Step #3: Learn the Process of Exit Planning

For a successful exit plan you want to include these 4 steps:

Step 1: Include all the components of a successful plan.

Exit planning encompasses a wide range of activities that include:

  • Deciding how, when and to whom to sell the business
  • Identifying a successor if you intend to transfer rather than sell
  • Determining what you will do with your life when you no longer own/run the company
  • Taking steps to maximize and protect your assets (estate planning)

Exit planning also involves a process, not a one-time event. Depending on the owner and the state of the business, it can take several years to develop an exit plan. Once in place, it should be revisited on a regular basis as business and life circumstances change.

Step 2: Separate the job from the investment.

Exit planning for the CEO involves figuring out what to do after the business. Exit planning for the Shareholder involves turning an illiquid investment into cash and investing it in something else.

In a successful exit, each role accomplishes its separate goals.

Step 3: Position for the transaction.

Selling a business is much like selling a home — in order to receive full value; you have to get it in top shape.

Because positioning a business for sale can take several years, we recommend managing the company to maximize shareholder value rather than just top-line growth. By focusing on the areas needed to maximize value, you automatically keep the business in shape to sell.

Step 4: Time your exit.

Receiving maximum value for your business requires selling at the right time, which means paying attention to market and business conditions.

Market conditions encompass things like interest rates, merger and acquisition trends and the availability of investment capital. Business conditions have to do with your frame of mind in regard to running the business.

 

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Posted on Feb 15, 2014

Contact Info – David Bandars

 12110 Port Grace Blvd. #201, LaVista, NE 68128

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