You know that at some point you will no longer own or run your business – nothing contentious about that statement. You may not know quite how much you can influence how and when that will come about and therefore how well you and your family will be ready for whatever comes next in your lives. This is about you.
But your business exit is also about your business, your co-owners, your team and everyone else involved and dependent on the company you have built. So, when considering your next stage of life and the part your business will play you have a lot to think about.
In its simplest form, planning to step back from your business involves the following:
- Preparing yourself so that you can release your money and get back your time
- Preparing the business so that it is valuable enough and attractive enough to meet your financial (and other) needs
Let’s start with you
When stepping back from your business, what do you need and want for your next stage of life? You may have financial goals, other activities and ventures you need time on which to focus, you may have specific ideas about what you want to happen to the business, its legacy and the team…or you may not yet have put much thought to it. But this is where it starts – setting out your desired outcomes.
Once you have an idea of what you want to achieve, there are three interlinked plans that need to be developed for your business:
- A management transition plan whereby you delegate and transfer day-to-day responsibilities to free up your time
- An ownership succession plan whereby you identify your preferred route (with contingencies) for passing on your ownership, releasing to you your money
- A business improvement plan that sets out the strategy to achieve the valuation you need to get your money and ensures your business is attractive to future owners/investors.
Our view is it takes time (two to five years) to put in place these plans and work them through before you and the business will be ready to move to the next stage. The help of a business adviser will make the development and delivery of your plans far easier and will help you keep on track for achieving the best outcome for you and your business.
In the next few articles, we will be looking at each element in more detail. Keep checking our news page for the latest content or give us a call if you wish to discuss your exit strategy.
(Photo by Johannes Plenio on Unsplash)