Posts tagged with: successful exit

Exit Planning for Your Transition to Reinvention

Ideally, exit planning occurs before action in every area.

Too often business owners/CEOs assume that because they want to exit the business soon, that they just have to act to make it happen. In fact, they are often surprised by how extensive the planning is that they must work through before they can get out and transition to reinvention.

Exit planning must include each parameter on this list.

Exit Objectives – Before you proceed, you must identify your exit objectives for the business and for your life beyond the exit.

Value Drivers – You must identify your value drivers, the value drivers that will make the business buyer attractive and the value drivers that secure the future growth of the business and protect your employees.

Transfer Control/Ownership/Management – Control, ownership and management are not the same thing. So planning how to transfer these different skill sets to successors is essential. You need to break them into distinct skill sets before you decide who you will train to succeed you in each area.

Contingency Planning – When things are running smoothly, owners think contingency planning is irrelevant. But if illness or an accident incapacitates you, your valuation will plummet unless you have a contingency plan/continuity plan established, documented and ready to activate.

Wealth Management/Preservation – You have to decide how much of the illiquid wealth of your business you want to leave in the business, to maximize valuation and secure future company success vs. how much do you need to liquidate to achieve your exit criteria and the financial freedom to pursue your reinvention.

Successful Exit – Defining and planning what a successful exit means to you is important. There is no vanilla answer. It’s unique to you, your family, your goals, your business, the lifestyle of your dreams. If you can’t describe it, you will never know when the package on the table meets your needs.

Exit Options – The earlier you start exit planning, the more options you have, the wider range of exit vehicles, wealth vehicles and reinvention options you can have.

Information + Experience = Knowledge

When you decide to exit your business, and walk away from the business you built that you’ve owned from inception, you need three pillars to your foundation to make a successful exit.

They are your:

  • Mindset
  • Skill Set
  • Knowledge
Let’s talk about that third pillar this week.


Here’s a definition of knowledge in the context of the three pillars we are discussing: Mindset, Skill set and Knowledge.

Knowledge of your business is the combination of information you have or acquire, which is applied through the filter of your experience and expertise in your profession or industry.

Information + Experience = Knowledge

Knowledge + Insight =  Wisdom

Attitudes/mindset are often ignored in what is needed to learn to achieve your goals. Your attitudes are the most important of all learning components because your attitude/your mindset is the gatekeeper that determines how well you acquire, master and apply any skill set and knowledge.

From all your experience and expertise in your own industry, you have amassed a body of knowledge that likely puts you in the category of a master.

When you integrate your knowledge with the insights gleaned from all your experience and research, you have built up unrivaled wisdom in your specialty.

Now, however, in terms of your Knowledge, do you experience any of the following in your business?

  • The whole business is in your head – only in your head.
  • Don’t know how to plan, when to plan, when to find time to plan
  • No marketing plan, sales plan, financial plan or operating plans – except in your head
  • Don’t know how to automate or outsource
  • No operating procedures
  • No contingency plans
  • No exit strategy in place
  • Keep all expertise in the owners/ executives heads and private files

If even one of these is true for you – it is a flag of what is holding back your business from all it could be.

Indeed, in the real world, it is hard for your business to serve clients and make a profit, and address all these challenges at the same time. It’s even harder if you are still wearing all the hats in your business, because the ‘day to day doing’ – gets in the way of focusing on and making time for the visionary, strategic leadership tasks that are essential to your long term goals.

In each area where you are not an expert you always have two choices:

  1. Do what is necessary to acquire the mindset, skill set and knowledge to effectively deal with those obstacles or gaps.
  2. Hire someone to do the job for you.

When you decide to exit your business, you have the same two choices. You can take the time to become an expert in all facets of how to sell a business (very costly, time consuming and unrealistic) or hire a team of experts to make it happen so you can get out

When To Do Strategic Planning?

Strategic Planning

When and how long to spend on strategic planning depends on the company itself. At a minimum, any company serious about achieving goals, must allocate time for long-term planning, goal setting and review on a consistent annual basis. This project must be sacrosanct.

Especially, if you are already within the 5 year window of your target exit date, there can be no exception, no excuses for not doing strategic planning.

Your annual strategic planning should tie every goal, every system, every budget and hiring decision to your exit criteria and timeline. Following this strategic plan will help you position your company as one that ideal buyers will be eager to scoop up – maybe even before your target date.

But strategic planning is not just an annual event. You must then roll it back into goals, planning and tracking each quarter, each month and each week. At this granular level, your strategic plan will drive every decision, every expense and every task each employee works on thus increasing productivity and value daily.

To ensure your planning is done in a very comprehensive and detailed fashion consider the following guidelines. Implement your strategic planning process at each of these milestones

  • In the third quarter for the following fiscal year.
  • In preparation for a new major venture, for example, a new department, new product, new market channel.
  • Action plans are updated to be sure objectives, responsibilities, time lines and budgets are on course.


The attorneys report that historically,

only 10% of all the deals business owners want to implement, actually get to the closing table and get done.

The list of reasons why they fail is lengthy. It comes down to the owner’s preparation and stamina in mindset and skill set to get the job done.

An implementation is the realization of an application, or execution of a plan, idea, or policy. To implement a plan (e.g., a strategic plan, an exit plan, or a succession plan) is to carry it out, to accomplish all the details of the plan. When you commit to implement a plan or strategy, it’s a commitment to ensure the fulfillment of that plan by specified concrete measures.

