All business owners will stop being business owners at some point. So, there is no better time to begin planning for the inevitable than the present. The earlier you begin planning, the more options you will have for a successful exit.
However, like any strategic plan, it can be difficult to know how and where to begin. With the start of the new year it’s also an ideal time for us to publish a basic “To-Do List” that will serve you in considering that most significant event as a business owner…your future exit.
DECIDE WHERE YOU WANT TO GO. Establish Clear Goals and Objectives for Exit and Your Life After Exit.
- When do you want to leave the business? Whom do you wish to transfer/sell the business to?
- What are your values-based and legacy exit goals?
- What is your post-exit “life-plan”? Business owners can often regret leaving when lacking a plan for life that replaces the sense of purpose and meaning they experienced in building their business.
- Update your Personal Financial Plan. Find out how much $$$$ you will need post-exit to do all you want to do. Is there a gap?
ASSESS WHERE YOU ARE. Without Accurate Data All Planning Becomes Meaningless.
- Get an accurate Business Valuation. If the business is your largest asset shouldn’t you know what it really is worth to potential buyers?
- Assess your business Value-Drivers and areas of Risk.
- Review your Business Continuity Plan for life transitions and unexpected death or disability. Co-Owners would include a review of their Buy-Sell Agreement to ensure alignment with the current goals of all owners.
- Review Estate Plan to ensure alignment with exit goals.
DESIGN AND IMPLEMENT A PLAN. Build Transferable Value and Enjoy a Future Exit On Your Own Terms and Conditions.
- Which Exit Route will best accomplish your goals? Sale to Third-Party | Sale to Insiders | Transfer to Family Members | Sale to ESOP | Absentee Owner.
- Focus on growth and profitability today. At the core of tomorrow’s successful exit plan is today’s profitability and plan for growth.
- Strengthen business value drivers. An owner with a sellable business will have more freedom in life and options for exit.
- Update a strategic financial plan for the business.
- Do you have the right Team of Experienced Advisors for plan design and implementation?
- Who will Manage the Exit Planning Project?
The most important thing you could do in 2020 would be to GET STARTED AND GET HELP if you have yet to do so. If you wait until you’re ready to exit to begin planning, you won’t be ready and neither will your business. Keep in mind, that “You don’t know what you don’t know” and, like in all other areas of life, that could end up being disastrous.
There is much at stake during this most significant event in your life as a business owner. Take steps in 2020 to be as responsible and successful in planning your eventual exit as you have been in running your business.
About the Author
Pat Ennis is the President of ENNIS Legacy Partners (ennislp.com). The mission of ELP is to help business owners build value and exit on their own terms and conditions. With decades of experience in financial services, for-profit and non-profit leadership and management, along with the founding of ELP in 2010, Pat has extensive knowledge and understanding of the many challenges faced by business owners. His knowledge base, experience, and training results in a goals-based, comprehensive approach for business owners’ who are intent on building transferable business value and exiting their business responsibly and successfully.
“A successful business owner with a thriving business has tremendous impact on many people, including: their family, employees, customers, suppliers, vendors, the community in which they do business and both the local and national economies. All of this impact… all that they’ve built… is at stake when and how they exit their business. We want to help them be as impactful in how they exit their business as they have been in building it.”