No matter how big or how small, or how established or how new your company is, you need an exit plan. It doesn’t mean you’re necessarily planning on exiting any time soon, but it helps establish a future for your company and a strong footing for the rest of the team. It also helps you to plan for your own future.
Here are some must know facts about exit planning and why it’s so necessary to tackle this strategy sooner rather than later.
What Are Your Plans for Your Company?
You work every day on your pride and joy. What are your plans for it after you step away? You have several different choices for an exit plan, and it intertwines goals for the company and goals for yourself.
Two commonly chosen paths for business owners exiting their company include selling it through a broker or succession planning by either giving the company to a family member or to an employee who can fill your shoes.
Don’t Procrastinate Your Exit Planning
What’s holding you back from creating an exit strategy? Some business owners just don’t think about it, or have thought about it and push it back to a later date. A few of the more common reasons business owners don’t craft a plan include
• They think an exit plan isn’t necessary.
• They’re afraid of the unknown.
• Retirement is far off or not even on the table.
• They don’t know how to get started with exit planning.
No matter what your goals are for the future, an expert can help you craft the right exit plan for your business.
Reasons to Exit Plan Now
So you know what options you have and you know why you shouldn’t procrastinate with your exit strategy, but do you know the reasons it should happen now rather than at a later date even though you don’t want to leave your business anytime soon? Here are a few:
An Exit Plan Helps You Set Up Your Own Future
Of course, an exit plan is for your company’s future, but it is for you as well. Once you know when and how you’ll be leaving the business, you can start thinking more seriously about your next project, your goals, or even retirement. It also allows you to ensure you have enough retirement savings if that is your path. From traveling to spending more time with family to opening an entirely new business, you have a lot of options at this fork in the road.
And if you decide to sell your business? That could help fund your retirement.
You Never Know What’s Around the Corner
Sadly, none of us can tell the future. You may decide you want to retire early, you may have a health complication, or something else could pop up. An exit strategy helps protect the value of your company and ensure there is a plan in place if the unexpected happens.
You Will Eventually Leave the Company
Even if you wish to work at your business for as long as possible, forgoing retirement even, you will eventually leave the job. You’re not crafting a plan for an “if;” you’re crafting a plan for a “when.”
An Exit Plan Helps the Change Go Smoothly
While you may be ready to exit your business at any date, that doesn’t mean that the company is ready for you to leave. An exit plan ensures that all the right steps and strategies are in place to help that change go as smoothly as possible. This is especially the case if it is an unexpected exit. If your business is unprepared for the change, it will be an uphill battle.
Crafting the exit plan now will work to keep values, systems, and finances running correctly even after you walk out the door, alleviating your stress as well as your employees’ and the new owner’s.
It Helps To Protect Your Asset
It’s likely your business is the biggest asset you own. When you go to sell, the new potential owners would like to see a company that can run independently of it’s owner. This can actually increase the value of the company and entrepreneurs should always be taking measures to help the market value of their business.
Even if you crafted a business exit strategy today, it doesn’t mean you’re ready to exit tomorrow. It doesn’t mean your business is ready for you to exit, either. However, it does help up a stronger potential future for both you and the company. There’s no reason to procrastinate. Tackling this task today will only benefit everyone involved.
Are you not sure where to start with your own exit plan? Want a professional who can walk you through the process? Don’t hesitate to work with us.