Do you have an exit strategy for your business?

Do you have an exit strategy for your business?

The recent media coverage regarding Richer Sounds, and Julian Richer’s decision to put 60% of the business into an Employee Trust got me thinking.  As a business owner it can be very easy to focus solely on the day to day running of your company and not plan ahead for the future and for a time when you might either wish to reduce your activity or even sell the business.

Developing your exit strategy is not something that can be achieved quickly.  It takes careful planning, an understanding of the requirements of both yourself and the business and of course making sure you have a team of people who you feel comfortable handing over control to.

Step 1 –Business Health Check – This will help you establish whether your business is fit for purpose.  It provides an objective overview and enables you to work out what areas need to be improved or established in order for you to achieve a successful exit and realise the most value for your business.  The Business Health Check  will look at four key areas of your business Time, Team, Money and Systems.

Step 2 – Prepare your Finances – you need to put together an accurate account of both your personal and professional finances.  This will do 2 things, enable you to consider what you need to exit the business and what potential value there is in your business.

Step 3 – What are the Options available – there are likely to be a variety of options open to you.  Do you want to sell up and retire completely, do you want to continue to have an involvement say as Chairman or do you ultimately want to pass control to your employees.

Step 4 – Speak to Investors – the next step is for you to speak to you stakeholders and investors.  You need to inform them of your wish to leave the business and outline the plan you have in order to achieve this.  You’ll also need to provide them with an overview of how you expect to repay them.

Step 5 – Develop your Leadership Team – in order for you to be able to step down you are going to need to have a team that you can trust to carry on the running of the business.  A strong Leadership Team is vital, you also need to start delegating elements of your role to them, this will also have the added benefit of enabling you to free up time to finalise your Exit Strategy.

Step 6 – Tell Your Employees – Once you’ve finalised your plans you’ll need to inform your employees.  This is likely to be emotional on both sides and something that needs to be handled sensitively.  It is vital that you prepare for any potential questions they might have.

Step 7 – Let your Customers Know – Again this is something that needs to be done in a thought through and considered manner.  If you’re stepping down then it’s important to ensure that you introduce your clients and customers to your replacement and reassure them that the business is set to continue in the same way as before.  If you are going to be closing your business then thank them for their support over the years and if possible refer them on to other businesses or services who might be able to help them in the same way that you have.

If this post has inspired you to think about your Exit Strategy  and you feel it might be worthwhile talking to a business coach to help you get your business ready then click here to send me an email, or give me a call on 07952 112432.  For more information on my business coaching services please click here.