Exit Planning Could Save Your Business
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Because you own a business, you have an exit strategy. Right? Your answer is probably “No,” which is typical for many business owners. You will eventually exit their business… even if you run it until you die. But then what?Image of article-3 on virtual assistant

Not having an exit strategy before starting or buying a company is a dangerous proposition. An exit strategy is critical to your personal plan as well as your business plan. It helps you prepare for the future but also allows you to be ready if something unexpected happens such as an unsolicited offer to be purchased.

Considering you want to exit your company, will allow you to build it successfully and get a higher value when it does come time to go. Exiting could include selling to an outsider, an investor, a partner, an employee, or a family member. It could also mean not completely leaving but just selling, or giving up, enough interest to relinquish day-to-day control while still maintaining an income.

Without planning for these strategies, you will have a harder time building the value you need to sell at an attractive price. You need to set up the correct structure to allow you to sell the business or even give it to a family member. Unfortunately, the fact is that almost all small businesses are dependent on their founders. That makes it more difficult to sell if the business owner wants to eventually have nothing to do with the company after the sale.

Having a CFO help you with the structure of an exit plan is a good idea, especially since most business owners tend to over value their company’s worth or future worth. They also do not know how to handle things internally in terms of employees when it comes to exiting the business.

Here are a few things you can consider for an exit plan:

  • How would you like to exit your company (full sale, partial sale, asset sale, etc.)?
  • Who would you like to sell your company to (competitor, experienced owner, family member, etc.)?
  • How long are you willing to stay on to help the buyer?
  • What is your target profit on the sale after paying off any debt?
  • Are you willing to hold a note for the buyer?
  • What are your plans for your employees?
  • What do you want to do once you are no longer involved in the company?
  • Where will your income come from once you exit the company?

Hopefully, you now realize that owning a business also means planning to no longer own the business. Set yourself and your company up to reap the rewards of your hard work. Allowing yourself to retire or move on to other ventures is not something to be taken lightly. Good luck and remember that a CFO is always here to help.

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