I’m not thinking of selling my business yet, why do I need think of exit planning?

April 8, 2018

 

 

 

An important strategic consideration for Business owners is their Exit Strategy. This ensures when the time comes to move on, the business is operating to maximise the value received when marketed and sold. With the value maximised, the owner can depart with the financial resources to achieve their goals, whatever they may be.

 

When should the Exit Planning process begin?

 

It’s never too early to start planning, it may seem odd to be thinking about an exit strategy when you’ve only been in operation for one or two years. However, where do you want to be in five years? Have you set a financial or personal goal you’re aiming to achieve? Although not exhaustive, here are some of the reasons I’ve heard when clients say “I want to Sell My Business”:

  • Retirement

  • Health issues

  • Start another business

  • Require capital release

  • Poor Performance

The common theme among all of the above is that they are linked to financial performance and a goal is required to ensure actions taken are in support.

Consider these:

  • How much money do you need to enjoy retirement?

  • How would your family cope if you as the owner were struck with a serious illness?

  • What is the value of the business you are looking to acquire?

What are the benefits of Exit Planning?

 

Without thinking strategically, owners tend to operate on a day to day basis and the results they achieve are often left to chance. The benefits of starting your Exit Planning early are:

  • Business priorities aligned to Vision, Goals & Objectives

  • Performance & Profitability Improved

  • Personal Time Stresses reduced

  • Ability for Investment & Tax Planning

  • Increased attractiveness to potential buyers / investors.

  • Business value maximised

Contact us today so we can discuss Exit Planning with you.

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