An exit strategy is a written plan outlining the transfer of ownership of a company from one owner to another. We recommend creating an exit strategy LONG before it becomes necessary. As a business owner you always want to keep your options open and be prepared if your circumstances change. The preemptive action of putting such a plan in place is the difference between a well-planned, orderly transition and leaving you, (and your family’s), future to chance.
Having an exit strategy does not mean that you have to sell your business. Far from it! It means your business has great financial records, is positioned for, and has a plan for growth, is staffed appropriately so that you could leave your business for 30 days or more, and that you have confidence that the business would run smoothly in your absence, if not grow. It means that you have plans in place for replacing employees if they leave and that you are not overly reliant on a single customer or supplier. Your cashflow is excellent and you have a well-positioned product or services that helps you stand out from the crowd. This kind of business is not only ready to be sold when the time is right, but it is a pleasure to own.
Research shows that 70% of business owners do not have an exit strategy, leaving the future of their enterprise and potentially their own or their families financial future, un-protected. We recommend business owners create an exit plan early and revise it annually, so that they are ready if life’s circumstances change suddenly. Starting early, laying the groundwork for a successful exit, gives business owners the best chance at accomplishing their personal goals and their business and personal financial goals. .
When you are on a journey, the two things that are essential to know is where you are now and your destination. The first step in establishing an exit strategy is to get clarity on your destination. Define what you are trying to achieve for your business, for yourself, for your family. As you project into the future, you need to figure out what your vision will cost. The second is getting an accurate picture of where you are. A confidential pricing analysis from The Liberty Group of Nevada, Inc., will provide an expected selling price range and will provide you a couple of suggestions on how a transaction (today) could be structured given your current size and condition.
Price and options are just the beginning. We recommend getting a comprehensive assessment of the “Sellability” and value of the business. The Value Builder System uses an interactive tool to analyze a company across eight different value drivers followed with pragmatic recommendations on how to improve their business making it more valuable.
Value building takes time, starting with an organized strategic approach, driving toward a clear vision will make it an adventure instead of a trackless swamp.
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Our Certified Exit Planning Advisor will work with you and your advisory team to create a comprehensive exit strategy in writing, that can be updated in the future as your business grows and changes. We work with your Financial Planner, Tax Accountants and if necessary, lawyers, to ensure that you are leaving the legacy that you envision and enjoy the retirement that you deserve.
To start the process of establishing an exit strategy for your business, contact a licensed business broker from The Liberty Group of Nevada, Inc., who will assist in beginning the process to develop a plan that will satisfy your needs before, during, and after your sale.