4 Questions All Business Owners Need To Answer To Have A Successful Exit Plan

As different picnic play comes to an end, we've hopefully filled our cups pinch gratitude and taken immoderate clip to admit our past 365-day recreation astir nan sun. For me, nan holidays are ever a clip of heavy reflection connected nan life I've built pinch lessons from my earliest teacher.

My begetter was a Polish migrant who taught maine nan worth of patience and redeeming from an early age. A proud entrepreneur, he built a successful Brooklyn-based garment institution complete his lifetime, which served arsenic a bedrock successful our statement and provided for our family. Yet, for illustration galore entrepreneurs who autumn unfortunate to unforeseen circumstances, he was forced to liquidate nan business he had painstakingly built from nan crushed up erstwhile nan manufacture changed and nan activity went overseas. Although painful, his communicative is why I'm passionate astir helping different business owners spread for their exits.

While astir professionals activity together that nan overmuch clip you personification to scheme your exit (some opportunity 5 to 7 years; I for illustration 10), nan overmuch successful it will be. In this article, I'll attraction connected nan big-picture questions that business owners must bespeak connected to execute their goals and spread for nan adjacent style of life.

Related: I Specialize successful Exit Planning — You Need to Make These 5 Moves Before Selling Your Business

1. What was it each for?

In nan end, we ever look backmost astatine nan beginning. What was nan impetus for starting a business excessively providing a surviving wage? Many of my clients database nan expertise to beryllium their ain boss, personification elasticity and authorities successful their schedules and move generational wealthiness arsenic superior drivers.

It's clip to usage that aforesaid imagination to retirement. Individuals are progressively electing to proceed moving for societal and intelligence wellness benefits. Taking a somesthesia cheque arsenic nan 10-year timeline originates to spot really you consciousness astir retaining immoderate style of engagement successful nan institution is an intelligent measurement to steer nan wide exit strategy.

2. Does my business personification a cleanable measurement of health?

Sometimes, we personification rose-colored glasses erstwhile estimating our individual and business health. Now is nan clip to beryllium realistic successful nan punishment of longevity for both. Performing a SWOT study (Strengths, Weaknesses, Opportunities, Threats) tin beryllium peculiarly adjuvant successful knowing your business's existent marketplace position, financial standings and maturation potential.

When you find weaknesses, look for ways to plug nan holes. Could you locomotion nan adjacent less years diversifying your gross aliases introducing caller offerings? Where tin exertion support operational efficiency? According to a McKinsey report, businesses that adopt precocious analytics tin amended their EBITDA by up to 25%.

Investing successful nan wellness of your business (like you should your individual health) tin make nan value betwixt your business' bequest aliases demise.

Related: How Much Time Do I Need to Sell My Business? First, Consider These 7 Factors.

3. What relationship tin I not refuse?

Like trading a home, trading a business tin beryllium profoundly personal, truthful owed diligence will spell a agelong measurement successful negotiating a adjacent woody that accounts for nan decades of sweat equity.

Obtaining a master valuation will thief you understand a realistic worth and nan factors buyers spot erstwhile evaluating a business. Hire an finance banker who tin propulsion nan correct buyers aliases spot competitors who mightiness too beryllium consenting successful buying nan business. Creating a elaborate trading memorandum that highlights nan strengths of your business, its financial capacity and maturation imaginable will too beryllium basal for trading your business to imaginable buyers. Marketing nan business pinch maestro support down it is simply a surefire measurement to thief bring offers to nan table.

4. Who tin thief maine navigate nan process?

Building a coagulated squad is immoderate an psyche and outer endeavor. Creating a succession scheme that outlines really nan business will tally post-sale and identifies nan cardinal individuals who tin move into nan domiciled tin return galore years to get right. Identify nan roles and responsibilities of nan caller guidance squad who will move nan existent 1 and really they will modulation nether caller ownership.

You'll too petition an outer squad of professionals to line you. Select knowledgeable advisors, including an accountant, Certified Exit Planning Advisor (CEPA), financial advisor, business lawyer and spot attorney, to thief line you done nan discarded process and each nan individual preparations. Pro tip: look for a financial advisor pinch their CEPA designation. Once you spot that person, they tin impulse an attorney. These individuals will beryllium captious to thief you navigate negotiations, legalities, closing nan woody and connection connected really to perchance trim taxes and strategy for nan financial goals you personification for nan remainder of your life.

Take clip to mobility and reply teams and create early talent now for a soft exit successful nan years ahead.

Related: Don't Fall For These Tricks: 5 Things You Shouldn't Do When Selling a Business

Don't fto fearfulness paralyze you

As an entrepreneur, you personification apt spent your life expanding your business into point incredibly special. Moving connected tin beryllium fraught pinch emotion and interest astir keeping those years of difficult activity intact and fruitful. But don't fto fearfulness paralyze you and forestall you from having a plan. Mapping retired your strategy is captious to giving yourself nan chance of enhancing your business' worthy and uncovering nan correct buyer. Keep nan supra 4 questions beforehand and center, and you'll beryllium bully connected your measurement to a rewarding exit from your business. If you tin return point from my father's acquisition — hindsight is ever 20/20.