Do you have an exit strategy that you’re actively implementing or are you waiting for the mythical right situation to present itself?
A “sellable” business proactively, strategically builds toward their crescendo outcome; the sale of the enterprise. “Sellable” businesses have processes and systems, in place, for the most critical aspects of their operation. These strategies, SOPs and tactics, well-implemented, lead to the sought after outcomes-- improved efficiency, increased effectiveness, steady growth and, ultimately, a higher value for the business.
Both financial and strategic buyers look
for well-executed business plans.
Per Divestopedia’s definition, exit planning is the complete strategy for exiting a privately held company. It involves analyzing the financial, legal and tax options and repercussions for leaving an organization. Exit planning is done to hopefully ensure that business value is maximized at time of exit, the personal and business goals of the exiting party are met, and that tax burdens are minimized. Both financial and strategic buyers look for well-executed businesses plans. Again, the better your preparation, the higher the valuation, the more agreeable terms.
And while this concept makes sense intellectually, many business owners do not have a plan in place. In fact, according to a recent article, 88% of business owners have not been proactive regarding a plan for how and when they’ll leave their business. Often, due to running the business day-to-day or not knowing where to turn, they wait until they’re forced to organize one… resulting in a “hurry up” plan that almost always leads to increased frustration, a lower valuation and final sale price for the business.
Without an exit plan...
Should you have an exit plan for your business? Absolutely. Are they difficult to organize and implement? This will depend on whom you look to for advice. Certainly your financial, tax and legal advisors will play a role as you craft your plan and Acme Business Brokers offers and supports aspects of these services as well.
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