4 (or so) reasons why you need an exit plan

You may not have any intention of selling your business. You may have already decided that, when the time comes, you’ll simply hand it over to family members or existing employees. As a result, you may not think you need an exit plan. You’re wrong. There are four key reasons why you need an exit plan – and here they are.

1. Having clear goals for the business

Goals are important. If you don’t have long-term, ambitious goals, you will have nothing concrete to work towards and your business is unlikely to achieve sustainable success.

You need to think long-term: where do you want your business to be when it eventually comes to selling it? What’s your target revenue? What are your target customer numbers? What is your target business size? Once you have these things worked out and accounted for you will be able to start putting a solid plan in place that will ultimately ensure that your business stays in the best shape it can be while continuing to grow.

2. Planning for retirement

An exit plan is really about building as strong a business as possible. Make sure the goals and dreams you have for retirement come true. Here are five ways you can make it happen.

  • Work with a wealth planner: A wealth planner will determine how much capital you need to generate to ensure that you enjoy a happy retirement. They will then build and implement strategies to make this happen.
  • Build a process to increase revenue while you take a step back: If your business is ready to maximise its revenue potential then you, the business owner, need to modify your focus and look at ways in which you can increase the chances of this happening while you take a step back. Think about outsourcing leads and hiring a new team member who can lead this process. Remember to make sure that they have the same focus that you did when you built this company into its current position, so they can then take it even further.
  • Turn your service into a product: While this may not be right for every business, if you are clear on what you are selling you can create a platform for selling it. Create clear document processes and investigate tech solutions to help you and your sales team make this product deliverable. Remember these sales will be funding your retirement.
  • Improve your sales processes: Take a fresh look at your sales processes and then consider how you can improve and streamline them. Automating your processes increases efficiency, and by implementing a CRM system you will easily be able to manage and see all stages of your clients’ buyer journeys.
  • Get a good management team in place: Without a great team your legacy will die. Consider contacting specialist recruitment firms to help find and screen candidates. The increased cost of these services is usually reflected in the calibre of the candidate. Also work your network, and get face time with anyone who you think could take the lead.

3. Making business decisions with a long-term goal in place

As a business owner, you will have lots of decisions to make. Do you need to invest in new equipment and new employees? What type of business is it that you want to chase? But how can you make these decisions without knowing your long-term goals? Start at the end and work backwards to work out what you need to do to get to your final destination.

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Hitting your targets: It’s important to ensure that you have a long-term goal in place

4. Streamlining the business

Streamlining your business can save both time and money, and reduce the risk for potential buyers. There are a number of things you can do to make your business more appealing and build confidence.

  • Get a strong management team in place – not only will it help your business to succeed but it will also inspire confidence within your staff and clients.
  • Make sure you have clear ownership on intellectual property – it is a valuable asset and needs to be protected.
  • Put in place suitable management and sales systems – think about CRM systems as automation, as we mentioned above, is a great way to streamline.
  • Go paperless – Not only is it wasteful, but your business will be easier to manage if it is all electronic. Communication and keeping track of your files will be easier and it will save you money and time.
  • Empower your employees to make decisions – allow your experienced employees to make decisions. The trust and empowerment will encourage them to keep doing a great job. They know your business inside and out, and if you allow them to take the lead it will increase efficiency.
  • Outsource – All businesses, no matter how big or small, can benefit from outsourcing. When done right it is easy to manage and will dramatically reduce your workload and improve customer service.

If exit planning all seems too difficult, contact Simon at Business Blueprint for help.

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