When you started your business, you weren’t thinking of an exit strategy, were you? If it never crossed your mind, you’re in good company. Most people don’t, but they should. Let’s discuss why having an exit strategy is part of owning a business and every bit as essential as startup considerations.
Controlling Your Destiny
Control is a big issue for most business owners. Let’s face it; having control is a huge part of
why you wanted to run your own business in the first place. You control your rate of growth
You control your time off… your work/life balance. And you do not work at the pleasure of
someone else who can control your circumstances… and whether you work at all.
With this in mind, it’s hard to believe experts who say that over three-quarters of all business
owners have no written plan that allows them to choose the time and conditions of leaving
Timing and Preparation
In most cases, people leave or give up their business when events overwhelm them. They may
get divorced, experience a death in the family, or experience burnout. When this happens,
timing and preparation go out the window. At the same time, your ability to capture your
business’s value and set the terms you would like disappears as well. This is why you should
start planning an effective exit strategy today… regardless of where you are in your business
right now. Don’t give up control by leaving it to chance.
Options For Your Exit Strategy
Think about how you’d like to transition out of your business. Do you want to pass the torch to
a relative? Do you want to sell the business and travel the world? Get in touch with how you’d
like things to work out. Consider who, what, when, where, why… all the w’s! Perhaps you’d like
to turn the business over to a star employee. Would you like to remain active as a non-owner?
Maybe you would be interested in consulting. Or do you prefer a clean break? As you can see,
there are many possibilities. Take charge of your future, and start planning for it!
Valuing Your Business
As you grow the business, you’ll have accountants and bookkeepers who help you along the
way. Please pay attention to the financial reports and forecasts they give you when thinking
about your exit strategy! These reports are your first step to understanding just what your
business is worth. Ensure you understand the data on them and how you can use it to guide
your business’s forward motion. When it comes time to determine the value, you’ll want to
partner with accountants and other valuation professionals to do this. However, it is advisable
to have a strong understanding of your business’s financial statements and a good idea about
the business’s worth.
When You Need Help Developing Your Exit Strategy
When I founded my business, Health and Taxes, I had a deep desire to use my years of
accounting and tax experience to help business owners. I wanted them to become more
comfortable with the ins and outs of business, especially the financial health aspects.
Developing an exit strategy is a critical exercise in gaining control of your finances and your
future. If I can help you design your exit strategy or help with valuing your business, please
contact me. I’m available for consulting on any accounting and tax questions you have. Please
make an appointment through my Health and Taxes website so we can talk and figure out what
is the right solution for you.