Drops mic and exits

Exit planning – it’s probably not something you’ve given much thought to, as it takes so much to get a business up and running, the last thing you want to think about is it all ending.
But the best businesses have an exit plan. After all, what is it that you are doing this for? A place in the sun on retirement? Something to hand down to a family member? A business you can hand over once operating successfully while you turn your attention to something else?
Whatever your reasons, it’s essential you factor these wishes into your overall business objectives, otherwise you set goals that are meaningless.
An exit plan allows you to plan for what happens after – otherwise there’s no end in sight. So it’s essential to have one in your business – if you haven’t got one, then I advise developing one pretty darn sharpish.
Of course, your exit plan will undoubtedly change as your business does, and your priorities change, but it’s still important to have one in place, regardless.
So here’s what to do.
First, work out what you want the business to look like after you are no longer at the helm. Do you want someone that you know and who already works for you to takeover? Or do you want to sell and reap the profits? Your vision will affect how you plan your exit strategy, so it’s clear that you establish this from the outset.
Then, seek advice on what that means. If you want to sell, then you need to ensure that your business is fully prepared, and has all the factors in place that will appeal to a buyer. This is where expert advice will help.
Plus, an accountant can advise you on what a sale would mean in terms of tax planning, etc. so it’s worth getting them on board with your plan too.
You may need to ensure that everything is crystal clear and ready for a sale if that’s the route you’re going down, so accounts need to be filed and stored correctly, expenses, cash flow, employee contracts etc., can all affect the value of a business.
One of the things about being a business owner is that naturally, there will be things that are in your head, or that only you know how to do. So standard operating procedures and systems and processes should all be documented, so that without you, the business can continue operating smoothly. This is good advice in any event, as if you are suddenly taken ill, or need to step back from the business at short notice, it won’t all fall down around you.
Having employees in place who could keep the business running will work in your favour, so it’s worth looking at your turnover of staff, and seeing if there are any initiatives you can put into place to keep them with you, bonuses etc.
Even just key things like your buildings and amount of stock you have can affect the price of a business if you are planning to sell, so ensure that there are procedures in place and that forecasting properly will help you to avoid periods of oversupply/undersupply, or that you are having to dip into an overdraft/take loans etc to help you get through.
Overall, it’s all about preparation now, and it will all pay off in the long term. Think about what it is that you want to achieve, and then work towards that goal. And if you want any advice on how to get your business ship shape to hand over, then do get in touch.