If you are like most business owners, your days are fast-paced, your activities varied and your time precious—it’s likely that you are among the 87% of owners who have no written exit plan. Yet, despite the value you’ve created in your business, you will exit at some point and need to figure out how to reap the fruit of your efforts while leaving a successful, ongoing business legacy.
How can you balance the need to lead your company with maximizing its value and enjoying your golden years? Given the recent downturn you may feel that your company’s undervalued, making it a less-than-ideal time to sell. As the US economy continues strengthening, selling multiples are increasing and potential buyers increasingly ready. Regardless, to properly plan for an exit and maximize sales value, you’ll need to start planning rigorously at least 3 years, and better yet 5 years, before you’d like to sell. You need to consider the following questions:
- How can you maximize the business’s value between now and when you’d like to sell?
- How do you attract and assess potential buyers? What kind of buyer makes sense—a partner buying you out? A family member? Other?
- Will you want to have a role in the business post exit? If so, what will it be?
- Are there other owners? What are their needs in all of this?
- Is the business ready to survive without you? Is there a successor who can take your place one day? Are the key players on board?
- Is there a clear, effective strategic plan? Is it being executed, helping maximize the value of your business for its sale?
There’s a lot to consider here. Are you ready? Take the Exit Planning Readiness Test, Listen to Jim Gitney, founder of Group50 Consulting, speak regarding exit planning
About the author: Steve Sharp is a senior consultant with Group50®Consulting and heads Group50’s Strategic Execution practice. Steve and the Group50 team are all former executives with well-known manufacturing and distribution companies who understand what it takes to put together and manage the implementation of a successful strategic plan and exit plans. Group50 has designed a series of strategic assessments, workshops and strategic execution tools that drive successful business performance. Call us at (909) 949-9083, send a note to email@example.com. or request more information here.
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