Even before becoming a Certified Exit Planning Advisor, I knew I needed to help fellow business owners plan for an effective business exit strategy. I realized my journey was similar to many of my fellow business owners going through an often difficult business transition, and the experience I had gained in understanding succession planning best practices could be the vehicle to harbor my desire to help.
One of the foremost considerations often overlooked is the time - and more specifically the timing - it takes to properly transition out of your successful business. Many times, implementing and planning a successful transition takes a longer and is a more complicated process than most entrepreneurs realize.
I believe Forbes may have said it best:
“Initial exit thinking should focus on the right timing for the best price: The exit should be a purposeful part of a company's overall strategy when you first invest, but also focus on the best timing for an acquisition. About half the companies that could be successfully sold aren't because their boards didn't know the optimum time to exit...often earlier than many investors assume.”
Exit Plan Timing Considerations You Should Be Aware of When Exiting Your Business
Timing is everything when it comes to successfully planning for and implementing an exit plan for your business.
Don’t be fooled in believing that time is not a factor. Consider the following:
It is never too early to start the exit planning process. I recommend at least 3 to 5 years out from your anticipated exit.
Don’t use the excuse that you don’t have time to start planning what you are are going to do with your business, or your life, after leaving your business. Exit planning should be part of your overall business strategy.
Businesses take time to sell and/or transition to management or family members. Furthermore, you have to consider the right time to sell your business. Ideally, this is when your business is on the upswing (as opposed to a plateau or decline), when market conditions are at their best and when you are you are financially and mentally ready to let go. If you don’t have a plan in place when these key timing events present themselves, then you won’t be ready and may miss an ideal opportunity.
You will need time to meet with a team of professional advisors (CPAs, valuation advisors, business and estate lawyers, financial planners, etc.). This team of advisors will ensure your plan takes into consideration your goals and all the aspects from legal to financial matters.
It takes time to create a strategic plan that will ensure that you align your personal, financial and business goals and ultimately realize the maximum value from your company.
ETS Exit Plan - Timing Best Practices
From my own extensive experience working with business owners just like you, the following best practices are essential to a successful exit strategy:
Start the planning process early
Assemble a team of qualified advisors and enlist their help
Know your business, personal and financial goals
Formulate a strategic exit plan that incorporates your goals
Know the options for exiting your business
Take advantage of the time you have now to plan your exit accordingly and when the time presents itself you will be ready.
That’s A LOT of things to consider when exiting your business, don’t let time get away from you. Take advantage of the time you have now to start planning.
Data indicates that 75 percent of baby-boomer owners who have already exited their businesses regretted leaving. This happens because they did not take the time to make a well thought-out exit plan, were not aware of their options, and did not make a plan for their life after business.
Will you make the time now to prepare for your exit or leave your business having no plan and later regret it?
The choice is yours.
Visit www.encompasstransitions.com for more info!
You can be proactive about your journey...question is, will you?
Please email me at sheryl@encompasstransitions.com, or give me a call at 970.389.4802.
I welcome your feedback and questions!
Have a great week!
-Sheryl