Why every business owner needs an exit plan
For most business owners, their company is a source of income as well as a passion project and, more often than not, where the funds for their retirement will come from.
There are a number of things to consider as part of your business plan to ensure your organisation reaches its full potential, while also generating enough capital to allow you to retire comfortably.
A truly rounded approach to the future of your business means putting the following in place now:
- Clear company structures
- Efficient marketing
- Financial forecasts
- Marketplace research
Here’s why an exit strategy should be just as high on your list:
Exit planning is a strategic approach business owners can take to prepare their company for their future departure.
It’s quite simple really – the better your business performs while you are in charge, the more valuable it will be to the future owner, which in turn means a higher sale price.
While maximising your business growth and assuring healthy profits is great both for ensuring a healthy income and for making your company more attractive to future buyers, the key aspect of any exit strategy is to plan for the business to run successfully without you.
Could your organisation run independently without you? Consider the following – is your company overly reliant on your:
- Personal input?
If the answer is yes to any of the above, you need an exit strategy to help you shift the value from you as an individual to the organisation itself, so that when you are ready to hand over the reins, the business will be able to thrive independent of you.
What are the other benefits of having an exit plan?
- Working on your exit plan is a chance to reflect on your business’s processes and practices
- This reflection will inform the strategic improvements you make to your business today
- Improving your current business practices will make your company more successful and increase its future market value
- It will also help you focus on your goals going forward in terms of where your business needs to be for you to exit
A well-thought-out exit strategy is an important business document that will benefit your organisation both in the short and long term. Here at Penguin Wealth we have a lot of experience helping business owners with their financial planning – start a conversation today and we can help you and your business reach your full potential.