One of the most overlooked questions by any business owner is “When do I get out of it?” It’s something every business owner needs to know and plan for.
Being prepared with a sound exit strategy means you can enjoy your business ownership, secure in the knowledge that you’ll be able to leave when you’re ready, not because you have to. Part of every business plan should be an estimate of your time in the business.
Are you in it for five to ten years with the idea of selling out for a profit at a predetermined time? If so, you need to have a good idea of the time you want to sell and the price you expect to get.
Your departure from the business might be accomplished in phases.
It’s often a big help to selling a business if the former owner is willing to stay around in a defined capacity while the new owner acquires an in-depth knowledge of all the systems and processes.
This can also help you make a gradual adjustment if you’re retiring or planning a ‘holiday’ from owning a business for a time.
Remember too that circumstances can change. You might want to sell out well before you’d intended, or even that you want to stay on for a longer period than you anticipated.
You always need to keep operating procedures and financial reports up to date using comprehensive management reporting systems to run a business properly.
The big added benefit is that this will facilitate the valuation and due diligence processes in a sale.