Posts tagged with: plan your exit
Define Your End Game –Plan Your Exit From the Outset
If you are an aspiring entrepreneur, or an early stage entrepreneur launching your own business:
- What do you dream of achieving with your business?
- In the end, what do you want out of your business?
To ensure your business becomes a wealth-producing machine, you must define your end game from the outset.
In this presentation, exit strategist, Kerri Salls reveals strategies and secrets your expert advisors want you to know but no one told you.
You will learn:
- 4 reasons why you need to define your end game now (even before you make a profit)
- 6 long-term options that give you more choices and flexibility and can minimize your tax burden
- 4 short-term options if you intend to fast-track your business to an exit
- How to use timing, valuation, and contingencies to gain leverage
Kerri Salls, Managing Director at This Way Out Group LLC is leading a revolution in the exit planning field. As a prominent exit strategist and mentor who prepares owners and entrepreneurs to achieve their optimum exit plan, she helps owners establish a strong foundation to accelerate growth, and maximize value; and to design, execute, and orchestrate an exit strategy that creates wealth.
Irrefutable statistical evidence confirms that business owners are not prepared for the current market window to sell a business 2013 – 2018.
To take advantage of this sellers window, business owners need to get started formalizing a strong business foundation (e.g., strategic planning, contingency planning, succession planning, transition planning) at the same time as they balance accelerating growth and optimizing value in the business itself.
The research to date suggests that most business owners do not believe this strategic effort is important for them, their company, their team or their family’s future. Just to recap:
- In a 2008 research report entitled Business Transition/ Succession, research by ROCG Americas LLC confirmed that CEOs lack urgency because of the belief that “we can always do it tomorrow – a general feeling of invulnerability.” Survey participants’ No. 1 excuse for not having a written plan is still the same in 2013.
- In the Canadian Federation of Independent Business (CFIB) survey in 2005, “the No. 1 reason given for not having a written plan was that it was too early to plan. This reply was head and shoulders above every other reason given.” Yet, this feeling is contradicted by the facts which show that time is not necessarily on the side of the selling owner.
- Findings by the Mutual Survey of American Family Business in 2007 confirmed the statistical lethargy: “Almost a third have no plans to retire, ever; and another third report that retirement is more than 11 years away. Since the medium age of the current leaders is 51, this means that many people plan to die in office.”
- PricewaterhouseCoopers states in its 2007 report on Canadian businesses succession plans that owners over age 50 “seem unwilling to seriously look into options to transition ownership before they are forced, by age or illness, to give up the business.”
- A full 34% of the CEOs over age 60 in the ROCG 2008 study felt that it was still too early for them to plan their exit!
This “feet first” plan of going out with their boots on (providing no liquidity event, no succession planning, and no future for employees when they close the business) is prevalent. Not planning for the inevitable is equally absurd and irresponsible. And yet this is what 95% of all business owners do.
They are murdering their business. And it is totally preventable.
Change does not come easy or fast. To truly maximize the value of your business and walk away with the highest returns, you need to commit to a 2-5 year timeline that gives you the leverage you can’t get after a trigger event (health, family requirement, corporate or market changes, etc) precipitates your exit.
It’s never too early or too late to plan your exit. Our team at This Way Out Group LLC will take away the fear and frustration and facilitate the exit process and timeline with you.
When was the last time you thought about how to cash out of your business?
Is it a topic you avoid? Do you only think about it when you are at the end of your rope after a really bad day? Is it a black hole you know nothing about?
Or do you include the long-term impact/implications in every decision you make? And tie every short-term decision and strategy to where you want to end up so you can cashout?
HARVEST YOUR WEALTH gives you the foundation for all those decisions in bitesize pieces so you can start planning early, to get out on your terms and on your timeline.
It’s never too early or too late to plan your exit. But you must make a plan and start executing on it now if you intend to cash out of your business to cash in those plans for reinvention (what comes next).
Start here, http://harvest-your-wealth.com
HARVEST YOUR WEALTH is for business owners who need to start thinking about how to sell, scale or pass on a business to successors. It’s not for advisors, transaction experts or buyers and their agents. It’s for you, the business owner who has put their life, spirit and soul into the business.
