Here at Destined, we’re advocates for the realization of business legacies. And that realization starts with entrepreneurs recognizing the right time to sell a business, and then laying the groundwork for the sale, with a competent exit strategy.
Because for a business to continue to succeed long into the future, relinquishing control to those who will take it to the next level, is often the most noble of decisions – especially for an owner who’s nurtured and grown that organization from scratch.
In our expanded website we’ve added a section to explain what an exit strategy is and why it is important. We also talk about it more in this post because it is the key to crafting a successful exit from your business. But you may be asking then: ‘…what are the actual benefits to a sound exit strategy and how will it prepare me for the big event?’
Let’s detail a few here.
Establishing a Vision
An exit strategy, first and foremost, is a plan for your company’s future growth. It first begins with understanding all the options for exiting your business, the pros and cons of each of those options, the timing of the sale and the proceeds you will need for the next chapter in your life. Once these are determined, the exit strategy outlines a clear business path to a sale that will be profitable and will set your enterprise up for future success.
Included in a competent strategy will be prospects on who would be taking over – family members, trusted managers, outside parties – and it will detail the course you need to take, in terms of business decisions, to that ultimate exit.
Knowing your Worth
Woven into the strategy should be an evaluation of your business, its performance compared to others in your industry, profits, intangible assets, and the markets you serve. All of these translate into one lofty number – the value of your business.
And even if you’re not ready to sell, that valuation process and the number it determines can be used as a benchmark as you continue to grow your business.
Knowing When it Should Happen
Part of an exit strategy is understanding what is happening in the market for your type of business, and deciding on the right time to sell, so that you have a higher likelihood of completing your sale for the highest valuation.
What this process also adds, is a distinct preparation period between deciding to sell, and the perfect time in the market to do it. During this time, you can concentrate on growth, cleaning up any issues and improving profitability – simply, it’s a window in which you can do all you can to make your business as attractive and valuable as possible.
Preparing your Mind
As an entrepreneur with a passion for your business, it can be tough to let go of your baby, your brainchild, your heart and soul. The exit strategy will help you keep focus on the fact that selling is very often the best thing for a business’s continued growth. What’s more, it’ll prepare you psychologically for when the day comes, so that you can maintain focus on building your business to its best potential.
As mentioned, a great exit strategy can be an assurance of a business’s future well-being – even if you may no longer be around to run it. And even though it may be hard to let it go, a sound strategy can help you build your business into a living, breathing entity – one you can be proud to set free into the world.
Destined can help you author a strategy for a profitable exit. And even if you’re not quite ready, we’ll help you plan and lay the groundwork for the moment you are.
Click here to find out more about the business exit strategy by Destined.