How to plan your business exit
Planning an exit strategy for your small business or startup
Business exit plans for company owners
Exiting your business at some point is inevitable. All business owners need an exit plan and it’s never too early to start preparing for removing yourself from the business or considering other ways out. For many entrepreneurs departure from their business means achieving the ultimate goal, business success and gaining the freedom back. Let’s discuss how to plan your way out.
When to plan a business exit
Even if you’re not planning to exit your business yet, it’s a good practise to run your company the way it will be prepared for your exit in the future. That’s why you should start thinking about your exit plan before you need it.
How to plan an exit from your business
First, let’s take a look at the possible business exit scenarios. There are a few possible ways to exit your business.
What are the possible types of business exits?
Here are a few examples of business exit strategies.
Business exit options:
- Going public
- Hiring a CEO to replace you
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Developing an exit plan
Here are some insights to help you navigate planning your business exit strategy.
Things to consider when developing a business exit plan
1. The numbers
Exiting or not, you need to know the key numbers showing that your business is a well-oiled machine. Those numbers include:
- Total turnover
- Operating profit
- Revenue per customer
- Number of customers you get every month
2. Business Processes
To be able to scale up and stay on top of the game you need a thorough description of all processes in your company. When you decide to exit, it will be much easier to proceed if you have the processes well described and ready.
3. The business 5 – 10 years on
Where can your business go after the startup phase? Think about the potential growth and how your company can look in the long run.
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4. Adding value
Do not stop investing in your business. Keep adding value to increase the future valuation and ensure the growth.
5. The person you need to become
Your personal development is key to taking your business to a new place. Consider who you need to be at the time of your departure from the company.
6. Potential buyers
Research and understand your potential buyers. Find out what they perceive as valuable and what you can do to increase the valuation.
I hope this gives you some insight into preparing your way out of the business as an owner.
If you want to share your thoughts, share with us in the comments. What is your exit goal? If you have exited a business in the past, what challenges did you have to deal with?