A successful exit can be defined as one that meets the business owner’s individual needs and desires.
For some business owners a successful exit goal is about selling the business for maximum dollars. For others financial outcomes are not their first priority as they are looking for stewardship exits – by looking after their employees, customers and key suppliers and making sure the business continues after they leave.
When is the best time to start thinking about your exit goal?
The best time is when you first set up your business! It takes time to build and increase value. The difference between equity or long-term value that can be extracted when you exit, versus income is time frame. Start early, know what your business is worth and map out what needs to be done to drive value higher and ensure the business is more attractive for when you are ready to realise that value.
How can I prepare the business for my exit?
- The business needs to be sale or exit ready. This means processes that are well-documented, which are not dependant on the owner and ongoing sales and marketing channels are formalised for securing new customers.
- Think about life after your business. What is your plan and how will you separate from your business to ensure the new owners have a better chance at success?
- Understand your financials. Which assets do you want to keep and which will be transferred to new ownership. Are you considering retirement and do you have adequate funds?