Is It Ever Too Early To Plan Your Exit? / by Kerri
Ideally, your exit strategy should be part of your business plan from the outset, not just for businesses with outside funding. Every business needs an exit plan, even if you never got outside funding. If it wasn’t part of your business plan or your strategic plan, add it to your agenda for your next annual planning retreat to ensure that starting this year, you will lay out your exit strategy tied to your operational goals.
Here are four steps to ensure your successful exit strategy:
1. Take a holistic approach to planning your exit. That requires systematizing your whole business: not just finances, and cleaning up the books; but also:
• extracting value for you and your family
• maximizing value before you exit or sell
• the structure – what’s easiest to sell, or what can be monetized most easily
• systems ,strategies, process – get them out of your head
• team impact – organizational dynamics, contracts, continuity
• client/sales impact.
2. Consider and evaluate all the possible exit scenarios that might work for you and your business, e.g., sell a practice or sell your list; buyout by employees or partners, be acquired, appoint a successor or family member to continue the business, IPO. With each option, explore all the variations that might suit you.
Remember, your choices are greater the sooner you start planning your exit and the clearer you are on the goal you want to achieve and when.
3. Include your exit strategy in your annual goal setting. Align your short-list of chosen exit strategies with every goal they set so that each goal achievement moves you closer to your exit every year.
4. Make your exit strategy one of the criteria of every decision you make, every goal you set, so every goal you achieve is tied to and focused on that ideal exit strategy.