A business can become a chain around your neck if you hold on to it too long.

Many business owners do not prepare their exit well. Like many aging couples who resist any suggestion to sell their home, downsize, or move into an aged care independent living facility. So many do not want to face mortality and can often make it difficult for their adult children to look after them. It can be similar in a business. The whole prospect of planning an exit can all feel too hard, and so instead, we get on with the day to day, and hope for the best. Meanwhile time keeps marching on……

I have spoken to quite a few people who have exited their business. Some did it well. Some were left with a bitter taste in their mouth as they did not achieve their hoped-for result. Most found their exit took far more effort than they expected. All wished they had planned further ahead, and sought more assistance earlier from a business valuer, financial planner, accountant, and business mentor.

 

Creating an exit strategy should be part of your original start up plan.  

Brad Sugars says rather bluntly, “The only reason to start a business is to sell it.” An entrepreneurial viewpoint. There are obviously other reasons to start a business. However, he has a point. Most business owners do not think about how they might exit until they are older and weary. To always have an exit plan that you can trigger at any time is very important. It helps to make sure you do not allow your business to become dependent on you, the owner. It keeps your perspective focused.

 

If you do not have an exit plan, now is the time to create one.

The best way to exit is to prepare well, optimise the strengths in your business, and fix any weak points.

The most common weak point in many small businesses is that the business is dependent on the owner. The best way to fix that is to write/record all the processes within your business. Do this in such a way that a 12-year-old can understand the way things are done. Teach and empower your team to operate without you. Even if the business has a very small team, make sure the processes are written down or video screen shot recorded.

You need to make the effort to lift the value of your business. Like a lot of homeowners, some things will only get fixed when it comes time to sell. It is far better to always have things running well and looking good so you can enjoy yourself now. That way you are always ready for the sale.

Leave while you still have energy to enjoy life. A business can become a chain around your neck if you hold it too long.

 

There are at least 10 ways to exit your business.

  1. Sell to market through a broker.
  2. Sell to a competitor.
  3. Merge with another business and leave completely.
  4. Merge with another business and retain partial ownership as an asset.
  5. Sell to your employees or some of them.
  6. Sell or transfer ownership to a family member or members.
  7. Install a manager and keep business as an investment.
  8. Walk away from your business. Just stop trading. More likely when you have a consultancy practice rather than a saleable business.
  9. Gift it to someone who will take full legal ownership.
  10. Close the business and liquidate any assets.

 

Which option is best for you?

Any of these options (and maybe some others) are possible avenues for exiting your business. It is a matter of the best solution for you. To work out the best option for you takes time and then requires planning. Ideally your exit plan with be created 3 – 5 years from when you finally finish your business.

 

Transition – an oft-forgotten part of Exit Planning

If you are thinking it is time to retire or wind down a little from business, make sure you have a plan for what your life AFTER business will involve. Life requires purpose. Work is one of the main things that gives people purpose. To build up a range of activities that have meaning and purpose for you is an important part of any transition from full-time busy work to a post work/business lifestyle. Without purpose, you will find retirement boring and unsatisfying.

 

Not many of us see ourselves clearly enough to solve our own issues.

I find that I need a coach to help draw the best thinking out of me. If this article raises issues for you then can I suggest you reach out for a conversation. I love to help business owners think about how they can build a successful business that enables them to create a great lifestyle for themselves and their family. In recent years, I have helped 3 people to successfully exit their business.

If you’ve got a level of success already, there will be things you already have achieved that you can leverage. I can help you develop those things that will enable you to optimise the value of your business. Your business needs to be able to operate without you to be valuable to anyone else. I can help you to create a workable exit strategy from your business.

To book a free consultation with John click here

 

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Over the years I’ve written many articles about growing your business! Here are a few of my favourites to help you integrate your work into all other parts of your life.

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