discuss how your business exit strategy can be developed to satisfy your retirement requirements or complete your details above and I will share some insights by sending you my report “How you can Increase your business’s value by 50%” or email: firstname.lastname@example.org.
Brian Russell FCA
Strategic Planning Partner
Tel: 01661 872004
Brian Russell FCA is a Chartered Accountant specialising in advising small and family run businesses on how to maximise the returns when exiting their business or handing it on to the next generation.