You’re just starting your business. You have a deep passion to serve your customers and provide the very best products and services available. Thinking about how you’re going to exit the business is likely the last thing on your mind.
Unfortunately, failing to plan for the end means that you aren’t sure where you’re going. Yes, your business can grow and develop, and an exit plan might materialize. It’s a much better idea to plan for your exit from the beginning.
Best of all, with an exit plan, you’ll have an easier time winning over investors. They love a business plan that shows them how they’ll get their return on investment.
Possible Exit Strategies
What are the possible ways you can exit your business? There are several.
If you’re a sole proprietor without investors, you can simply increase your personal income from the business in the final years. At the end, close the business, liquidate, and retire or move to your next venture.
Other companies might plan on growing to the point that they can go public. Once your business is publicly traded, you can sell your shares when you’re ready to retire. Your management and employees will choose a new leader and move forward.
Or you might decide you want to sell the company to another entrepreneur or a larger firm. To do this, you need to be aware of who needs your technology or products and cultivate a relationship with them as early as possible.
No matter how you plan to finish your involvement with your company, whether it’s in three years or twenty, you need to plan for it now.
Step 1: Design the Business to Run Without You
The biggest mistake business founders make is centering the business on themselves personally. It’s easy to do — after all, you have the passion and the vision, and in the early days, you might have the most expertise as well.
As your company progresses, you may want to bring in a CEO. You might be tempted to be the CEO yourself, but this can hamstring your company. Independent leadership helps you grow in new ways and gives your company an independent leg to stand on.
You should also build work teams and ensure that you aren’t the primary face that the customer sees. That way, when it’s time for you to exit, the company will continue to run smoothly.
Step 2: Keep Your Finances in Order From the Beginning
When a business owner wants to sell their company, one of the biggest challenges can be getting the financials and documentation in order. You need detailed historical financials as well as projections for the future.
If you plan to sell as an exit strategy, develop a process for creating and storing these documents right away. It will make everything much easier when you’re ready to sell.
Step 3: Decide How Much to Say
You probably don’t want to publicly broadcast your exit plan as soon as you found your company. Customers and partners will have a hard time trusting you, and employees may not want to work for an owner who seems uncommitted.
Instead, plan for your eventual exit and put processes in place quietly.
Are You Ready to Sell Your Business?
If you’re ready to exit your business through a sale, we’re here to help. Murphy Business has helped many companies market themselves, qualify buyers, and negotiate the terms of a sale.
If it’s time to implement your exit plan and sell, contact us today for more information!