Building your company involved an exciting process that included lots of dreaming and hard work. You had little time to think about anything besides success, and your effort paid off. During the frantic running about and organizing, you might have never thought to plan for your exit. At first, you thought you would never want to leave your business, but after it has grown, your priorities might have changed.
Creating an exit strategy gives you the clarity and freedom you need to leave your company when the time seems right. You can plan the process in ways that minimize the disruption you cause and give its new owner the best possible chance for success.
Getting out the rat race and avoiding the trapped feeling supplied by traditional 9-to-5 jobs often motivates people to go into business for themselves. As time passes, however, you might begin to feel trapped again, wishing there was a way out. After all, you worked hard on your business, and it likely has become your largest asset. Abandoning it now might feel wrong. Still, time changes things. Health problems can take their toll, or better opportunities might unfold.
Having a plan for succession in your business will relieve the pressure you feel when you think you cannot afford to move on to something else. Regardless of whether you want to sell to someone in your family or on the open market, create a written plan that you can use as soon as the time seems right.
Preparing the Transition
You can prepare for your exit from the moment you start building your business. As you obtain documents including licenses and intellectual property, make sure you file them together a portfolio that contains your exit strategy. Without proof of the value of your company and its assets, you won’t get a fair price when you sell your firm.
Sound bookkeeping and accounting practices consume a substantial amount of time and energy, and so many business owners ignore those functions as they focus on growth. Don’t fall into that trap. When the time comes to leave your company, you must have all these records in order. If you don’t, you’ll either have to spend an inordinate amount of time performing audits and corrections or sell your operation at a discount.
It’s Not Too Late
Don’t get discouraged if you now realize that you made a mistake by not including your exit strategy as part of your business plan. Start planning now for your exit and act by collecting and organizing your documents and records and identifying potential successors. If necessary, meet with a business attorney or a business consultant who can help you make comprehensive preparations that will maximize the resale value of your business.