A business's exit plan is just as important as an estate plan or a will.
Louisville, KY (PRWEB) January 25, 2012
If a catastrophic event occurred today, would family or employees know what to do with your business tomorrow? The best-run businesses explore exit strategies, create growth plans, and develop tactics to achieve the most desirable outcomes long before the need arises.
A well-prepared Exit Plan should provide a roadmap to an owner’s exit from his or her business. It is much more than just a checklist; it’s a workable plan to ensure an owner will reap the rewards of their business success and meet the personal goals they’ve set for themselves and their families.
There are many things to consider when putting together a business exit plan, including: the owner’s current age and health, the state of the industry, competition, the health of the economy, and the interests of the owner’s family. The sooner a plan is put together, the more control and options there will be. The longer a business waits to create a plan, the greater the risk that personal or business changes may occur that might decrease an owner’s options or, force them down a less-favorable path.
A Business Exit Plan is just as important as an estate plan or a will. Given that the exit from your company is likely to be the most significant financial event of your life, why leave it to chance? Over the years, it has been the following seven tips that have proven to have the greatest impact on creating a successful business plan.
1. Determine short, mid and long-term objectives. Consideration should be given to personal goals as well as professional goals.
2. Identify business value drivers and benchmark the value of the business.
3. Perform business and profitability analysis. Businesses often seek a professional third-party, such as a Mergers & Acquisition firm, to provide this information.
4. Create an action plan to maximize business value and profitability. Achieving a business’s maximum value and profitability takes time. It is best to regularly operate within a plan that continuously focuses on these two values.
5. Match the succession strategy and personal wealth objectives. This step prompts conversations regarding succession and compensation for leaders upon their exit. Having these discussions before they are “critical” gives all time to consider everyone’s wishes and explore options. This is extremely valuable to relations once exiting begins.
6. Develop contingencies for unforeseen events. This provides a feeling of security to the business owner as well as business partners.
7. Monitor the plan and exit the business. The best Exit Plans contain a spirit of "adaptability” for the inevitable changes that will occur between a plan’s conception and it’s conclusion.
American Fortune Mergers & Acquisitions, LLC is a nation-wide firm that provides services in the areas of growth-to-exit planning, mergers and acquisitions and business valuations for businesses with revenues between $3 million and $100 million. American Fortune was founded by industry veteran Brian S. Mazar who developed a unique buying process that is sell-side driven. Due to this process, American Fortune successfully sells their businesses at an average of 98% their listed price.