Being a successful business owner means looking to the future at all times. While no one starts a company with the intentions of leaving it, your success also hinges on a thoughtful business exit strategy.
Laying the framework for a successful exit strategy as early as possible ensures the future longevity of your business, and having a plan in place will make a seamless transition once the time comes.
In fact, business exit planning can be one of the most important steps you take for a successful business.
There are three common exit strategies you can consider and put into motion your first day of business:
- Leave the company to a relative or trusted partner – an attractive option for those interested in providing a generational family business.
This exit strategy can begin on day one and will allow your to business to continue on long after you’ve left it. Adopting this strategy early on creates a smooth transition, as you’ve had the opportunity to train your successor in your business model from the onset.
- Selling your business to a third party – this option can be very appealing for those looking to enjoy their retirement by completely stepping away from the business.
In order to use this exit strategy properly, you will need to make your business attractive to prospective buyers. Having this goal in mind from the beginning will allow you to structure the business accordingly so that you’re ready to present your business when the perfect buyer comes along.
It can take years to find the right buyer, so being prepared early has a distinct advantage.
- Reduced involvement over time – a very practical exit strategy for those who want to have a say in their business but would like to enjoy the freedom of retirement in their later years.
Planning for this exit early will ensure that everyone is prepared when the time comes, reducing stress and allowing new management to continue seamlessly.
Waiting until retirement to deploy this plan can lead to confusion and undermine the effective operations you’ve worked so hard to instill.
Which Business Exit Strategy is Right for Me?
Finding the right exit strategy means taking careful consideration of your future goals. The kind of retirement you would like to live directly depends on the business exit strategy you choose. Do you want to travel? Then perhaps a more hands off approach – like selling to a third party or handing down the business – is a better fit for your needs.
Knowing these goals early will make the transition much easier later on, and building your business with these ideas in mind gives your business sustained longevity – an attractive trait for anyone looking to buy.
It’s also worth remembering that exit planning should always be conducted at a strategic level and will depend heavily on the unique circumstances of each business. We can’t emphasis enough the thought and planning an exit strategy requires, and its very individualised nature. Give your planning the commitment it needs, as you would with any other part of your business.
Business exit planning early in your business can help you achieve financial freedom and focus on running your business with clear goals in mind. Looking to the future is what all successful business owners have in common. Don’t just have a successful business now – leave a successful business to future generations and enjoy the fruits of your labour, as well.