When is the best time to start your exit planning? When you are ready to sell or retire is too late, but can you start too early? The simple answer is ‘no’. To quote Stephen Covey, “To begin with the end in mind means to start with a clear understanding of your destination. It means to know where you’re going so that you better understand where you are now and so that the steps you take are always in the right direction.”
We all understand that if you have a clear end point in mind you are better able to navigate your way to get there, hence we call what we do ‘exit planning’.
At the point of setting up your business, launching to the market, moving through the pre-revenue stage and getting your first paying customers the last thing on your mind may be your exit. It’s not always that way as some business owners are very clear about the purpose of their business and set out with the intention of building to sell.
The two primary reasons for planning your exit from the beginning are to have an end point towards which you can direct your business and to establish from the outset good practices, processes and behaviours that will be advantageous when you come to exit.
If you are contemplating an exit and any of the following examples apply, you should consider how you evolve your role and what support you may need to make the changes:
- Major clients only want to deal with you
- You are fundamental to every proposal and sales pitch
- No-one can determine prices without your involvement
- Every recruitment decision is taken by you
- You are the source of all new product, service and process improvements
In short if you and the business are synonymous and the business can’t function without you, your exit may be trickier than you anticipate. Furthermore, your team may be inhibited and reserved in applying their full capabilities to the benefit of the business – and that doesn’t help you either.
The more embedded in the company culture these behaviours become the more difficult the change. So, beginning with the end in mind and accessing the wide range of support available to you will help you run your business in a better, more developed way that will help with your exit and also give you greater opportunity for growth during your ownership. To get started on your end story, contact Henchards.
(Photo by Markus Spiske on Unsplash)