Why do the most successful entrepreneurs plan to leave their businesses from the day they start them? Because they know they can’t run them forever, and they want to maximize the return on their investment of time and money. So they identify the most likely exit scenario and work towards that goal. If their exit plan is to sell the company, they can build their business to be more valuable and attractive to a potential buyer.
But too few business owners have an exit plan; they just don’t think about it much until they are ready to leave or something forces them to act. If you don’t understand what makes your business attractive to a buyer you won’t realize full value when it’s sold. If you’re like most owners, the proceeds from selling your business will fund a large part of your retirement or your next venture – so exit planning is a prudent and necessary step towards achieving your goals.
A good exit plan will review the options and identify your most likely exit scenario, consider the financial implications, and make a plan according to your timeline. It should include input from your M&A, tax, financial, and legal advisors.