At some point all business owners leave their business. The hope is that it is on their terms, not due to some unforeseen unfortunate situation. However, not all things in our lives are under our control. That is why each business owner should always have that possibility on their radar screen and be prepared. At its simplest level, that means always having the business operating effectively and efficiently, attractive for a sale. Besides a strong well-functioning business is much more enjoyable and profitable to operate.
Exit Strategy Planning
Formal exit strategy planning generally comes into play when the business owner is beginning to think about retiring or moving to the next stage in their lives. Ideally the exit strategy planning should begin two to five years from when the owner would like to exit the business. Each situation is different. Some key factors to consider are the readiness of the owner, the readiness of the business, and importantly will the business transfer provide the monetary value the owner needs or wants. If the latter is not satisfied, then some value growth actions will be in order, and making business fixes to increase business value will take some time to implement.
All this is discussed in more detail elsewhere on this website, but exiting your business doesn’t necessarily mean selling your business to highest bidder. It may, but it will depend on the specific situation, including the goals of the business owner. Sometimes internal transfers or other types of external sales are appropriate. These considerations are part of the exit planning process.
At Duke Business Advisors, we use the Pinnacle Equity Solutions process which is practiced by Certified Business Exit Consultants™ (CBEC™). This process is described later in the website.