Set Your Exit Strategy From the Beginning / by Kerri
Begin With The End In Mind
There’s a lot to consider when you are starting a business. You need to be clear on your mission and vision, your business model, your market research, marketing and sales strategy; and your budget and operations to implement that business plan. It’s easy to get busy working in the business, making it a viable concern. That’s the fun and the immediate reward for your vision and effort.
Another critical piece that’s easy to put off but critical to your long term goals is your exit strategy. If you set your exit strategy as part of your initial goal setting then all your goal achievements will lead towards your ideal exit strategy. Here are two areas to explore to be sure you achieve your end goals.
Is Maximum Value One Of Your Goals?
- What does that mean to you?
- Goal achievement is only possible if you have a goal you want to get to.
Do you have a number you want the business to be worth?
- How long will it take to achieve your goal, achieve that number?
- How important is that number to your personal long term plans?
- Do you have a number that you need in the bank in order to secure your retirement?
- Do you want to live your legacy and leave a dynasty or do you want to work yourself into an early grave?
- Do you want to pass on the business to family or successors and create an exit package?
These are easy questions to ask. They are hard to answer. If you find yourself not doing this homework or you keep justifying why you don’t need to do this now, or you think it doesn’t apply to your business, then you are unconsciously jeopardizing your business and your future.
What Is Your Timeline To Exit?
Do you have a timeline to achieve your goal? You have a choice starting today.
- You can sell quick, or any time you want OR
- You can take the time to position your business to sell high
You can’t do both.
I strongly recommend you work actively on your exit strategy starting now if you intend to implement it in the next 36 months. You have 12-24 months of work to do before you engage a broker, attorney, or CPA if you want to position your business for optimum sale.
Think about how much work is involved in getting your house ready to sell, improvements, repairs, decluttering, staging and curb appeal. The same is true for your business to get the highest valuation and an ideal buyer.
You need a goal, an exit strategy, a valuation number you are striving for, and a timeline. To do all four, you must do two things:
- Implement systems for every aspect of your business, in detail.
- Get the business out of your head and documented.