4 Tips On Creating Successful Business Exit Plans

Tip 1 – Don’t hope for a windfall gain on exit

Successful business exits require a great deal of planning. Those that just sit back and hope that a great exit will land in their lap are in for negative surprise. Those that don’t plan are generally sitting back and waiting for a great exit to land in their lap. Whilst this is understandable as many business owners are busy running their business, chances are that their energy will not be translated into a substantial capital gain on their investment. You need to take time away from operations to build value in your business strategically. Try setting aside a full day out of the office to focus on your exit plan. Research, Research, Research.

Tip 2 – Ensure you create a detailed exit plan

A detailed exit plan will help you to understand what steps you need to take in order to improve your chances of success in creating a profitable exit from your business. Some business owners don’t understand that an exit needs to be thoroughly planned. They are not aware of a clear process for creating an exit plan. Whilst exit planning is somewhat different from business planning, the process used to create a business plan and the key development milestones are often similar. Start with a proven planning process to assist you in the creation of your exit plan. The process used at Business Planning HQ can be used to effectively create your exit plan and assist you in valuing the execution of that plan.

Tip 3 – Find out how others in your industry have gone about exiting their businesses

Unlike marketing your product, marketing your business is an entirely different proposition. Do some research to find out how others have gone about this, and who they have sold to. By failing to plan the exit, many miss the simplest step in the process which is to undertake some preliminary research. Business Planning HQ Start by looking upstream at your customers and downstream at your suppliers. Both of these groups are generally natural acquirers of your business. Jump onto Google and search for Business Exit (Your Industry). This should bring up some interesting results as a starting point.

Tip 4 – Also Consider maximising your business valuation

Exit planning is not just about who you might exit to but must also include a strategy as to how you intend to maximise the perceived value of your business. This step is often missed by the majority of business owners. Consider trying to understand (from the acquirers perspective) what are the key drivers of value. Often one of the main ones is the prevalence of processes that ensure that the business can continue to operate with different management in place. Talk to some business brokers early about how to build value in your business. There will most likely be a number of actions that you will need to take between now and when you actually exit the business to maximise your valuation.