At some point you’re going to leave your business. Hopefully when you leave it’ll be on your terms. Understanding your options well before the day you leave your business is just good planning and good planning always helps you get a better outcome.
How you actually leave your business is part of what we call the exit planning process. I believe it’s important to know that exit planning is a process and not an event. The steps to an exit process often include the following steps:
- Knowing whether you can financially afford to leave your business.
- Knowing whether you are mentally ready to leave your business.
- Understanding what the business is worth to different buyers.
- Knowing what the options are for transfer methods for your business.
- Increasing the value of the business for you and a successor owner.
- Using passive ownership strategies as a way to test your ideas about leaving your business.
- Understanding the likely successful transfer method of your business.
- Finding a successor owner for the business. (or hopefully more than one successor)
- Going through the actual transfer process.
- Investing your proceeds.
- Planning for your family and yourself as an ex-business owner.
- Estate and legacy planning.
Some of the steps above are ones you can do quickly. Some might take years to accomplish, and for some you might just want to linger because you’re enjoying the trip and it feels like a nice place to stop.
How much time do you spend on any of the exit planning steps? Have you even considered that some day you’ll actually leave your business? Going through these steps over several years will help you leave on your terms. Isn’t that what it’s all about?