Perspective for Exit Strategy Planning

I’ve seen it happen far too many times, and it’s always a sad situation.  The Principal of a business, the driving force behind its success, finds themself ill, facing a family crisis, or other unexpected circumstance.  Suddenly, they need “out”  and it’s a fire sale. Selling can be an organized, rewarding process, or it can be a gut wrenching and depressing end to what was once a gratifying career.  The difference between the two is up to you.  One is the product of advanced planning aimed at maximizing profit and expediting a sale.  The other is the result of wishful thinking and procrastination. A good Exit Strategy starts with simple awareness:  Some day you will retire.  So, even if you are not planning to sell your business at that juncture, you should at least acknowledge it as a posibility and make it your job to understand the process. I cannot tell you how many businesses I have sold for owners who "planned" to leave the company to their children.  The only problem was, … [Read more...]

Do You Have an Exit Plan?

"Exit strategies may allow you to get out before the bottom falls out of your industry. Well-planned exits allow you to get a better price for your business." From: Selling Your Business by Russ Robb, published by Adams Media Corporation Whether you plan to sell out in one year, five years, or never, you need an exit strategy. As the term suggests, an exit strategy is a plan for leaving your business, and every business should have one, if not two. The first is useful as a guide to a smooth exit from your business. The second is for emergencies that could come about due to poor health or partnership problems. You may never plan to sell, but you never know! The first step in creating an exit plan is to develop what is basically an exit policy and procedure manual. It may end up being only on a few sheets of paper, but it should outline your thoughts on how to exit the business when the time comes. There are some important questions to wrestle with in creating a basic plan and … [Read more...]