Business Exit Strategy – When to start planning your business exit strategy
One of the big questions in planning your business exit strategy is when should you start? The answer is of course probably sometime ago, but today would be better than next week! Hopefully, whilst you have been preparing your business plans, you will have had some thoughts about how you would eventually retire or hand over the reins, so you have in reality already started the process of planning your business exit strategy..
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 how their exit strategy will look. But this may be the most important, most profitable/expensive decision that the business owner ever makes for themselves, their family and the business.
For many small businesses and their owners there is never really a formal business exit strategy put in place. Exit plans come in all shapes and sizes and vary from “one day all of this will be yours” to “they will take me out of here in a box”. Better than these is the situation where a definite timescale is put on the process as at least there is an end date. However, without a plan and time tp implement it there is a risk that the process will not go as expected.
By starting to plan early for a the ownership or management of your business to be transferred it is possible to at least remove as much uncertainty as possible from the process. Everyone is aware that uncertainty is bad for business, and planning is the best way to remove it.
Initially, the plan does not need to too detailed and any timescales and the actual logistics of your exit strategy will be only approximations, but by putting them in writing and recording them they are one step closer to taking effect. In addition, removing the uncertainty will allow you to implement a business plan to move towards the goal that you have set. It is also a good time to look at how you can make improvements to your operation to ensure that you maximise return that you receive.
As with most things in life forward planning will allow you reduce uncertainty that surrounds planning a successful business exit strategy and also to react quickly to any unexpected opportunities that come along. A good plan will allow you take your time and not have to take the first offer that comes your way and quite possibly will allow you end up running a better business than when you started to process.
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Alternatively, if you would like to discuss your situation, please call Brian Russell FCA on 01661 872004
Brian Russell FCA is a Chartered Accountant specialising in business development particularly within small and family run businesses to maximise the returns available when exiting their business or handing it on to the next generation.