A strategic plan and an implementation plan are not the same thing. The strategic plan tells you what to do, why, when and the budget to do it. The implementation plan spells out the details of how, the resources, timeline, requirements, etc. They are two sides of your exit planning to think through.

The key to your successful exit is implementation. Full implementation of your desired exit option, to transition to your reinvention, requires following through on a detailed, well-constructed plan. Your exit plan has many moving parts. You must constantly orchestrate all of them. Internally, you must coordinate your team, successors, experts, vendors, clients, budgets, prices. You must align the company goals, market value and corporate objectives with your personal exit criteria and priorities. Executing your exit plan cannot be delegated or outsourced. You must take charge of every step of this implementation to ensure you get to the closing table on your terms, on your timeline.

The challenge to your successful exit is also implementation. It’s a big load. Often, most of the pieces need to stay confidential and independent of day-to-day operations. Balancing your exit with daily operational priorities can be distracting and exhausting. I believe that implementation is where most business owners buckle under and can’t get the deal done because, from their point of view, there are:

  • Too many balls to keep in the air
  • So many new once-in-a-lifetime decisions to make
  • All the changes to make in the business, in their leadership and in their business model
  • So many different experts to bring up to speed – all charging full rates
  • All the contacts and negotiations that take longer than anticipated

Moreover, there’s the loneliness and isolation of working through this process which takes years, especially when you try to do it alone. Our clients at This Way Out™ Group LLC appreciate the support of a virtual partner at their side through the whole process.

Strategy and Planning Add Value to Your Business

You probably built your strategic plan when you launched your business. More than likely, you have not looked at it in a long time, never mind used it as a guide for building out your business. Strategy and planning add value to your business.

When you start preparing for your exit, that strategic plan and any newer versions become valuable intellectual property as well as the guiding strategy for your transition out.

Your business strategy will be a key selling feature of the business that will attract ideal buyers. It should articulate the goals, objectives and prospects of your business, and the implementation of your vision.

Your strategic plan outlines the objectives you will achieve, the order, the timeline and the tactics to be used. Your strategic plan becomes the blueprint for your company’s success and your successful exit.

Strategic Planning Benefits

Still not sold on the value of strategic planning in your company?

Some of the purposes and benefits of strategic planning include:

  • Clearly defining the mission and purpose of your business
  • establishing realistic goals and objectives consistent with that mission
  • defining the timeline and schedule for implementation.
  • Communicating those goals and objectives to all stakeholders
    • team
    • vendors
    • clients
    • shareholders
    • investors
    • experts/advisors
    • prospective buyers
  • Ensuring the most effective use of company resources
  • Identifying Key Performance Indicators to be used to assess and measure progress
  • Preparing and provide a mechanism for change [to be invoked when needed].
  • Ensuring maximum efficiency, effectiveness and integration across all departments
  • Providing focus and direction for all constituents
  • Increasing productivity by instituting processes, procedures, tracking and measuring
  • Resulting in improved communication, team cohesiveness and recognition of accomplishments when goals are reached.
  • Pro-actively solving potential problems in the company before they occur

Strategy and planning add value to your business from day one. That same strategy and planning add even more value to your business when you want to monetize it to get out.

Goal Achievers Set Goals To Ensure A Successful Exit Strategy. Do You?

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.

How to Set Goals That Ensure a Successful Exit Strategy

There’s a lot on your plate when you start a business. Of course, you need to be clear on your mission and vision, your business model, your market research, marketing and sales strategy and your operations to implement your business plan. You can be consumed by the day to day responsibilities and urgent demand. All of this eats up time.

There’s another critical piece that’s easy to put off but very critical to achieving your long term goals and that 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 5 recommendations to ensure you set goals that get you to a successful exit:

1. Choose the right exit strategy for your goals
You have monthly and annual goals for your business. You want to commit to these intermediate goals only if they are aligned with your long term goals and the ultimate goal achievement of your ideal exit strategy.

2. Set business growth goals aligned with your exit strategy
Your growth goals are essential to the healthy, strength and survival of your business. When you look at your growth goals in the context of the exit strategy you want to implement, be sure your growth goals are taking you in the same direction. Growth that is in conflict with your exit plan or competes with your long term goals will hurt the business and limit your ability to achieve your exit strategy.

3. Identify goals to increase value
The value of the business is not just in terms of assets or cash flow. It’s also in your intellectual property. Your intellectual property could be in your team, your processes, the relationships you cultivate and maintain with clients and vendors, etc. So your goals to increase value before your exit could be in these less quantifiable areas that translate into a much higher valuation for the firm.

4. Plan your exit strategy by intention rather than by default
This sounds like a lot of work. In fact, it is. But, if you don’t do the work to plan your exit – then your dream of achieving an ideal lifestyle, living your legacy and leaving a dynasty – then you are abdicating both the responsibility and the reward. If you don’t plan your exit by design, then you will settle for what you get by default.

5. Systematize your exit strategy to maximize value
The more you can systematize your business so someone else can run it equally well without out you, the more a buyer will be willing to pay you to keep it going. The better you are at systematizing everything, the easier it is for a broker to pitch and leverage that value for a higher price. This step takes discipline and consistency starting long before you intend to exit.

Apply these five recommendations to get the results you want. That’s how you achieve every goal you set. That’s how you ensure your own successful exit strategy

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