It’s only when you cash out of your business, that you can begin to cash in on the future of your dreams. To pursue that reinvention, you must have a plan to get out with the maximum value you can achieve for your business.
Business Exit Planning Is Easier Than The US Military Exiting Iraq But More Complex Than Selling A House
It’s true. Business Exit Planning Is Easier Than The US Military Exiting Iraq — But More Complex Than Selling A House.
The majority of business owners avoid, procrastinate, deny, and postpone any discussion of business exit planning. The statistics consistently report 95% of all CEOs find excuses to not plan their exit.
The anticipated fear and overwhelm are exaggerated. When you put it in perspective, exiting your business is far easier and produces many more reasons for you to celebrate, than the recent US military exit from Iraq.
No CEO Can Do It Alone.
Just like it took large teams of experts and years to plan and implement the US military exit from Iraq; you need to surround yourself with a team of experts who know more than you do about exit strategies and achieving your exit objectives.
I concede that your business exit is not as straightforward as selling your house or buying investment property. But, with a little help from your exit strategist and your transaction experts, you can focus on what you do best in the business while your team streamlines the process of exiting your business on your terms and on your time line.
The absence of planning is one of the deadliest oversights a CEO can succumb to. CEOs know better. They just don’t invest the time and effort to plan their exit. The default option is that you will exit your business feet first or worse, – close up shop with nothing to show for all your time, effort, expertise and resources invested. Too many CEOs resign themselves to never monetize their business, never fulfill their dreams or live their legacy.
Business exit planning is easier and much more inexpensive than the US military exit from Iraq. In fact, exit planning actually will make you money, make the business stronger and more valuable, and provide a plan for your next steps, your reinvention after you exit.
If I were to ask you, as the CEO/owner of a thriving enterprise, ‘Are you expendable?’, what would your answer be? The automatic knee-jerk reaction is ‘Of course not. I’m the CEO. I’m indispensible to the organization.’
But, in fact, in business, that’s the wrong answer! Indeed, you, wearing your CEO hat, want to become expendable. You want to be planning for your exit from the outset, from the very beginning.
To achieve your goal of being an ultra-successful entrepreneur, becoming expendable must be part of your exit strategy.
Your big payday, when you get to cash out on your business, is when you exit (e.g., when someone else buys your business). If you are still indispensible to running the business; if all the intellectual property, goodwill and value of the business is tied up in you; the business is not buyer ready. If the business is not buyer ready, your big payday is still just a hope and a dream.
Once you decide to exit the business, one of your primary tasks is to transition day-to-day operations and transfer that responsibility to your team. To increase the value in the business, to ensure that value can be monetized you, as a successful entrepreneur, must make yourself replaceable therefore expendable.
Failure to shift responsibilities and remove yourself from any operational role is a big mistake that exiting CEOs struggle with. It’s emotional, it’s strategic, and it’s tactical.
Just as you didn’t build the company or grow the company overnight, you can’t disengage from daily operations overnight. You can’t go from being indispensible working long hours, to being expendable overnight. These pieces of your exit strategy take time. They take time to plan and implement – likely years before you exit successfully.
To see if you are ready to develop your exit strategy and/or help you plan your exit on your terms, on your timeline, request a free assessment here.
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.
Goal achievers begin with the end in mind and an absolute conviction and commitment to achieve their big bold audacious goals. If you have an exit strategy for your business, you are already setting your business up for success, achieving outrageous goals and on track to realize your exit strategy. If you don’t have an exit strategy, you are not alone. Most businesses (of all sizes) never plan their exit strategy.
That’s not to say this is a good thing; just that the majority of businesses skip this step and then wonder why they can’t exit when they want and the way they want.
When Is The Right Time To Plan Your Exit Strategy?
There is no wrong time to plan your exit, unless you never do it.
The right time is the moment you realize that you don’t have one. That could be while you are starting your business; it could be when you launch and go live; it could be part of your annual planning retreat or your long-term planning strategy. The wrong time to plan your exit is the last 12 months before you want to move on.