If an “act of God” occurred today, would your employees know what to do? Would a plan be in place for your company’s continued operations? The best businesses consider exit strategies, create growth plans and develop ways to achieve the best business outcomes long before it is necessary.
Thorough business exit planning should provide detailed instructions and guidance to an owner’s exit from his/her business. But this plan is not a laundry-list of what to do and when, it’s much more than that. It’s a comprehensive exit plan that will ensure an owner reaps the rewards of their hard-earned business success and that the business and its employees will be set-up for long-term success well after current leadership steps aside.
Things that are considered when assembling a comprehensive business exit planning include: the current state of the business’s industry, the age and health of the owner, competition, the interests of the owner’s family and the current health of the economy as a whole. If an owner waits to establish their business exit plan, they will have an increased risk that a personal or business change could suddenly occur that could decrease the owner’s options in exiting the business and possibly force them down a less-favorable path.
Just like an estate plan or a will, a business exit planning is an essential part of responsible planning for not only yourself, but for your family and for the employees that count on you. Stepping away from your business will most-likely be one of the most significant financial events of your life so why would anyone make this topic an after-thought? The following list will help you begin thinking about and acting upon completing a comprehensive exit plan:
1. Develop an action plan to maximize your business’s value and profitability. Creating the plan may be quite simple and quick, but carrying out the plan will definitely take time. Focus on value and profitability and regularly operate within your plan once it’s established.
2. Make sure your business exit planning and or succession plan aligns with your personal wealth objectives. One aspect of this step will require you to have conversations about your exit or succession and how you plan to compensate leaders upon their exit from the business. Have these discussions before unforeseen events occur that make this topic hurried and “mission critical.” This will put you at a disadvantage.
3. Determine objectives. This will require you to focus on short-term, mid-term and long-term goals. When considering these, approach them from both a personal and professional perspective.
4. Seek out a third-party, like an experienced business advisor or a mergers and acquisitions firm, to conduct a profitability analysis.
5. Have well-defined contingency plans established to protect you and your business from any unforeseen events. Employees (as well as the employer) will feel a sense of security.
6. Identify business value drivers and benchmark the value of the business.
7. Monitor your plan and when the time comes exit the business profitably and successfully.
Learn more about our business exit planning services here: fortunebta.com/exit-planning/
We at American Fortune have taught clients how to sell or buy businesses, performed business valuation services, exit planning services, mergers & acquisitions advisor services in the following areas of the USA: Columbus Ohio, Atlanta Georgia, Lexington Kentucky, Bowling Green Kentucky, Nashville Tennessee, Memphis Tennessee, Cincinnati Ohio, Dayton Ohio, Toledo Ohio, Los Angeles, Cleveland Ohio, Pittsburgh Pennsylvania, Baltimore, Maryland, Indianapolis Indiana, Chicago Illinois, Detroit Michigan, Flint Michigan, Tampa Florida, St. Louis Missouri, Kansas City Kansas, Des Moines Iowa, Minneapolis Minnesota, Louisville Kentucky, Oklahoma City, Oklahoma, Dallas Texas, Fort Worth Texas, Denver Colorado, San Francisco California, Salt Lake City Utah, Phoenix Arizona, Lexington Kentucky, Los Angeles California, San Diego California.