Ready For Your Next Adventure

Developing an exit strategy is an important part of running a small business, even if it’s not something you plan on executing immediately. If you are looking to sell your business in the next 3 to 5 years, extreme focus on profit and sales are required. Here are some tips to help small business owners create a solid exit strategy:

1. Start planning early:

Even if you don’t plan on exiting your business anytime soon, it’s never too early to start thinking about your options. Overall economic issues are unpredictable, as are challenges within each vertical or geography. The time to exit can come more quickly than you anticipate.

2. Consider your goals:

Think about your long-term goals and what you want to achieve with your business. Is this a lifestyle business or do you need to have an exit to insure your retirement? Do you want to sell it to a larger company, pass it down to your children, or simply close it down and retire?

3. Keep good financial records:

Accurate financial records will be important if you plan on selling your business, so it’s important to keep track of your finances from the start. This will save you lots of time, frustration and increase the value of your deal at a sale or transition of your company.

4. Build a strong sales process and pipeline:

A strong process and pipeline can make your business more attractive to potential buyers or successors. Focus on developing a professional, top notch sales process complete with talent, transparency and strong lead generation.

5. Determine your business value:

There are a number of methods for valuing a business, such as the multiple of earnings method, the discounted cash flow method, or the asset-based method. Consult with a professional, such as a business broker or accountant, to help determine the value of your business.

6. Create a transition plan:

A transition plan outlines the steps that need to be taken to transfer ownership of the business. This can include a timeline, a list of tasks to be completed, and a plan for communicating with employees and stakeholders.

7. Review and update regularly:

Your exit strategy should be a living document that is regularly reviewed and updated. Keep an eye on industry trends, market conditions, and changes in your personal goals and adjust your strategy as needed.

Remember, an exit strategy is not a one-size-fits-all solution, and it should be tailored to your specific business and personal goals. Consulting with professionals, such as attorneys, accountants, fractional leaders or business brokers, can help you create a solid plan for the future of your business.